Shall wood cabinet manufacturers be entitled to value-added tax deferral in Vietnam?

Shall wood cabinet manufacturers be entitled to value-added tax deferral in Vietnam?

According to Article 3 of Decree 64/2024/ND-CP, regulations on subjects eligible for deferral are as follows:

Eligible Subjects for Deferral

1. Enterprises, organizations, households, household businesses, and individuals engaged in production in the following economic sectors:

a) Agriculture, forestry, and fisheries;

b) Manufacturing, food processing; textiles; apparel manufacturing; leather and leather-related products manufacturing; wood processing and manufacturing products from wood, bamboo, rattan (excluding beds, cabinets, tables, chairs); manufacturing products from straw, reeds, and plaiting materials; manufacturing paper and paper products; manufacturing products from rubber and plastics; manufacturing products from other non-metallic minerals; metal production; mechanical processing; metal treatment and coating; manufacturing electronic products, computers, and optical products; manufacturing automobiles and other motor vehicles; manufacturing beds, cabinets, tables, chairs;

c) Construction;

d) Publishing activities; cinematography, television program production, audio recording, and music publishing;

đ) Crude oil and natural gas extraction (no deferral for corporate income tax of crude oil, condensate, and natural gas collected under agreements or contracts);

e) Beverage production; reproducing recorded media of all kinds; coke production, refined petroleum products; chemical production and chemical products manufacturing; manufacturing products from pre-fabricated metal (excluding machinery, equipment); motorcycle and motorbike manufacturing; repair, maintenance, and installation of machinery and equipment;

g) Wastewater drainage and treatment.

2. Enterprises, organizations, households, household businesses, and individuals engaged in business in the following economic sectors:

a) Transportation and warehousing; accommodation and food services; education and training; healthcare and social assistance; real estate business activities;

b) Labor and employment services; travel agency operations, tour business, and related promotional and tourist tour organizing support services;

c) Creative activities, arts, and entertainment; library, archive, museum operations, and other cultural activities; sports, recreation, and entertainment activities; film screening activities;

d) Broadcasting and television activities; computer programming, consultancy, and related activities; information service activities;

đ) Support services for mining.

The economic sectors listed in clauses 1 and 2 of this Article are determined according to Decision No. 27/2018/QD-TTg dated July 6, 2018, of the Prime Minister of the Government of Vietnam on the promulgation of the Vietnamese economic sector system.

The economic sector classification according to Appendix I issued together with Decision No. 27/2018/QD-TTg includes 5 levels. The determination of economic sectors to apply deferral is based on the principle: If the economic sector name listed in clauses 1 and 2 of this Article belongs to level 1, the economic sector eligible for deferral includes all economic sectors classified to levels 2, 3, 4, 5 of level 1; if it belongs to level 2, the economic sector eligible for deferral includes all economic sectors classified to levels 3, 4, 5 of level 2; if it belongs to level 3, the economic sector eligible for deferral includes all economic sectors classified to levels 4, 5 of level 3; if it belongs to level 4, the economic sector eligible for deferral includes all economic sectors classified to level 5 of level 4.

3. Enterprises, organizations, households, household businesses, and individuals engaged in the production of prioritized supporting industry products; key mechanical products.

Prioritized supporting industry products are determined according to Decree No. 111/2015/ND-CP dated November 3, 2015, of the Government of Vietnam on supporting industry development; key mechanical products are determined according to Decision No. 319/QD-TTg dated March 15, 2018, of the Prime Minister of the Government of Vietnam approving the Strategy for the Development of the Vietnamese Mechanical Industry to 2025, vision to 2035.

4. Small and micro enterprises are determined according to the provisions of the Law on Supporting Small and Medium Enterprises 2017 and Decree No. 80/2021/ND-CP dated August 26, 2021, of the Government of Vietnam providing specific provisions of the Law on Supporting Small and Medium Enterprises.

Thus, according to the above regulations, a wood cabinet manufacturer is among the subjects eligible for a value-added tax deferral.

Shall wood cabinet manufacturers be entitled to value-added tax deferral in Vietnam? (Image from the Internet)

Is evidence required for a tax deferral application for value-added tax in Vietnam?

According to the regulations at Article 65 Law on Tax Administration 2019 as follows:

- The tax deferral application includes:

+ A written request for a tax deferral, clearly stating the reason, tax amount, and deferral duration;

+ Evidence supporting the reasons for tax deferral.

