Vietnam: What does the personal income tax reduction dossier for taxpayers facing difficulties due to storms include?

Vietnam: What does the personal income tax reduction dossier for taxpayers facing difficulties due to storms include?

According to the provisions of Circular 80/2021/TT-BTC, taxpayers facing difficulties due to Storm Yagi affecting their ability to pay personal income tax are eligible for a tax reduction proportional to the damage incurred but not exceeding the amount of tax payable.

In such cases, taxpayers as mentioned above can apply for a personal income tax reduction.

Based on sub-item 87, Section 2, Part 2 Administrative Procedures promulgated under Decision 1462/QD-BTC of 2022; The list of forms issued with Circular 80/2021/TT-BTC and the list of tax declaration dossiers issued with Decree 126/2020/ND-CP specifying the tax reduction dossier for taxpayers facing difficulties due to natural disasters, fires, or accidents include:

- A proposal document according to form number 01/MGTH as per Appendix 1 - Tax declaration dossier forms issued with Circular 80/2021/TT-BTC dated September 29, 2021, of the Ministry of Finance;

- Minutes determining the degree and value of asset damage by competent authorities and confirmed by the local government of the commune where the natural disaster or fire occurred, according to form number 02/MGTH as per Appendix I - Tax declaration dossier forms issued with Circular 80/2021/TT-BTC.

The competent authority determining the degree and value of damage is the financial body or appraisal bodies that ascertain the degree and value of property damage;

- In case of damage to goods, the taxpayer must provide an appraisal report (appraisal certificate) on the damage level from the appraisal body, which holds legal liability for the accuracy of the appraisal certificate as per legal provisions;

- In case of land and crop damage, the financial authority is responsible for the determination;

- Documents determining compensation by the insurance agency or compensation agreement from the person causing the fire (if any);

- Expenses directly related to disaster or fire remediation;

- Personal income tax finalization declaration form number 02/QTTT-TNCN according to Appendix I - List of tax declaration dossiers issued with Decree 126/2020/ND-CP and Appendix II - Tax declaration dossier forms issued with Circular 80/2021/TT-BTC (if the taxpayer applies for a reduction on personal income from wages or salaries).

What are procedures for applying for personal income tax reduction for taxpayers facing difficulties due to storms in Vietnam?

Based on sub-item 87, Section II, Part 2 Administrative Procedures promulgated under Decision 1462/QD-BTC of 2022 as follows:

Step 1. Individuals prepare tax reduction dossiers and submit them to the directly managing tax authority.

Step 2. Tax authority reception:

- In case the dossier is submitted directly at the tax authority or sent via postal services: the tax authority receives and processes the dossier according to regulations.

- In case the dossier is submitted through electronic transactions, the reception, examination, acceptance, and processing of the dossier (and return of results if there are results) is carried out through the tax authority's electronic data processing system.

Timeline for personal income tax reduction procedures for taxpayers facing difficulties due to storms?

Based on sub-item 87, Section 2, Part 2 Administrative Procedures promulgated under Decision 1462/QD-BTC of 2022 as follows:

- For regular dossiers: within 30 (thirty) days from the date of receipt of complete dossiers, the tax authority must issue a tax reduction decision or notify the taxpayer of the reasons for not being entitled to a tax reduction.

- For dossiers that require the tax authority to conduct an actual inspection: within 40 (forty) days from the date of receipt of complete dossiers, the tax authority must issue a tax reduction decision or notify the taxpayer of the reasons for not being entitled to a tax reduction.

What is the level of personal income tax reduction for taxpayers facing difficulties due to storms in Vietnam?

In sub-item 1, Section II of Official Dispatch 4062/TCT-CS of 2024 guiding solutions to support organizations, individuals, and businesses suffering losses due to Storm No. 3 and subsequent storm floods, the regulation on personal income tax reduction is stated as follows:

Legal provisions on exemption, reduction, and extension of taxes, fees, and charges for households and individuals conducting business affected by natural disasters.

1. Regarding tax reduction:

...

Based on the above provisions, in cases where households and individuals conducting business are faced with difficulties due to natural disasters, they are entitled to a reduction in personal income tax, special consumption tax, and natural resource tax as follows:

- The reduced level of personal income tax corresponds to the extent of the damage but does not exceed the amount of tax payable;

- The reduced level of special consumption tax is determined based on actual losses from natural disasters or unexpected accidents, but not exceeding 30% of the tax payable of the year the loss occurred and not exceeding the value of the damaged property after compensation (if any).

...

Workers facing difficulties due to storms and floods will be eligible for a personal income tax reduction proportional to the extent of the damage but not exceeding the amount of tax payable.