Vietnam: Which fields are eligible for extension of enterprise income tax payment time limit for enterprises employing a large number of workers?

According to Circular No. 16/2013/TT-BTC of the Ministry of Finance of Vietnam, intensive-labor enterprises (more than 300 laborers) in production or processing fields of: Agricultural products, forestry products, aquatic products, textile and garment, leather and footwear, electronic components, building of socio-economic infrastructural constructions (hereinafter referred to as intensive-labor enterprises) are eligible for being prolonged the duration of enterprise income tax payment for 06 months applying to payable enterprise income tax amounts of quarter I and prolong duration of enterprise income tax payment for 03 months applying to payable enterprise income tax amounts of quarter II and quarter III of 2013.

Specifically, intensive-labor enterprises (including laborers of branches and affiliated units) in fields entitled to prolong tax payment time limit as guided above include: Enterprises with average total laborers used regularly in 2012 more than 300 persons, excluding laborers with short-term contracts less than 3 months for enterprises established before January 01, 2013.

In which:

- The average labor quantity used regularly in year is defined as guides in Circular No. 40/2009/TT-BLDTBXH guiding way to calculate labor quantity used regularly as prescribed in Decree No. 108/2006/ND-CP of Vietnam’s Government detailing and guiding implementation of a number of articles of the Law on investment.

- For enterprises newly established as from January 01, 2013, the total laborers, excluding laborers with short-term contracts less than 3 months shall be the average labor quantity used regularly calculated from the establishment day to March 31, 2013 (if established in quarter I of 2013), to June 30, 2013 (if established in quarter II of 2013), to September 30, 2013 (if established in quarter III of 2013) and more than 300 laborers.

- In case an enterprise is organized under the model of mother company - subsidiary companies, the labor quantity as the basis for defining the mother company as subject to be entitled to prolong tax payment time limit shall exclude laborers of subsidiary companies and vice versa.

Circular No. 16/2013/TT-BTC stipulates as follows:

- The EIT amounts entitled to prolong tax payment time limit shall be tax amounts calculated on income from production, processing of: Agricultural products, forestry products, aquatic products, textile and garment, leather and footwear, electronic components, and building of socio-economic infrastructural constructions.

- Production, processing of: Agricultural products, forestry products, aquatic products, textile and garment, leather and footwear (including leather shoes, leather sandals of all kinds), electronic components are defined by basing on regulation in the Vietnam’s system of Economic Branches promulgated together with Decision No. 10/2007/QD-TTg.

- Activities in building of socio-economic infrastructural constructions include construction, installment of: Water plants, power plants, works for electric transmission and distribution, system for water supply and drainage; road, railway; airport, seaport, river port; railway-station, bus station; building of school, hospitals, cultural houses, cinemas, art-performing establishments, sport competition and exercising establishments; sewage and solid waste treatment system; works of communication, irrigational works in service for agriculture, forestry, fisheries.

View full text at Circular No. 16/2013/TT-BTC of the Ministry of Finance of Vietnam, effective from March 25, 2013.

Thu Ba

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