- The Minister of Finance specifies the detailed dossier for tax deferral.

Regarding the submission and handling of a tax deferral application:

- The tax authority receives the tax deferral application of taxpayers through the following methods:

+ Direct submission at the tax authority;

+ Submission via postal mail;

+ Electronic submission through the tax authority's electronic transaction portal.

- The tax authority processes the tax deferral application as follows:

+ If the application is legal, complete, and in the correct format, a written notice of tax deferral is given to the taxpayer within 10 working days from the date of receiving the complete dossier;

+ If the application is incomplete as per the regulations, a written notice is given to the taxpayer within 03 working days from the date of receiving the dossier.

Furthermore, according to clause 2 Article 24 Circular 80/2021/TT-BTC, the dossier for tax deferral includes:

[1] In cases of natural disasters, catastrophes, epidemics, fires, unexpected accidents as stipulated in point a clause 27 Article 3 Law on Tax Administration 2019, the dossier includes:

- A declaration requesting a tax deferral of the taxpayer following form No. 01/GHAN (download) issued together with Appendix 1 Circular 80/2021/TT-BTC;

- Documentation confirming the time and location of the disaster, catastrophe, epidemic, fire, or unexpected accident by a competent authority (original or copy certified by the taxpayer);

- A document determining the material value of the damage prepared by the taxpayer or a legitimate representative, taking responsibility for the accuracy of the data;

- A document (original or copy certified by the taxpayer) stipulating the responsibility of organizations or individuals responsible for compensating damages (if any);

- Documents (original or copy certified by the taxpayer) related to damage compensation (if any).

[2] In cases of other force majeure events as stipulated in clause 1 Article 3 Decree 126/2020/ND-CP, the dossier includes:

- A declaration requesting a tax deferral of the taxpayer following form No. 01/GHAN (download) issued together with Appendix 1 Circular 80/2021/TT-BTC;

- A document determining the material value of the damage prepared by the taxpayer or a legitimate representative, taking responsibility for the accuracy of the data;

- Documentation confirming the time and location of the force majeure event by a competent authority; documentation proving the taxpayer had to stop or suspend production and business due to war, riots, or strikes causing the taxpayer to halt production and business (original or copy certified by the taxpayer);

- Documentation proving the occurrence of risks not due to the subjective cause or responsibility of the taxpayer and the inability of the taxpayer to finance the payment to the state budget for cases of damage due to risks not stemming from the subjective cause or responsibility of the taxpayer (original or copy certified by the taxpayer);

- Documents (original or copy certified by the taxpayer) related to damage compensation by insurance agencies (if any).

[3] For cases of relocation of production and business facilities as stipulated at point b clause 1 Article 62 Law on Tax Administration 2019, the dossier includes:

- A declaration requesting a tax deferral of the taxpayer following form No. 01/GHAN (download) issued together with Appendix 1 Circular 80/2021/TT-BTC;

- Decision of the competent state authority regarding relocating production and business facilities for taxpayers (original or copy certified by the taxpayer);

- Scheme or relocation plan, clearly showing the schedule and implementation progress of the taxpayer (original or copy certified by the taxpayer).

Thus, it can be seen that evidence supporting the reasons for tax deferral is a necessary document in the dossier for deferral of value-added tax payment.

How does the tax authority receive the tax deferral application in Vietnam?

* After completing the dossier, the tax authority receives the taxpayer's tax deferral application through the following methods: (Article 65 Law on Tax Administration 2019)

- Direct receipt at the tax authority;

- Receipt via postal mail;

- Electronic submission through the tax authority's electronic transaction portal.

* The tax authority processes the tax deferral application according to the following regulations:

- If the application is legal, complete, and in the correct format, a written notice of tax deferral is given to the taxpayer within 10 working days from the day of receiving the complete dossier;

- If the application is incomplete as per the regulations, a written notice is given to the taxpayer within 03 working days from the day of receiving the dossier.

Thus, it can be seen that after completing the dossier, the tax authority receives the taxpayer's tax deferral application through the following methods:

Method [1] Direct receipt at the tax authority;

Method [2] Receipt via postal mail;

Method [3] Electronic submission through the tax authority's electronic transaction portal.