What are tax reduction, exemption policies regarding fiscal policies for supporting Socio-economic recovery and development program in Vietnam?

What are tax reduction, exemption policies regarding fiscal policies for supporting Socio-economic recovery and development program in Vietnam?

Pursuant to Clause 1.1 Article 3 of the Resolution 43/2022/QH15 stipulating tax reduction, exemption policies regarding fiscal policies for supporting Socio-economic recovery and development program in Vietnam as follows:

a) Reduce 2% of VAT in 2022 for goods and services currently subject to 10% VAT (to 8%), except for the following goods and services: telecommunication, financial activities, banking activities, securities, insurance, trading of real estate, metal, precast metal products, mining products (excluding coal mining), coke mining, refined oil, chemical products, goods and services subject to excise tax;

b) Allow donations and sponsors made by enterprises and organizations for COVID-19 epidemic control operation in Vietnam to be included in deductible expenses when calculating taxable corporate income for the tax period of 2022.

What are regulations on development investment policies regarding fiscal policies for supporting Socio-economic recovery and development program in Vietnam?

Pursuant to Clause 1.2 Article 3 of the Resolution 43/2022/QH15 stipulating development investment policies regarding fiscal policies for supporting Socio-economic recovery and development program in Vietnam as follows:

Increase development expenditure from state budget of up to VND 176 thousand billion, focusing in 2022 and 2023, including:

a) Regarding medical sector:

Allocate up to VND 14 thousand billion to invest in new construction, renovation, upgrade, modernization of local health system, preventive medical system, regional centers for disease control (CDC), improve epidemic control capacity of central institutes and hospitals together with providing training, improving personnel in health sector, domestic vaccine and COVID-19 medicine production;

b) Regarding social security, labor, and employment sectors:

- Grant Vietnam Bank for Social Policies (VBSP) up to VND 5 thousand billion, including interest rate cover and management fees of VND 2 thousand billion in order to implement preferential credit policy within the Program; support interest rate of up to VND 3 thousand billion for debtors of policy credit programs with applicable interest rate of more than 6%/year;

- Invest up to VND 3,15 thousand billion in new construction, renovation, upgrade, expansion, and modernization of social assistance establishments, training facilities, vocational training facilities, and employment centers;

c) Regarding support for enterprises, cooperatives, and household businesses:

- Support interest rate (2%/year) of up to VND 40 thousand billion via commercial institution system for important sectors, enterprises, cooperatives, and household businesses capable of repaying debt and recovering; grant loan for renovation of old apartment buildings, construction of social houses, and houses for purchase, rent, and lease purchase;

- Grant Tourism Development Assistance Fund up to VND 300 billion in charter capital;

d) Regarding investment in infrastructure development:

Add up to VND 113,55 thousand billion to investment capital from the state budget to develop infrastructure in: traffic, information technology, digitalization, embankment of river banks, beaches, reservoir safety, adaptation to climate change, and remediation of natural disaster consequences;

dd) Selection and allocation of capital for projects within the Program must allow disbursement of capital of the Program in 2022 and 2023 and comply with the following rules:

- Priority projects of national importance, projects in the list of Medium-term public investment plans in the period of 2021 - 2025 that are being implemented and can be completed prematurely but have not been adequately allocated with capital;

- When allocating capital for projects not mentioned under the list of Medium-term public investment plans in the period of 2021 - 2025: prioritize important, urgent projects that pose their effects on a large scale, are potentially disbursed fast, affect the economy immediately, satisfy planning, use funding sources effectively, guarantee capital balancing capacity to finish the projects within 2022 - 2025; for new projects that are important for socio-economic development, prioritize support in granting clearance;

- Investment procedures of projects must be fulfilled as per the law;

- Ensure openness, transparency, equality, and connection between provinces, regions, and sectors.

Best regards!