Introduction
At a recent session in mid-September held by the Standing Committee of the National Assembly (SCNA), the Minister of Finance proposed a draft of the main provisions of a new Government’s Decree (“the Decree”). This Decree will be issued for the purpose of guiding in details the implementation of the Resolution which has just been agreed and issued by the SCNA regarding solutions to support businesses and the people negatively affected by the pandemic of COVID-19 (“the Resolution”), with the total supporting amount expected to be up to VND 21,000 billion . The contents of the Decree include the exemption and reduction of tax payments and other obligations applicable to enterprises, cooperatives, business households and business individuals, and shall immediately take effect in 2021.
Corporate Income Tax (CIT):
A reduction of 30% of the CIT amount to be paid in the tax period of 2021 shall be applied to “enterprises” that are regulated in the Decree and satisfy the following criteria: (i) Total revenue in 2021 shall not go beyond VND 200 billion ; (ii) Total revenue in 2021 decreases as compared to that in 2019. Criterion (ii) shall not be applied to enterprises newly established, transformed, re-organized, dissolved or going bankrupt in the tax period of the years 2020 and 2021.
“Enterprises” as understood and applied in this Decree are listed as there below:
a. Enterprises established in accordance with Vietnamese laws;
b. Cooperatives;
c. Non-business units established in accordance with Vietnamese laws;
d. Other organizations established in accordance with the laws of Vietnam having income sourced from business activities.
For enterprises that have subsidiaries and business locations, the total revenue shall include the revenues of these establishments shown in the annual consolidated financial statements.
Value Added Tax (VAT)
Enterprises shall be entitled to a 30% reduction in payable VAT on goods and services in specific business lines as follows:
Transportation, accommodation and catering services; travel agency, TPOs ;
Publication, cinema, television program production; artistic creation and entertainment; libraries, museums, cultural, sports and entertainment activities (excluding software publishing and such goods and services as provided on online platforms).
Enterprises shall be responsible for isssuing separate respective invoices for those businesses eligible for VAT reduction and submitting declarations together with the VAT declaration. In the case an enterprise has issued an invoice before the reduction, it is necessary to make a record or written agreement between the seller and the buyer, and concurrently, the seller shall issue a modified invoice to correct the errors and send it to the buyer together with return of the reduced VAT amount.
The duration of this tax reduction is drafted and expected to last from October 1 until the end of 2021.
Regarding business households and business individuals:
For all business households, individuals that are residents and performing in all kinds of business activities, except for production and service of digital contents, shall be supported with the exemption from incurred taxes in the remaining two quarters of 2021. The applicable incurred taxes for this policy in the Decree shall be comprised of personal income tax, VAT, special consumption tax, natural resource tax and environmental protection tax. Tax payers shall be guided to self-determine their exempted tax amounts in their tax declaration form for business activities of the months in the third and fourth quarters of 2021. For the cases where the excess tax has been paid, taxpayers shall be transferred for clearing in the following periods .
Regarding deferred payment interest:
The Decree also proposes to exempt some deferred payments arising in the tax periods between 2020 and 2021. Specifically, based on the taxpayer’s written request for tax exemption and the decision of the competent tax authority to exempt the deferred payments, such deferred payments of taxes, land use levies, and land rents incurred by enterprises and organizations, including their subsidiaries and business locations, shall be entitled to the exemption, provided that their losses are incurred in the tax period of 2020. The decision on exemption of deferred payments(if any) shall be issued within 10 working days, sent via the electronic method and published on the tax department’s website. However, it should be noted that for cases wherein taxpayers have already paid deferred payment before the Resolution of the SCNA takes effect, they shall not be retrospective.

Relevant topic: DECREE 18 REGARDING TAX POLICIES FOR IMPORTS AND EXPORTS