Decree Deferring Taxes & Land Rental (COVID-19 Support)

On 8 April 2020, the Vietnam Government issued Decree 41/2020/ND-CP deferring certain payments for Value Added Tax (VAT), Corporate Income Tax (CIT), Personal Income Tax (PIT) and Government Land Rent for selected taxpayers, to support businesses in Vietnam impacted by COVID-19.

Implementation and eligible beneficiaries of the Decree covers the following:

1. Deferral of CIT payments

Eligible companies are able to defer the their 2019 final CIT payment (which was in fact due at the end of March 2020) for 5 months, and will also be able to defer their 2020 Quarter 1 and Quarter 2 CIT provisional payments for 5 months from their existing due dates.

Where companies have already made their 2019 final tax payment, which was due at the end of March 2020, they can request an offset of this amount against other taxes due – allowing them to essentially defer this payment although it has been remitted already. To make an adjustment request, companies will nee to use Form C1-11/NS from Circular 84/2016/TT-BTC issued by the Ministry of Finance.

2. Deferral of VAT payments

Eligible Taxpayers can defer VAT payments, so that Quarter 1 and Quarter 2 payments can be deferred for 5 months (for quarterly payers), and March, April, May and June 2020 payments can also be deferred for 5 months for (monthly payers). Note that lodgements are still required to be performed on time, and the exemption excludes VAT for imports).

3. Household businesses & individuals – VAT and PIT deferrals

The annual VAT and PIT payments due for 2020 for Household Businesses and Individuals can be deferred until 31 December 2020.

4. Land rental deferrals

Taxpayers with direct land lease contracts from the State can defer 2020 annual land rental payments for 5 months, from 31 May 2020.

5. Applicable taxpayers

1. Those involved in production activities covering:
   1. agricultural, forestry and fisheries sectors;
   2. production and processing of food, textile & garments, and footwear;
   3. production of wooden, metal, paper, plastic and rubber products;
   4. production of electronic products, computers and optical products;
   5. automobile manufacturing; and
   6. construction sector
2. Those operating in service sectors covering:
   1. transport sector and associated supporting activities;
   2. accommodation and catering services;
   3. travel agents, tour businesses and support services related to tour promotion and organization;
   4. training and education;
   5. medical and social assistance activities;
   6. real estate businesses;
   7. artists, recreational activities, sport activities, museums and cinemas;
   8. labour and employment services
3. Taxpayers engaged in the production of industrial products supporting the development of Vietnam and other key mechanical products
   (following previous guidelines released by the Government on Supporting Industry development, and Mechanical Engineering development)
4. Small and micro enterprises defined by regulations of the Law on Supporting Small and Medium Enterprises.
   The definitions include: Enterprises in the fields agriculture, forestry, fisheries, construction and industrial sectors with no more than 100 staff, and turnover no more than VND 50 billion or total capital not more than VND 20 billion. Enterprises in the fields of commerce and services with no more than 50 staff, and turnover no more than VND 100 billion or total capital not more than VND 50 billion. 6. Implementation & Access to Deferrals Taxpayers wishing to take advantage of the tax deferrals in this Decree using the form attached to this Decree, and which needs to be submitted no later than 30 July 2020. Submission can be made electronically or in paper form. The Decree took effect on 8 April 2020 when issued.
5. Credit Institutions and Foreign Bank Branches
   For those effected by the COVID-19 epidemic, as prescribed by the State Bank of Vietnam.

6. Implementation & access to deferrals

Taxpayers wishing to take advantage of the tax deferrals in this Decree need to use the form attached to this Decree, and which needs to be submitted no later than 30 July 2020. Submission can be made electronically or in paper form.

The Decree took effect on 8 April 2020 when issued.