Newsletter

Tax incentive for business affected by natural disaster

On 13 September 2024, the General Department of Taxation issued Official Letter No. 4062/TCT-CS as follows:

Tax deferral

– Article 62 of the Law on Tax Administration No. 38/2019/QH14 dated 13 June 2019 stipulates that tax may be deferred for up to 02 years from the day following the tax filing deadline in case of natural disasters.

– Procedures and documents are implemented according to Article 24 of Circular No. 80/2021.

Exemption from late payment interest

– Clause 8, Article 59 of the Law on Tax Administration No. 38 stipulates that taxpayers may be exempted from paying the late payment interest in case of natural disasters.

– Procedures and documents are implemented according to Article 23 of Circular No. 80/2021.

Exemption from tax administrative penalty

– Clause 1, Article 140 of the Law on Tax Administration No. 38 stipulates exemption from administrative penalties for tax violations in case of damage caused by natural disasters, the total fine exempted shall not exceed the loss of assets or goods.

– Procedures and documents are implemented according to Clause 6, Article 1 of Decree No. 102/2021.

VAT deduction

– Clause 1, Article 14 of Circular No. 219/2013 stipulates that input VAT of goods and services used for production and business subject to VAT is fully deductible, including non-compensated input VAT of goods subject to VAT that are lost due to natural disasters.

Corporate Income Tax

– Article 4 of Circular No. 96/2015 stipulates that enterprises are allowed to include in deductible expenses:

+ Value of losses due to natural disasters that are not compensated.

+ Sponsor for addressing the consequences of natural disasters.

+ Payment to support families of workers affected by natural disasters.

– Procedures and documents are implemented according to Article 4, Circular No. 96/2015.

Special Consumption Tax

– Article 9 of the Law on Special Consumption Tax No. 27/2008 stipulates that the special consumption tax can be reduced by no more than 30% of the tax payable in the year of the damage caused by natural disasters and not exceeding the value of damaged assets after compensation (if any).

– The dossier is specified in Article 55 of Circular No. 80/2021.

Natural Resources Tax

– Clause 1, Article 9 of the Law on Natural Resources Tax No. 45/2009 stipulates that tax can be exempted or reduced for the amount of natural resources damaged by natural disasters.

– Procedures are implemented according to Article 56 of Circular No. 80/2021.

Non-agricultural Land Use Tax

– Clause 9, Article 9 and Clause 4, Article 10 of the Law on Non-agricultural Land Use Tax No. 48/2010 stipulate that in the event of a natural disaster, tax exemption is granted if the value of damage to land and houses is over 50% of the taxable price; 50% reduction in tax payable if the damage to land and house is from 20% to 50% of the taxable value.

– Procedures are implemented according to Article 57 of Circular No. 80/2021.

Tax policy on bank deposit interest

On 8 October 2024, Bac Giang Tax Department issued Official Letter No. 7097/CTBGI-TTHT as follows:

In case a company has idle money deposited at a commercial bank with a term of 1 to 3 months and generates deposit interest, this deposit interest is determined as financial revenue, which is not required to declare and pay VAT according to the provisions of Article 5 of Circular No. 219/2013/TT-BTC. When receiving deposit interest from the bank, the company does not have to issue an invoice for this deposit interest income.