Tax exemption policy for business households and individuals affected by Covid-19 in Vietnam

Tax exemption policy for business households and individuals affected by Covid-19 (Artwork)

Specifically, business households and business individuals who are resident individuals operating in all industries, having production and business activities in district-level areas affected by the Covid-19 epidemic in 2021 will be exempted from personal income tax, value added tax, excise tax, natural resource tax, and environmental protection tax arising from production and business activities of the months in the third and fourth quarters of 2021.

However, the tax exemption does not apply to income, revenue from providing software products and services; digital information content products and services on entertainment, video games, digital movies, digital photos, digital music; digital advertising.

In case the enterprise has paid the tax amount payable from production and business activities of the months in the third and fourth quarters of 2021, the enterprise will be processed by the tax authority to offset the overpaid tax amount with the debts or amounts arising in subsequent periods and handle overpaid refunds (if any) in accordance with Vietnamese law on tax administration.

Basis for determining tax exemption

**In case of having to issue a Notice of Payment:​ the tax authority shall base on the payable tax amount of the months in the third and fourth quarter of 2021 on the Notice of payment to determine the exempted tax by each business household and individual business.

** In case of not having to issue a Notice of Payment:  taxpayers (including organizations and individuals withholding, declaring and paying on behalf of business households and individuals; business households use single/volume invoices) based on the payable tax amount according to the tax declaration to determine the exempted tax amount of business households and individuals from production and business activities of the months in the third quarter and four quarters in 2021.

If you are eligible to declare tax by payment period or declare tax by year (for property tax, private house construction, and other declarations), the exempted tax amount is provided that the payable tax amount corresponds to the actual turnover. arising of the months in the third and fourth quarters of 2021.

If the actual revenue generated in the months in the third and fourth quarters of 2021 cannot be determined on the goods and service supply contract of the business household or individual, the average revenue shall be determined. month according to the contract value.

In case a contract for the provision of goods and services is signed by a business household or individual in a month, the duration of the contract shall be counted as full months.

Order and procedures for tax exemption
**In case of having to issue a Notice of Payment:​ 

- The tax authority shall make a list of business households and individuals under their management in the locality to determine tax-exempt entities, according to Form No. 01-1/DS-MTHK, Appendix II issued together with Decree 92.

- The tax authority shall base itself on the payable tax amount of each business household and individual business according to the notice of payment on the tax authority's database to determine the exempted tax amount.

- The Director of the Sub-department of Taxation/Regional Sub-department of Taxation shall issue a decision on tax exemption together with a list of all business households and individuals eligible for tax exemption according to Form No. 01/MTHK Appendix II enclosed here under Decree 92 of Vietnam.

After the tax authority issues a decision on tax exemption under Resolution 406/NQ-UBTVQH15 of Vietnam for all business households and individuals having production and business activities in the area, if any business households arise, For new business individuals, the tax authority shall make a list at the end of the month to issue a decision on tax exemption for new business households and individuals that are exempt from tax according to Resolution 406/NQ-UBTVQH15.

- The tax authority shall issue a notice of tax exemption under Resolution 406/NQ-UBTVQH15 after issuing the decision on tax exemption and send it to each business household and individual business according to Form No. 01/TBSMT-CNKD Appendix II attached to Decree 92.

** In case of not having to issue a Notice of Payment: 

Business households, business individuals; organizations and individuals deduct, declare on behalf of, and pay on behalf of business households and individuals; Business households using single/volume invoices determine the tax payable after tax exemption to declare on the tax return, and at the same time make a written determination of the exempted tax amount according to Form No. 01-1/PL-CNKD Appendix II promulgated together with Decree 92 of Vietnam to be submitted together with the Tax Return.

Therefore, in case the tax authority is not required to issue a notice of payment, the business household or individual must determine the tax payable after tax exemption and make a record of the exempted tax amount to submit with the tax declaration.

Bao Ngoc

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