Vietnam offers Deferral on Tax and Land rent payment to support enterprises in Covid-19 pandemic

Due to the damages of Coronavirus on the domestic economy, the Decree 41/2020/ND-CP was issued on tax and land rent deferral to assist affected enterprises during difficulty period on 8 April 2020. It came into force from the date of signing.

Applicable entities including to enterprises, organizations, households, and individuals operating in agro-forestry-fishery sector; food processing and manufacturing, garment and textile; straw and plastic products; metallurgy, mechanical engineering; and construction; producing auxiliary and key mechanical products and micro and small-sized enterprises, credit organizations, branches of foreign banks which support their COVID-19 affected customers.

Deferred period for taxes and land rental are specified as follow:

Value Added Tax (VAT) obligation for the period from March to June 2020 or Quarter I and II/2020 shall be extended to 05 months which indicates the payment of VAT of first quarter of 2020 would be extended to September while second quarter to December 2020.

Corporate income tax, extension would be given to the remaining sums of 2019, provisional tax of the assessment period of the first and the second quarter.

Household and individual businesses, the deadlines for paying value added tax and corporate income tax was extended to December 31.

Payment of land use fees would also extended five months from May 31.

Deferral application procedures:

A taxpayer eligible for tax deferral shall submit an application for tax and land rent deferral (electronically or other method) to the supervisory tax authority. The deadline for sending an application for tax and land rent deferral is 30 July 2020.

Taxpayers will be responsible for self-determination of their eligibility for deferral request as prescribed in this Decree. The tax authority shall not inform the taxpayer whether the application is accepted or not.

In the case of the tax authority uncovers that the taxpayer is not eligible for deferral, the taxpayer must fully pay the outstanding tax, penalty (if any) and late payment interest determined by the tax authority to the State Treasury.

This regulation aim to support domestic enterprises dealing with difficulties from the outbreak of Coronavirus.

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