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Tax management

Decree 12/2023/ND-CP extending the 2023 deadline for value added tax, corporate income tax, personal income tax and land-use rent payments

On 14 April 2023, the Government issued Decree No. 12/2023/ND-CP on extending 2023 deadline for value added tax, corporate income tax, personal income tax and land-use rent payments; details are as follows:

• Value added tax (VAT) (excluding import VAT):

Extending the tax payment deadline for VAT payable (including VAT allocated to provincial-level regions other than where the taxpayer is headquartered and occasional VAT) of tax period from March to August 2023 (in case of monthly VAT declaration), or the first quarter and second quarter of 2023 (in case of quarterly VAT declaration) of enterprises and organizations mentioned in Article 3 of this Decree. The extension period is 6 months for VAT from March to May 2023 and the first quarter of 2023. The extension period is 5 months for VAT of June 2023 and the second quarter of 2023. The extension period is 4 months for VAT of July 2023. The extension period is 3 months for VAT of August 2023. The extension starts from the deadline of VAT payment in accordance with the law on tax administration.

• Corporate income tax (CIT):

Extending the tax payment deadline for estimated CIT of 2023 first and second quarters of enterprises and organizations specified in Article 3 of this Decree. The extension period is 3 months from CIT payment deadline in accordance with the law on tax administration.

• Value-added tax, personal income tax (PIT) of business households and individuals:

Extending the VAT and PIT payment deadline of tax payable arising in 2023 of business households and individuals operating business lines mentioned in Clause 1, 2 and 3, Article 3 of this Decree. Business households and individuals must pay taxes by the hereby extended deadline 30 December 2023.

• Land rents:

Extending the deadline of land rent payment for 50% of 2023 land rent payable of enterprises, organizations, households and individuals specified in Article 3 of this Decree (renting directly under a Decision or Contract with a competent state agency in the form of annual land rental payment). The extension period is 06 months from 31 May 2023 to 30 November 2023.

Disposing costs of damaged/defective goods not deductible when calculating CIT

On 20 March 2023, the General Department of Taxation issued Official Letter No. 796/TCT-CS detailing tax policies on damaged and defective products during production. Details are as follows:

Based on Clause 1, Article 3 of Decree No. 126/2020/ND-CP, Article 4 of Circular No. 96/2015/TT-BTC stipulating deductible and non-deductible expenses when determining taxable income, in principle, when a company has defective or damaged goods during the production process that cannot be recycled and must be disposed/destroyed, other than cases prescribed by the Law on CIT, the value of the destroyed goods is not deductible when determining CIT taxable income.

PIT declaration of foreigners

On 21 March 2023, Hanoi Tax Department issued Official Letter No. 13182/CTHN-TTHT guiding PIT declaration of foreigners as follows:

For a foreign worker (of Japanese nationality) who is a resident of Vietnam, taxable income includes income arising inside and outside the Vietnamese territory, regardless of the place of income payment, as prescribed in Article 1 of Circular No. 111/2013/TT-BTC of the Ministry of Finance.

When a resident of Vietnam receives income that, under the law of Japan and according to treaties between the Government of the Socialist Republic of Vietnam and the Government of Japan, is taxable in Japan, the law of Vietnam allows the individual to deduct from their income tax in Vietnam, an amount equivalent to the income tax paid in Japan.

Implementation of PIT deduction must comply with Article 22 of the Vietnam – Japan Tax Treaty and must observe principles specified in Article 48 of Circular No. 205/2013/TT-BTC. Procedures for offsetting the foreign PIT with PIT payable in Vietnam shall observe Clause 3, Article 62 of Circular No. 80/2021/TT-BTC.