Tax administration

Payment deferral of tax and land rent

On 08th April 2020, the Government issued Decree No. 41/2020/ND-CP (Decree 41) about tax and land rent deferral. Decree 41 includes regulation for the deferral of the payment for Value Added Tax (VAT), Corporate Income Tax (CIT), Perspnal Income Tax (PIT) and land rent for the following subjects:

– Enterprises, organizations, households and individuals (tax payers) that are manufacturer in agriculture, forestry, aquaculture; Production and processing of food; textiles; garments; manufacture of leather and leather products; wood treatment and manufacture of products from wood, bamboo, rattan (except furniture); manufacture of products from straw and plaiting materials; manufacture of paper products; manufacture of rubber and plastic products; manufacture of products from other non-metallic minerals; metal production; mechanical working; metal treating and coating; manufacture of electronics, computers and optical products; manufacture of automobiles and other motor vehicles; furniture production; construction.

– Taxpayers that operate in the following business lines: Transport and warehousing; accommodation, food and drink; education and training; healthcare and social assistance; real estate trading; Employment services; travel agencies, tourism services and auxiliary tourism services; Composing, art and entertainment; library, archive, museum operation and other artistic activities; sports and entertainment; cinemas

– Taxpayers that are manufacturers of prioritized ancillary industry products or key mechanical products.

– Small enterprises and microenterprises shall be determined in accordance with the Law on Assistance for Medium and Small Enterprises

The abovementioned taxpayers shall apply the regulation as follows:

– For VAT: VAT incurred during March, April, May, June of 2020 (for taxpayers declaring tax monthly), during the 1st and the 2nd quarter of 2020 (for taxpayers declaring tax quarterly) may be deferred for 05 months from the deadlines for VAT payment prescribed by tax administration laws.

– For CIT: CIT payable declared in the 2019 finalization return and in the 1st and the 2nd quarters of 2020 will be deferred for 05 months form the deadline for CIT payment prescribed by tax administration laws.

– The deadline for paying VAT and CIT incurred in 2020 of household and individual businesses in the abovementioned business lines is deferred to 31st December 2020.

– For land rent: Deadline for annual payment of rents that are due in beginning of 2020 under decisions or contracts that state the abovementioned business lines will be deferred for 05 months from 31st May 2020.

Taxpayers eligible for tax payment deferral shall submit applications for tax and land rent payment deferral using the form enclosed in this Decree to the supervisory tax office. The application shall include all payments of tax and land rent deferred and be submitted together with the monthly or quarterly tax declaration returns according to the tax administration laws by 30 July 2020.

This Decree comes into force from the day on which it is signed.


Exemption for tax and customs inspection in 2020 in case of no violation indicator

On 13th March 2020, the Ministry of Finance issued Instruction No. 02/CT-BTC about the implementation of the solutions to enforce the prevention of Covid-19. The instruction requires the departments of the Ministry of Finance to prepare the Decrees about the extension, decrease, exemption of taxes and fees for the companies that are affected by Covid-19 and the Resolution to increase the individual deduction for employees.

Regarding the tax and customs inspection, the Ministry of Finance requests the tax offices, customs offices not to conduct the periodically inspection in 2020 in case there is no indicator of violation to help companies overcome the difficulties due to Covid-19.


Issuance of invoice for gifts

The General Department of Taxation issued Official Letter No. 871/TCT-CS on 02 March 2020 about invoice issuance for gifts. According to Clause 1, Article 5 of Circular No. 119/2014/TT-BTC, Export Processing Enterprises (EPE) shall issue invoice for goods used as gifts by using the invoices for companies in the non-tariff area.


Union fee payment of the companies affected by Covid-19 is delayed

Vietnam General Confederation of Labor issued Official Letter No. 245/TLĐ about the payment deferral of union fees for companies affected by Covid-19 (the number of employees who are subject to compulsory social insurance and stop working accounts for 50% or more of the total number of employees who are subject to compulsory social insurance). Accordingly, deadline for the union fee payment for the first 6 months of 2020 is extended to 30 June 2020 and shall be extended to 31 December 2020 in case the Covid-19 does not ease up and companies are still in difficulty.


Accounting and Auditing

Route to apply Vietnam Financial Reporting Standards (VFRS) following International Finanicial Reporting Standards (IFRS)

Decision No. 345/QD-BTC issued on 16 March 2020 by the Ministry of Finance, proposes to apply the VFRS as follows:

Stage 1 – Preparation (from year 2020 to 2021): The Ministry of Finance prepares the translation of IFRS, conduct training courses, issues guidelines to apply IFRS in Vietnam.

Stage 2 – Testing (From year 2022 to 2025): Some companies shall be chosen to apply IFRS in preparing consolidated financial statements. FDI companies can choose to apply IFRS voluntarily in case they ensure to provide and explain clearly the information about their liability to the State budget with the authority offices.

Stage 3 – Compulsory Implementation (from year 2025): Companies that must apply IFRS to prepare consolidated financial statements include: parent company of SOE, listed-companies, large-scale public companies. Other compannues also can apply IFRS in case they ensure to provide and explain clearly the information about their liability to the State budget with the authority offices.