OVERVIEW OF THE NEW REGULATION IN VIETNAM ON THE DEFERRAL OF VALUE-ADDED TAX, CORPORATE INCOME TAX, PERSONAL INCOME TAX AND LAND RENTS IN 2021

The year 2020 passed with existing difficulties for businesses and people in general due to the impact of the Covid-19 pandemic. On April 19, 2021, the Government of Vietnam issued Decree 52/2021/ND-CP deferral of value-added tax, corporate income tax, personal income tax, and land rents in 2021 with the main content of extending the time to pay value-added tax, corporate income tax, personal income tax and land rent in 2021 for many subjects. This Decree has a number of notable points as follows:

I. Extended subjects:

The specific extension subjects are specified in Article 2 of Decree No. 52/2021/ND-CP. Accordingly, in addition to those who are negatively affected by the Covid epidemic as in Decree No. 41/2020/ND-CP, Decree No. 52/2021/ND-CP stipulates additional subjects eligible for an extension of payment. tax, land rent compared to Decree No. 41/2020/ND-CP, including:

- Enterprises, organizations, business households, and individuals engaged in production activities in the following economic sectors:

+ Publishing activities; cinematographic activities, television program production, sound recording, and music publishing;

+ Exploiting crude oil and natural gas (no extension for corporate income tax on crude oil, condensate, and natural gas collected under agreements or contracts);

+ Manufacture of beverages; print, copy records of all kinds; production of coke, refined petroleum products; manufacture of chemicals and chemical products; manufacture of products from prefabricated metal (except for machinery and equipment); manufacture of motorcycles and motorbikes; repair, maintenance and installation of machinery and equipment;

+ Drainage and wastewater treatment.

- Enterprises, organizations, business households, and individuals doing business in the following economic sectors:

+ Radio and television activities; computer programming, consulting services, and other computer-related activities; information service activities;

+ Activities of supporting services for the mining.

II. Extension time:

Deferral of value-added tax (VAT) payments

Eligible Taxpayers can defer VAT payments, so that Quarter 1 and Quarter 2, 2021 payments can be deferred for 5 months for quarterly payers. March, April, May, and June 2021 payments can also be deferred for 5 months for monthly payers. However, it should be noted that lodgements are still required to be completed on time, and the exemption excludes VAT on imports.

The timeframe for VAT payments for July and August is extended by four and three months, respectively.

Deferral of corporate income tax (CIT) payments

Eligible companies are able to defer their 2021 Quarter 1 and Quarter 2 provisional CIT payments by 3 months from their due dates.

Household businesses & individuals – VAT and PIT deferrals

The annual VAT and PIT payments due for 2021 for eligible Household Businesses and Individuals can be deferred until 31 December 2021.

Land rental deferrals

Eligible Taxpayers with direct land lease contracts from the State can defer 2021 annual land rental payments for 6 months, from 31 May 2021.

III. Conditions and procedures for extension

In order to receive the extension of tax and land rent according to the provisions of Decree 52/2021/ND-CP, the taxpayer must first fully pay the tax and land rent which has been extended according to the provisions of Decree No. Decree No. 41/2020/ND-CP and corresponding late payment interest (if any) to the state budget before July 30, 2021. The order of payment of taxes, late payment interest, and fines shall comply with the provisions of Article 57 of the Law on Tax Administration 2019.

In addition, taxpayers must send an application for extension of tax and land rent payment for the first time or for replacement when detecting errors to the tax agency directly managing them by July 30, 2021.

The above information is about the ‘Overview of Decree No. 52/2021/ND-CP dated April 19, 2021, about deferral of value-added tax, corporate income tax, personal income tax, and land rents in 2021.' For more information and advice on this issue, please contact Doanh Tri Law Firm directly via:

Hotline: (+84) 911.233.955 - (024) 6293 8326

Email: [email protected]

Doanh Tri Law Firm is pleased to accompany our Customers!