The Standing Committee of the National Assembly of Vietnam has promulgated Resolution 406/NQ-UBTVQH15 dated October 19, 2021 on solutions to supporting businesses and people affected by the COVID-19 epidemic. According to the resolution, tax exemption and reduction of corporate income tax, personal income tax and value-added tax are for many subjects, specifically as follows:
Article table of contents
Exemption and reduction of many taxes for people and businesses affected by COVID-19 (Artwork)
30% reduction of corporate income tax payable in Vietnam in 2021
Clause 1, Article 1 of Resolution 406/NQ-UBTVQH14 of Vietnam stipulates a 30% reduction in the payable corporate income tax amount of 2021 for the case that taxpayers under the Law on Corporate Income Tax have a revenue of not more than VND 200 billion in 2021 and the revenue in 2021 is lower than the revenue in 2019.
The criterion that the revenue in 2021 will be reduced compared to the revenue in 2019 is not applied to the case that taxpayers are newly established, consolidated, merged, divided, split in the tax period 2020, year 2021.
Reduced value-added tax on some goods and services in Vietnam
Value-added tax reduction from November 1, 2021 to the end of December 31, 2021 for the following goods and services:
(1) Transportation services (rail transport, water transport, air transport, other road transport); Lodging; Food Service; services of travel agencies, tour operators and support services, related to the promotion and organization of tours;
(2) Publishing products and services; cinematographic services, television program production, sound recording and music publishing; works of art and services for composing, art, and entertainment; services of libraries, archives, museums and other cultural activities; sports, entertainment and entertainment services.
Note: Goods and services in group (2) do not include publishing software and goods and services produced and traded in the online form.
Depending on the tax calculation method, the value-added tax (VAT) reduction is applied as follows:
- Enterprises and organizations that calculate VAT according to the credit method of production and trading of goods and services mentioned above are entitled to a reduction of 30% of the value-added tax rate;
- Enterprises and organizations that calculate VAT according to the percentage method on the turnover of production and trading of goods and services mentioned above are entitled to a 30% reduction of the percentage rate for calculating VAT.
Exemption from personal income tax and value-added tax in Vietnam
According to Clause 2, Article 1 of Resolution 406, exemption from personal income tax, value added tax and other payable taxes arising from production and business activities of the months in the third and fourth quarters of 2021 for households and individuals having production and business activities in district-level areas affected by the COVID-19 epidemic in 2021, shall be decided by the Chairman of the People's Committee of the province or centrally run city.
Tax exemption does not apply to incomes and revenues from providing software products and services; digital information content products and services on entertainment, video games, digital movies, digital photos, digital music; digital advertising.
Exemption of late payments arising in 2020 and 2021
Exemption of late payment arising in 2020 and 2021 of debts of tax, land use levy, land rent for enterprises and organizations (including dependent units, business locations) arising loss in 2020.
Exemption from late payment interest as above is not applicable to cases where late payment interest has been paid.
To implement the above solutions, the Vietnamese National Assembly Standing Committee requires the Government to be responsible for implementing so that consumers can benefit from the value-added tax reduction specified in this Resolution.
At the same time, assign the Government to continue reviewing and implementing solutions according to its competence to support enterprises and organizations to reduce input costs; Studying a plan to support corporate income tax based on labor costs, a plan to use the budget to compensate for loan interest rates for businesses and organizations severely affected by the Covid-19 epidemic to restore production, business.
Resolution 406/NQ-UBTVQH14 of Vietnam takes effect from October 19, 2021.
Bao Ngoc
