What are guidelines on procedures, applications for tax exemption, reduction, or payment deadline extension due to natural disasters in Vietnam?

What are guidelines on procedures, applications for tax exemption, reduction, or payment deadline extension due to natural disasters in Vietnam?

View the entire Official Dispatch 4962/CTTBI-TTHT of 2024 here.

According to Section 2 of Official Dispatch 4962/CTTBI-TTHT of 2024, the Thai Binh Tax Department provides guidelines on procedures and applications for tax exemption, reduction, or payment deadline extension due to floods as follows:

(1) Application for Exemption from Late Payment Fees:

Article 23 of Circular 80/2021/TT-BTC stipulates:

- For cases due to floods (natural disasters):

+ Written request for exemption from late payment fees by the taxpayer using Form No. 01/MTCN issued together with Appendix I of Circular 80/2021/TT-BTC;

+ Documents confirming the time and location of the natural disaster issued by the competent authority (original or certified copy by the taxpayer);

+ Documents determining the material damage value by the financial authority or independent assessment agency (original or certified copy);

+ Documents (original or certified copy by the taxpayer) stipulating the responsibility of organizations or individuals for compensation damages (if any);

+ Relevant documents (original or certified copy by the taxpayer) related to compensation damages (if any).

(2) Application for Tax Payment Deadline Extension:

Article 24 of Circular 80/2021/TT-BTC stipulates:

For cases due to floods (natural disasters), the application includes:

- Written request for tax payment deadline extension by the taxpayer using Form No. 01/GHAN issued together with Appendix I of Circular 80/2021/TT-BTC;

- Documents confirming the time and location of the natural disaster (original or certified copy by the taxpayer);

- Document determining the material damage value drafted and responsible for accuracy by the taxpayer or their legal representative;

- Documents (original or certified copy by the taxpayer) stipulating the responsibility of organizations or individuals for compensation damages (if any);

- Relevant documents (original or certified copy by the taxpayer) related to compensation damages (if any).

(3) Application for Tax Exemption and Reduction:

Article 80 of the 2019 Tax Administration Law provides:

- application for tax exemption and reduction for cases where the taxpayer self-determines the exempted or reduced tax amount includes:

+ Tax return;

+ Documents related to determining the exempted or reduced tax amount.

- application for tax exemption and reduction decided by the tax authority includes:

+ Written request for tax exemption or reduction specifying tax type, reasons, and exempted or reduced amount;

+ Documents related to determining the requested exempted or reduced tax amount.

- Clause 1 of Articles 52, 54, 55, 56, and 57 of Circular 80/2021/TT-BTC stipulate:

Procedures and cases where the tax authority notifies or decides on tax exemption and reduction:

- The tax authority notifies or decides on tax exemption and reduction in cases such as:

+ Personal income tax exemption for incomes stipulated in clauses 1-6, Article 4 of the 2007 Personal Income Tax Law;

+ Tax reduction for individuals, business households, and business individuals facing difficulties due to natural disasters, fires, accidents, and severe diseases;

+ Special consumption tax reduction for taxpayers producing goods subject to special consumption tax facing difficulties due to natural disasters, and unexpected accidents as per the law on special consumption tax;

+ Resource tax exemption and reduction for resource taxpayers facing natural disasters, fires, and unexpected accidents causing loss to declared and paid resources;

+ Exemption and reduction of non-agricultural land use tax;

Tax reduction procedures stated at point b, clause 1, Article 52 of Circular 80/2021/TT-BTC;

- For taxpayers facing difficulties due to natural disasters:

+ Written request using Form No. 01/MGTH issued together with Appendix I of Circular 80/2021/TT-BTC;

+ Minutes determining the degree and value of damage to assets by the competent authority with confirmation by the local commune-level government where the natural disaster or fire occurred using Form No. 02/MGTH issued together with Appendix I of Circular 80/2021/TT-BTC;

+ In case of goods damage: the taxpayer provides a damage assessment report by the assessment agency accountable for the accuracy of the report as per the law;

+ In case of land and crop damage: the financial authority will determine the damage;

+ Compensation documents by the insurance agency or agreement by the fire starter (if any);

+ Directly related expenditure documents to disaster or fire recovery;

+ Personal income tax settlement declaration using Form No. 02/QTT-TNCN issued together with Appendix 2 of Circular 80/2021/TT-BTC (if the taxpayer requests reduction for income tax on wages and salaries).

Tax reduction procedures for special consumption tax stipulated at point c, clause 1, Article 52 of Circular 80/2021/TT-BTC;

- For taxpayers facing difficulties due to natural disasters, the tax reduction application includes:

+ Written request using Form No. 01/MGTH issued together with Appendix I of Circular 80/2021/TT-BTC;

+ Minutes determining the degree and value of damage by the competent authority with confirmation by the local commune-level government where the natural disaster occurred using Form No. 02/MGTH issued together with Appendix I of Circular 80/2021/TT-BTC.

The competent authority to determine the degree and value of damage is the financial authority or the assessment agencies determining the asset damage.

In case of goods damage: the taxpayer provides an assessment report accountable for the accuracy as per the law.

+ Financial statements (for businesses) with explanations analyzing the damage amount and loss due to the damage.

Tax exemption and reduction procedures for resource tax stipulated at point d, clause 1, Article 52 of Circular 80/2021/TT-BTC;

- For tax exemption and reduction for resources due to disasters, fires causing loss to declared resources, the application includes:

+ Written request using Form No. 01/MGTH issued together with Appendix I of Circular 80/2021/TT-BTC.

+ Minutes determining the degree and value of resource loss by the competent authority with confirmation by the local commune-level government where the disaster or fire occurred using Form No. 02/MGTH issued together with Appendix I of Circular 80/2021/TT-BTC.

