Newsletter

General Tax Administration

CIT incentives for projects manufacturing supporting industry products

On 4 June 2021, the Government issued Decree No. 57/2021/ND-CP supplementing Point g, Clause 2, Article 20 of Decree No. 218/2013/ND-CP on CIT incentives for investment projects manufacturing supporting industry products. According to Decree No. 57/2021/ND-CP, enterprises with new or expanded investment projects implemented before 1 January 2015, which manufacture products specified in the list of supporting industry products preferred for development, satisfy all requirements for investment projects manufacturing supporting industry products prescribed in Law No. 71/2014/QH13, and have been granted a certificate of incentives for production of supporting industry products by the competent authority, shall be entitled to CIT incentives. Details of cases entitled to incentives, as well as how to determine the incentive applicable period are specified in Article 1 of this Decree.

This Decree takes effect from 4 June 2021.

Value-added Tax (VAT), Personal Income Tax (PIT), and tax administration applied to business households and individuals

On 1 June 2021, the Ministry of Finance issued Circular No. 40/2021/TT-BTC guiding VAT, PIT, and tax management applied to business households and individuals.

Business households and individuals having incomes from production and business activities at VND 100 million or less for the calendar year are not required to pay VAT and PIT. Business households and individuals are responsible for accurate and complete tax declaration and timely submission of tax returns.

Business households and individuals may declare and pay their taxes according to 3 methods, including periodic declaration, spot-declaration/payment (each time the business incurs taxes), or fixed tax payment method. Regulations related to the selection of these methods are detailed in the Circular.

This Circular takes effect from 1 August 2021.

Value-added Tax (“VAT”)

Additional subjects under 5% VAT rate

On 11 June 2021, the Ministry of Finance issued Circular No. 43/2021/TT-BTC amending Clause 11, Article 10 of Circular No. 219/2013/TT-BTC dated 31 December 2013, specifying additional subjects under 5% VAT rate as follows:

Medical equipment and tools, including machines (such as scanners, specialized equipment for surgery/wound treatment, etc.), medical instruments (such as ambulance vehicles, pulse measuring equipment, contraceptive devices, etc.), other medical supplies (such as vaccines, masks, rubber gloves, bandages, etc.), other medical equipment that has been granted Import License or Circulation Registration Certificate or a Receipt of Application to declare medical standards, and medical equipment subject to specialized management by the Ministry of Health (according to Circular No. 14/2018/TT-BYT dated 15 May 2018 and other supplemented legal documents).

A more detailed list of all applicable medical equipment and tools can be found in this Circular.

Corporate Income Tax (“CIT”)

Overtime payment for hours exceeding the overtime limitation can be deductible

On 7 May 2021, Bac Ninh Tax Office issued Official Letter No. 794/CTBNI-TTHT on CIT treatment as follows:

When a company hast to let its employees work overtime in excess of the limit of overtime hours prescribed in the Labor Code, in case the company receives consent from its employees, has notified the competent agency in charge of labor and employment management in writing, and has been approved by the said agency, its overtime payment for hours exceeding the overtime hour-limit is deductible when calculating CIT. The payment must have sufficient evidence.

Extension of CIT payment deadline in case the fiscal year is different from the calendar year

On 24 May 2021, Hanoi Tax Office issued Official Letter No. 18037/CTHN-TTHT on the extension of CIT payment deadline according to Decree No. 52/2021/ND-CP for the case the fiscal year is different from the calendar year.

In case a company is eligible for CIT payment deadline extension under Article 2, Decree No. 52/2021/ND-CP and the company’s fiscal year is different from the calendar year, the deadline extension shall be determined based on the company’s fiscal year.

Labor

Automatic extension of temporary residence status for foreigners affected by the Covid-19 pandemic

On 4 June 2021, the Immigration Department – Ministry of Public Security announced the continuation of automatic extension of temporary resident status for foreigners affected by the Covid-19 pandemic.

1. Foreigners who enter under the visa exemption category, enter with an electronic visa or a tourist visa from 1 March 2020, shall continue to have their temporary resident status automatically extended until 30 June 2021, can leave Vietnam during the above period without having to first complete procedures of extending temporary resident status. In case of entry before 1 March 2020, if it can be proved that the person is stuck in Vietnam due to the Covid-19 epidemic, or if he or she can produce a certified Diplomatic note (with Vietnamese translation), or a certificate by a Vietnamese competent authority that the person has been quarantined due to Covid-19 related reasons, or other force majeure reasons, then the person’s temporary residence status is also automatically extended until 30 June 2021. The person must present the diplomatic Note or Certificate when he or she leaves Vietnam.
2. Foreigners under the automatic extension of temporary residence status still must declare their temporary residence status and report their medical status.

3. Foreigners to whom the above section 1 does not apply shall comply with current regulations of the law of Vietnam.