The Covid-19 epidemic, which has lasted from 2019 to the present time, has shown no sign of stopping, causing significant changes in the global economy, and business entities are the clearest evidence for affected by disease. In order to support business entities and encourage the spirit of Vietnamese business owners and foreign investors, the State issued Resolution No. 406/NQ-UBTVQH15 regarding of income tax reduction policies and tax reduction for enterprises, business households and individuals.

Policy to reduce 30% of CIT payable in 2021 Application period: Revenue in the tax period 2021

Conditions of application:

Revenue in 2021 is from VND 200 billion or less and lower than the revenue of 2019. For enterprises newly established or restructured (consolidation, merger, division, separation) in 2020, 2021 then only need the revenue in 2021 from 200 billion VND or less. Revenue in a tax period is determined as follows: all sales, processing, service provision and business activities in the form of business cooperation contracts, including price subsidies, surcharges and extras enjoyed by enterprises, excluding deductions from revenue, revenue from financial activities and other incomes. For newly established or restructured enterprises, in a tax period that has not operated for full 12 months, it will be divided equally by the number of active months to determine revenue. In case the revenue during the operation period calculated in 12 months is more than 200 billion VND, it will not be eligible to enjoy the tax reduction policy. In case the operating time is less than 03 months and is added to the tax period of 2021 for tax calculation, the revenue to enjoy the policy is only applicable to 12 months of the tax period of 2021.

Determine the amount of corporate income tax to be reduced

The formula to determine the amount of CIT reduction = (income tax payable – incentives enjoyed) x (multiply) 30%
Enterprises shall declare CIT reduction according to the form issued by the Ministry of Finance in Circular No. 80/2021/TT-BTC, self-responsibility for the correct and complete declaration, other responsibilities in accordance with the law on tax administration.

VAT reduction policy:  Application period: from November 1, 2021 to December 31, 2021.

Conditions of application:

Establishments producing and trading in the following goods and services: Transportation services (railway transport, water transport, air transport, other road transport); Lodging; Food Service; services of travel agencies, tour operators and support services, related to the promotion and organization of tours;  Publishing products and services; cinematographic services, television program production, sound recording and music publishing; works of art and services for composing, art, and entertainment; services of libraries, archives, museums and other cultural activities; sports, entertainment and entertainment services.

Note: Excludes publishing software and goods and services produced and traded in the form of online.

For example, if the VAT rate applied to goods and services is 10%, during the period of application, the tax rate will be 7%.

In case of VAT calculation according to the method of percentage on revenue, 30% of the percentage rate will be reduced to calculate value added tax. When making an invoice, in the column “To be paid” write the full amount of goods and services before the reduction, in the line “Add money for goods and services” write the number that has reduced 30% of the rate on revenue, VND time note: “reduced… (amount) equivalent to 30% of the rate for calculating value-added tax according to Resolution No. 406/NQ-UBTVQH15”.

The policy of exempting money for late tax payment

Application period: Late payment interest arising in 2020 and 2021

Conditions for application: Late payment interest arising in 2020, 2021 of debts of tax, land use levy, and land rent for enterprises and organizations (including dependent units, business locations) incurred a loss in the tax period 2020.

Determination of exempted late payment interest:

The tax authority makes a decision based on tax administration data and the taxpayer’s application file. If the late payment has been paid, the late payment will not be exempted.

Procedure to perform:

– The taxpayer makes a written request for exemption from late payment, clearly stating the loss incurred in the tax period in 2020 according to Form No. 01/MTCN Appendix II issued under Decree 92/2021/ND-CP sent to directly to the tax authority by electronic or postal form.

– Taxpayers who have been inspected, examined or audited shall enclose the minutes or decisions, conclusions, and notification of inspection, examination and audit results (the original or a copy certified by the taxpayer).

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