Government approved support package of more than VND180 trillion for extension of tax and land rent payment deadlines

State needs to activate support package for businesses

98% of enterprises will benefit from this Decree.

Five groups are supported

The Decree provides for extension of payment deadlines of value added tax, corporate income tax, personal income tax and land rent for five groups.

The first group includes enterprises, organizations, households and individuals engaged in production activities in the following economic sectors: agriculture, forestry and fishery; food production and processing; weaving; producing costumes; producing leather and related products; processing wood and producing products from wood, bamboo of various species (excluding beds, wardrobes, tables, chairs); producing products from straw, stubble and plaiting materials; producing paper and paper products; producing products from rubber and plastic; producing products from other non-metallic minerals; metal production; mechanical processing; metal treating and coating; manufacturing electronic products, computers and optical products; manufacturing automobiles and other motor vehicles; manufacturing beds, wardrobes, tables, chairs; and construction.

The second group includes businesses, organizations, households and individuals engaged in transportation and warehousing sector; accommodation and catering services; education and training; health and social assistance activities; real estate; labor and employment service activities; activities of travel agents, tour operators and support services related to tourism promotion and organization; creative, artistic and recreational activities; activities of library, archives, museums and other cultural activities; sports, entertainment activities; film screening activities.

The third group includes enterprises, organizations, households and individuals engaged in producing supporting industry products prioritized for development; key mechanical products. The prioritized supporting products are determined according to the Government's Decree No.111/2015/ND-CP on supporting industry development; key mechanical products are determined under the Prime Minister's Decision No. 319 / QD-TTg approving the Strategy for development of Vietnam's mechanical engineering industry to 2025, with a vision to 2035.

The fourth group includes small and micro-sized enterprises that are stipulated in the Law on Support for Small and Medium-sized Enterprises No. 04/2017/ QH14 and the Government Decree No. 39/2018 / ND-CP detailing a number of articles of the Law on Support for Small and Medium-sized Enterprises.

The fifth group includes credit institutions and foreign bank branches implementing solutions to support customers that are enterprises, organizations and individuals affected by the Covid-19 pandemic in accordance with the regulations of the State Bank of Vietnam. The State Bank of Vietnam is responsible for announcing the list of credit institutions and branches of foreign banks participating in customer support for tax authorities to extend tax and land rent payment deadlines according to the Decree.

Support package of VND180 trillion

Regarding the policy, the Government has approved the extension of payment deadlines of value-added tax amounts payable in March, April, May and June 2020 (for cases of monthly declared value-added tax) and in the first quarter and the second quarter (for cases of quarterly declared value-added tax). The extension is five months from the end of the deadline for value-added tax payment as prescribed by the Law on Tax Administration.

At the same time, extending the payment deadline for corporate income tax payable according to the final settlement of the tax period 2019 and the provisional corporate income tax payable in the first and second quarters of the tax period 2020. The extension is five months from the end of the deadline for corporate income tax payment in accordance with the Law on tax administration.

The Government allows the extension of the payment deadlines for value added tax and personal income tax payable in 2020 for business households and individuals engaged in economic sectors eligible for incentives. Business households and individuals shall pay these tax amount no later than December 31, 2020.

These five groups that are leasing the land directly from the State under the Decision and the contracts of competent state agencies in the form of annual land rent payment, are also extended the payment deadline for the land rent payable in the first period of 2020. The extension is five months from May 31, 2020.

Business enterprises, organizations, households or individuals engaged in production and business activities of various economic sectors, including economic sectors and domains eligible for incentives shall be extended the payment deadline for all added value, corporate income tax payable; business households and individuals shall be extended the payment deadline for all value added tax and personal income tax payable .

According to the estimate from the Ministry of Finance, the tax and rent land amount extended under this Decree is about VND180 trillion. This is a large amount that can help taxpayers have capital to maintain production and business. In the short term, the State budget will have a deficit, but it will be paid at the end of the year and it will not affect the revenue estimates of 2020.

Taxpayers who are subject to the extension must submit an extension application for tax and land rent payment deadlines (electronically or otherwise) according to the attached form to the tax authority directly managing them once for all of extended taxes and land rent amount at the time of monthly (or quarterly) submitting the tax dossier according to Law on tax administration.

If the extension application for tax and land rent payment deadlines is inconsistent with the time of monthly (or quarterly) submitting the tax dossier, the deadline for submission is not later than July 30, 2020, the tax authority still extend the tax and land rent payment of the tax period that is extended before the time of submitting the extension application.