Following the similar policy in 2020, the Ministry of Finance is collecting the people’s opinion on the draft Decree on extending tax payment and land rent for enterprises before submitting it to the Government for approval. This great news reflects the assisting hand that the State has offered businessmen while the “uninvited guest” Covid-19 is still lingering and the weight of business burden is still on their shoulders. The draft Decree will apply for the value-added tax (VAT), corporate income tax (CIT), personal income tax (PIT), and land rental – the most important and essential taxes and financial obligations of a majority of enterprises in the economy.
Which enterprises are expected to reap benefits?
According to the draft, the enterprises may receive the incentives including:
- enterprises in agriculture, forestry and fishery sector, F&B, textiles, electronics, construction, transportation, education, tourism, entertainment, real estate, and many other business lines of manufacturing and service which have been listed therein.
- manufacturers of products of prioritized ancillary industries such as textiles, leather, electronics-computing, manufacturers of automobile, etc.; key mechanical products (automobile, tractor, electrical devices, etc.);
- small and micro-sized enterprises (the number of employees participating in social insurance is less than 10-100 people/year, the highest revenue is 10-100 billion VND/year, the highest capital source is 03-50 billion VND, depending on basis of business sector);
- Foreign bank branches and credit institutions supporting customers amid the Covid-19 epidemic, as confirmed by the State Bank.
To enjoy the incentives, all the above enterprises must complete the tax payment and land rental that have been extended and respective late payment interest (if any) of 2020 prior to May 20, 2021. This policy is also applied to branches or affiliated units of the enterprises operating the business lines as mentioned above.
How long can the extension last?
- For VAT:
|Tax period||Extension period||Deadline|
|March 2021||05 months||20/9/2021|
|April 2021||05 months||20/10/2021|
|May 2021||05 months||20/11/2021|
|June 2021||05 months||20/12/2021|
|1st quarter of 2021||05 months||30/9/2021|
|2nd quarter 2021||05 months||31/12/2021|
|July 2021||04 months||20/12/2021|
|August 2021||03 months||20/12/2021|
- For CIT: 03 months after the deadline of the 1st and 2nd quarter of 2021;
- For land rental: 06 months after May 31, 2021.
What to do to be entitled to the extension?
The draft proposes that the enterprise must submit a request for extension to the tax authorities enclosed with the tax records by post, online or directly prior to May 20, 2021. Any delay will hinder the right to extend of the enterprise. After synthesizing the people’s opinions, the Government will consider the draft and decide. Due to the urgent nature of this policy, the proposed Decree takes effect as soon as it is signed, which may be at the beginning of April 2021.