Viet Australia's laws update: Decree 41/2020/N?-CP on the extension of deadlines for tax and land use payments
On the 8th April the Vietnamese Prime Minister, Nguy?n Xuan Phúc, signed Decree No. 41/2020/N?-CP providing businesses with an extension of deadlines for tax and land use fee payments. The aim of this Decree is of course to support businesses throughout the economic hardships caused by the COVID-19 pandemic by providing those with an five months extension of the deadline for tax and land use payments. The important aspect of this Decree is that it took effect immediately after it was signed which reflects the degree of preoccupation of the Vietnamese Government for the economy and businesses in general.
The Decree stipulates that businesses operating in the following sectors shall benefit from this deadline extension:
Agriculture, forestry, fishery, food processing, textile, garment, construction, transportation, warehouse, accommodation, catering, education, medical services and parts supply sectors.
Small and micro-sized enterprises, credit institutions and branches of foreign banks which provided clients affected by the COVID-19 pandemic with support in compliance with the State Bank of Vietnam requirements and guidance. The State Bank of Vietnam will announce a list of banks eligible to benefit for the extension.
The five-month deadline extension is applicable to the Value Added Tax (VAT) for March, April, May, June, and for the first quarter and the second quarter. To make it clearer, it means that for example the VAT payment for March can be performed until September 2020 and the VAT payment for the second quarter can be performed until December 2020.
Concerning the Corporate Income Tax (CIT), the deadline extension is applicable to the 2019 CIT finalization and the CIT assessment for the first and the second quarter. Here it is important to mention the fact that the Decree also let businesses operating in multiple sectors, and at least one of which is subjected to the deadline extension, to benefit from the extension for all payable VAT and CIT. The Decree also allows households and individual businesses to benefit from a deadline extended until the 31st of December for VAT and CIT submissions.
The payments of the fees for using land are also extended for a period of five months beginning on the 31st May.
According to the Ministry of Finance, more than 700.000 businesses which represents around 98% of the totality of the Vietnamese companies shall benefit from all the above-mentioned deadline extensions.The Ministry also estimates that this extension concerns a total of 180 trillion VND (7.64 billion USD) worth of taxes and fees that according to the estimation, should still be collected by the State budget throughout this year.
And last but not least, it is important for taxpayers to keep in mind that they must submit a proposal to the Tax bodies before the 30th of July to be able to benefit from this extension.
If you have any questions concerning Vietnamese laws, business in Vietnam or any other related topic, and/or if you are interested in our Company's services, feel free to contact us by email: [email protected], or you can reach us by phone at (+84) 0848770777.
Viet Australia's Auditing Ltd. team