Newsletter

Circular guiding the implementation of a number of articles of the Law on Tax Administration and Decree No. 126/2020/ND-CP issued on 19 October 2020 by the Government

On 29 September 2021, the Ministry of Finance issued Circular No. 80/2021/TT-BTC (Circular 80). The tax returns and other forms specified in this Circular shall be applicable to tax period starting from 1 January 2022. Tax finalization declaration for the tax period 2021 shall also use the returns/forms specified in this Circular.

This Circular takes effect from 1 January 2022.

This Circular annuls Circular No. 156/2013/TT-BTC, Circular No. 99/2016/TT-BTC, Circular No. 31/2017/TT-BTC, Circular No. 208/2015/TT-BTC, Circular No. 71/2010/TT-BTC, Circular No. 06/2017/TT-BTC, Circular No. 79/2017/TT-BTC and several contents of other legal documents.

30% reduction of land rent in 2021 for enterprises affected by the Covid-19 pandemic

On 25 September 2021, the Prime Minister issued Decision No. 27/2021/QD-TTg regarding reduction of 2021 land rent for enterprises affected by the Covid-19 pandemic. Details are as follows:

– Applicable subjects:

Organizations, establishments, enterprises, households and individuals currently leased land to use directly from the State, under a decision or contract of a competent state authority and pays annual land rental (hereinafter, “tenants”).

This Decision applies to both tenants who are not eligible for land rental exemption/reduction and tenants who are receiving land rental reduction according to the provisions of relevant laws on land use.

– Reduction amount:

30% reduction of 2021 land rent for tenants stated above; exclusive of late land rent payment before 2021 and late payment interests (if any).

The reduction in land rent is calculated based on land rent payable of 2021. In case a tenant is currently receiving a reduction in land rent, 30% reduction shall be calculated based on the reduced land rent payable, in accordance with legal regulations.

This Decision takes effect from the date of signing.

Invoice

Circular regulating invoices and evidence documents

On 17 September 2021, the Ministry of Finance issued Circular No. 78/2021/TT-BTC guiding the implementation of a number of articles of the Law on Tax Administration dated 13 June 2019 and Decree No. 123/2020/ND-CP issued by the Government on 19 October 2020 regarding invoices and evidence documents. Some highlights of Circular 78 are as follows:

– Authorization to issue e-invoices: a seller of goods or the provider of services who is an enterprise, economic organization, or other organization, may authorize a third party (must be a related party of the seller, is eligible to issue e-invoices and is not currently subject to discontinuance of e-invoice use) to issue e-invoices on its behalf for sales of goods and services.

– Handling faulty e-invoices:

In case a seller issues an e-invoice for advance payment before or while providing a service that is later cancelled or terminated, the seller must cancel the issued e-invoices and notify the tax office on the invoice cancellation.

In case the e-invoice is made without model number, invoice serial or has incorrect invoice number, the seller shall adjust the invoice without canceling the invoice or issuing a replacement.

For errors regarding the invoiced amount, the seller shall adjust up (positive amount) or down (negative amount) according to the actual situation.

Revision of tax returns related to adjusted or replaced e-invoices (including canceled e-invoices) shall comply with the provisions of tax administration laws.

This Circular takes effect from 01 July 2022.

Mandatory use of e-invoices under Decree No. 123/2020/ND-CP in some provinces and cities from November 2021

On 20 September 2021, the General Department of Taxation issued several Decisions on the plan to mandate electronic invoices in a number of provinces and cities. Details are as follows:

Mandating the use of e-invoices in enterprises, economic organizations, business households and business individuals in the following provinces and cities: Hanoi, Ho Chi Minh City, Hai Phong, Quang Ninh, Binh Dinh, Phu Tho (except for some cases where necessary conditions are not satisfied) starting from November 2021.

The implementation of e-invoice mandate for enterprises, economic organizations, business households and individuals in the above provinces and cities shall comply with regulations on e-invoices under the Law on Tax Administration No. 38/2019/QH14, Decree No. 123/2020/ND-CP issued by the Government on 19 October 2020 regulating invoices and evidence documents, and Circular No. 78/2021/TT-BTC dated 17 September 2021 issued by the Ministry of Finance.

The Decisions take effect from the date of signing.

Value-added Tax (“VAT”)

Rejection of VAT refund when converting from a regular enterprise to an export processing enterprise (EPE)

On 9 September 2021, the General Department of Taxation issued Official Letter No. 3393/TCT-CS providing guidance on VAT refund. Details are as follows:

EPEs are not value-added taxpayers. At the time of submitting its application for VAT refund, if an enterprise has finished converting to an EPE, its investment project shall not be eligible for VAT refund.

Enterprises that underwent change of ownership or enterprise restructure (in accordance with the Law on Enterprises) are entitled to VAT refund. The conversion from a regular enterprise to an EPE is not subject to the cases of enterprise restructure prescribed under the Law on Enterprises.

Expenses for severance allowance not in accordance with legal regulations are not deductible when calculating CIT

On 28 September 2021, Hanoi Tax Department issued Official Letter No. 36670/CTHN-TTHT on CIT treatment of severance allowances. Details are as follows:

In case a company pays severance allowance to employees not in accordance with the provisions of the Labor Code and the Law on Social Insurances, the expenses shall not be deductible when calculating CIT.

Labor and Social insurance

Payment to employees and employers affected by the Covid-19 pandemic using the Unemployment Insurance Fund

On 24 September 2021, the Government issued Resolution No. 116/NQ-CP on supporting employees and employers affected by the Covid-19 pandemic using the Unemployment Insurance Fund. Details are as follows:

1. Financial support for employees affected by the COVID-19 pandemic using the Unemployment Insurance Fund

a) Applicable subjects

– Labors participating in unemployment insurance regime as of 30 September 2021 (excluding employees of State agencies, political organizations, socio-political organizations, the People’s armed forces and other public non-business establishments whose expenditures are guaranteed by the State budget).

– Labors who have stopped participating in unemployment insurance regime due to termination of their labor contracts from 1 January 2020 to 30 September 2021, whose unemployment insurance premium payment periods are reserved according to the provisions of the law on employment, excluding persons receiving monthly pensions.

b) Payment amount

The support amount is based on the period of unemployment insurance premium payment, for which unemployment benefits have not been claimed, specifically as follows:

– Unemployment insurance payment period under 12 months: VND 1,800,000/person.

– Unemployment insurance premium payment period from 12 months to less than 60 months: VND 2,100,000/person.

– Unemployment insurance premium payment period from 60 months to less than 84 months: VND 2,400,000/person.

– Unemployment insurance premium payment period from 84 months to less than 108 months: VND 2,650,000/person.

– Unemployment insurance premium payment period from 108 months to less than 132 months: VND 2,900,000/person.

– Unemployment insurance premium payment period from 132 months or more: VND 3,300,000/person.

c) Budget: approximately VND 30,000 billion from the Unemployment Insurance Reserve by the end of 2020.

d) Implementation period: from 01 October 2021 to not later than 31 December 2021.

2. Reducing unemployment insurance premiums for employers affected by the COVID-19 pandemic

–  Reduction amount:

Contribution rate reduced from 1% to 0% of total monthly salaries.

–  Applicable period

12 months from 01 October 2021 to 30 September 2022.