The competent authority to determine damage is the financial authority or the assessment agencies determining the asset damage.

In case of goods damage: the taxpayer provides an assessment report accountable for the accuracy as per the law.

Tax exemption and reduction procedures for non-agricultural land use tax stipulated at point đ, clause 1, Article 52 of Circular 80/2021/TT-BTC;

- For tax exemption and reduction for non-agricultural land use tax, except for cases where the annual payable tax is VND 50,000 or less; the application includes:

+ Written request using Form No. 01/MGTH issued together with Appendix I of Circular 80/2021/TT-BTC;

+ Copies of documents related to the taxable parcel, such as the Land Use Right Certificate, Land Allocation Decision, Leasehold Contract, and Land Use Purpose Change Decision;

+ Copies of documents proving eligibility for non-agricultural land use tax exemption or reduction.

For tax exemption and reduction applications as per clauses 9, Article 9, and clause 4, Article 10 of the 2010 Non-Agricultural Land Use Tax Law, the Head of the tax authority (managing the parcel) will issue a decision based on the taxpayer's request and confirmation from the commune-level government where the land is damaged.

(4) Deductible Expenses for CIT Calculation:

Clause 1, point 2.1, clause 2, Article 6 of Circular 78/2014/TT-BTC provide:

Deductible and non-deductible expenses for taxable income determination.

- Apart from non-deductible expenses stipulated in Article 6 of Circular 78/2014/TT-BTC, businesses can deduct all expenses if they meet the following conditions:

+ Expenses actually incurred related to the business operations of the enterprise.

+ Expenses with valid invoices and documents as per legal regulations.

+ If the invoice value for goods or service purchases with value of VND 20 million or more (including VAT), when paying, non-cash payment methods must be used.

Non-cash payment documents follow regulations in legal documents on VAT.

- Non-deductible expenses for taxable income determination include:

+ Expenses not meeting the conditions stipulated in clause 1, Article 6 of Circular 78/2014/TT-BTC.

In cases where the business incurs expenses related to asset loss due to natural disasters, diseases, fires, and other force majeure cases not compensated for, these expenses are deductible. Specifically:

The enterprise must self-determine the total loss value due to natural disasters, diseases, fires, and other force majeure cases as per legal regulations.

The uncompensated loss value is determined by subtracting the insured portion or compensation by other organizations or individuals from the total loss value as per legal regulations.

++ Deductible expense applications for assets, and goods lost due to natural disasters, diseases, and fires include:

+++ Enterprise's document to the managing tax authority explaining the lost assets, and goods due to natural disasters, diseases, and fires.

+++ Minutes of inventory assessment of the lost assets and goods by the enterprise.

The minutes of inventory must specify the value of the loss, causes, responsibility, types, quantity, and value of recoverable assets and goods (if any); and an inventory sheet with signatures from the enterprise's legal representative, who is responsible before the law.

+++ Local commune-level government (commune, ward, commune-level town, Industrial Park Management Board, Export Processing Zone, and Economic Zone) where the disaster, disease, or fire occurs confirming the event during that time.

+++ Compensation application accepted by the insurance agency (if any).

+++ Documents stipulating the responsibility of the organization or individual for compensation (if any).(5) Documents on Input VAT Deduction.

The conditions for input VAT deduction are specified in Article 15 of Circular 219/2013/TT-BTC (amended and supplemented by Circular 119/2014/TT-BTC, Circular 26/2015/TT-BTC, Circular 173/2016/TT-BTC).

What are guidelines on procedures, applications for tax exemption, reduction, or payment deadline extension due to natural disasters in Vietnam according to Official Dispatch 4962/CTTBI-TTHT 2024? (Image from the Internet)

What are regulations on tax submission deadline extension due to natural disasters in Vietnam?

Based on Article 46 of the Tax Administration Law 2019, the regulation is as follows:

Extension of tax declaration submission

1. Taxpayers unable to submit tax declaration on time due to natural disasters, catastrophes, epidemics, fires, and unexpected accidents may be granted an extension by the head of the directly managing tax authority.

2. The extension period shall not exceed 30 days for monthly, quarterly, annual tax declaration , and for tax declaration submitted on a per-incident basis; and 60 days for final settlement tax returns from the deadline date.

3. Taxpayers must submit a written request for a tax submission deadline extension to the tax authority before the tax submission deadline, stating the reason for the extension, with confirmation from the People’s Committee or the police office of the commune, ward, or commune-level town where the incident occurred.

4. Within 3 working days from the receipt of the extension request, the tax authority must respond in writing to the taxpayer on whether the extension is approved.

Accordingly, when taxpayers are unable to meet the tax submission deadline due to natural disasters, catastrophes, epidemics, fires, and unexpected accidents, the head of the directly managing tax authority may grant a tax submission deadline extension.

In addition, taxpayers must submit a written request for a tax submission deadline extension to the tax authority before the tax submission deadline, indicating the reason for the extension with confirmation from the commune-level People’s Committee or the police office of the ward or commune where the incident occurred.

Note: The extension period shall not exceed 30 days for the monthly, quarterly tax declaration from the original filing deadline.

Where to submit tax declarations in Vietnam?

Accordingly, Article 45 of the Tax Administration Law 2019 specifies the locations for submitting tax declaration as follows:

- Taxpayers shall submit tax declaration at the directly managing tax authority.

- In the case of submitting tax declaration under the one-stop-shop mechanism, the location for submitting tax declaration shall follow the mechanism's regulations.

- The locations for submitting tax declaration for exported and imported goods shall follow the regulations of the Customs Law.