Who is eligible for tax and land rent extension in 2023?

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Four groups eligible for extending payment deadline of tax and land rent in 2023. Photo: H. Anh

Four groups eligible for extending payment deadline of tax and land rent

On April 14, the Government issued Decree 12/2023/ND-CP extending the deadline for paying value-added tax, corporate income tax, personal income tax and land rent in 2023.

This Decree takes effect from the date of signing until the end of December 31, 2023. After the extension period according to this Decree, the deadline for paying tax and land rent shall comply with current regulations.

As soon as the Government issued the Decree, on the afternoon of April 14, the General Department of Taxation sent a telegram to request local tax departments to notify taxpayers.

Regarding the subjects eligible for the extension, the Decree stipulates four groups. Accordingly, group 1 includes enterprises, organizations, family households, business households and individuals engaged in production activities in the following economic sectors:

Agriculture, forestry and fisheries; food production and processing; textile; production of costumes; manufacture of leather and related products; wood processing and production of products from wood, bamboo and cork (except for beds, cabinets, tables and chairs), products from straw, straw and plaiting materials; production of paper and paper products; manufacture of products from rubber and plastic; manufacture of other non-metallic mineral products; metal production; mechanical processing; metal treatment and coating; manufacture of electronic products, computers and optical products; manufacture of automobiles and other motor vehicles; manufacture of beds, cabinets, tables and chairs;

Construction; publishing activities; cinematographic activities, television program production, sound recording and music publishing; exploitation of crude oil and natural gas (payment of corporate income tax on crude oil, condensate, collected natural gas under agreements and contracts shall not be extended); beverage production; printing and copying 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.

Group 2 includes enterprises, organizations, households, business households and individuals engaged in the following economic sectors: Transportation and warehousing; accommodation and catering services; education and training; health and social assistance activities; real estate business; labor and employment service activities; activities of travel agencies, tour businesses and support services, related to the promotion and organization of tours;

Creative, artistic and recreational activities; activities of libraries, archives, museums and other cultural activities; sports and entertainment activities; movie screening activities; radio and television activities; computer programming, consulting services and other computer-related activities; information service activities; and mining assistance services.

Group 3 includes enterprises, organizations, households, business households and individuals engaged in the production of supporting industrial products with priority for development; key mechanical products.

Group 4 includes small and micro enterprises defined in accordance with the provisions of the Law on Support for Small- and Medium-sized Enterprises and the Government's Decree No. 80/2021/ND-CP dated August 26, 2021, detailing a number of articles of the Law on Support for Small- and Medium-sized Enterprises.

The economic sectors or fields of an enterprise, organization, household, business household or individual specified in Clauses 1, 2 and 3, Article 3 are the sectors or fields that the enterprise, organization, business households, business households and individuals have production and business activities and generate revenue in 2022 or 2023.

Application for extension must be submitted by September 30, 2023

Regarding the order and procedures for extension, the decree stipulates that taxpayers eligible for extension shall send an application for an extension of one-time payment of tax and land rent for the entire tax and land rent arising in the extended tax period at the same time of submitting monthly (or quarterly) tax returns in accordance with the law on tax administration. If the application is not submitted at the same time as the tax return, the deadline for submission is September 30, 2023.

Taxpayers themselves determine and take responsibility for the extension application. If the taxpayer submits an application for the extension to the tax authority after September 30, 2023, the tax and land rent payment deadline shall not be extended as prescribed in this Decree.

The tax authority is not required to notify the taxpayer of the acceptance of the extension of tax payment and land rent. During the extension period, the tax authority has grounds to determine that the taxpayer is not eligible for the extension, the tax authority shall send a written notice to the taxpayer of the refusal of the extension and the taxpayer must pay in full the amount of tax, land rent and late payment interest during the extension period shall be paid to the state budget.

If, after the extension period expires, through inspection or examination by a competent state agency, it is discovered that the taxpayer is not eligible for the extension as prescribed in this Decree, the taxpayer must pay the outstanding tax, fines and late payment interest to the state budget.

The Decree also stipulates that late payment interest shall not be charged for the deferred tax and land rent amount during the extended payment period.

If the tax authority has already calculated the late payment interest (if any) for the tax dossiers eligible for the extension as prescribed in this Decree, the tax authority shall make adjustments and not charge late payment interest.

In addition, investors of capital construction works and work items funded by the state budget capital, payments from the state budget for capital construction works of ODA–funded projects subject to value-added tax, must submit a notice that the tax authority has received the application for an extension when carrying out payment procedures to the State Treasury.

The State Treasury shall base itself on the dossier sent by the investors to not yet deduct value-added tax during the extension period. When the extension period expires, the contractor must pay the deferred tax amount as prescribed.

Regarding the organization of implementation, the decree stipulates that the Ministry of Finance is responsible for directing, organizing the implementation and handling problems arising during the implementation of this Decree.

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of People's Committees of provinces and centrally run cities and related enterprises, organizations, households, business households and individuals are responsible for the implementation of this Decree.