Overview

On January 11, 2022, the National Assembly issued Resolution No. 43/2022/QH15 on fiscal and monetary policies for supporting socio-economic recovery and development. To maintain the Government’s progress in supporting and promoting a new-normal throughout the country post–COVID-19, some new financial support policies have been passed. Recently, the Government has issued Decree No. 34/2022/ND-CP on a deferral of payment for value-added tax (“VAT”), corporate income tax (“CIT”), personal income tax (“PIT”) and land leasing fee in the year of 2022 (“Decree 34”). Decree 34 took effect from May 28, 2022 until the end of December 31, 2022. The eligibility requirements and procedures for this Decree are highlighted as follows. 

Scope of application

Eligible business lines are clearly listed and specified for the preference under Decree 341. These are categorized into the following groups: 

– Producing and manufacturing: e.g. Agriculture, food and beverage, textile, garment, timber, chemical, petroleum products; construction; drainage and wastewater treatment; etc. 

– Operating Business: e.g. Transport, warehousing, accommodation; education and training; healthcare and social assistance; real estate business; travel and tourism agency; art, composition, entertainment, sports, cultural activities; broadcasting, computer programming and computer-related activities; information service activities; Mining ancillary services, and so on. 

– Manufacturing of prioritized ancillary products or key mechanical products. 

– Small and micro-enterprises in accordance with the Law on Assistance for small and medium enterprises in 20172 and Decree No. 80/2021/ND-CP. 

– Credit institutions and foreign bank branches providing assistance for customers in line with regulations of the State Bank of Vietnam3. 

It is noteworthy that maintenance and installation of machinery and equipment business fall within the scope, but its manufacturing is not4. In addition, for consultancy services (including legal services), it seems that these are not regulated under Decree 34, except for real estate and computer-related sectors5. 

If enterprises have branches, these branches are also entitled to the deferral of tax payments, except for branches ineligible for the deferral under Decree 346. 

Applicable procedures

Decree 34 provides a broad range with clear guides for taxpayers to become eligible applicants. For any entitlement to the deferral of payment under Decree 34, taxpayers are responsible for self-determining their eligibility for any applicable payment extension thereto. Any mentioned eligible business lines contained in this Decree are deemed to be applicable for all of its sub-level business lines, as prescribed under Decision No. 27/2018/QD-TTg of the Prime Minister dated July 06, 2018 on Vietnam Standard Industrial Classification7. Moreover, in case a business obtains various business lines which include eligible lines under Decree 34, it will be granted an extension for the entire amount of applicable tax payments8. 

An application shall include the entire amount of all eligible taxes and land leasing fees prescribed in Decree 34 and shall be submitted one time to the supervisory tax authority. The period of submission is the same as the regular period of tax declaration but in all cases, not later than September 30, 20229. 

The tax authority is not obligated to notify the taxpayer of their deferral granting. In case during the deferral period the tax authority inspects that the taxpayer is not eligible for deferral, the tax authority shall send a written notification to the taxpayer of the ineligibility for deferral. Then, the taxpayer shall fully pay the tax, land rents and late payment interest that have accrued over the elapsed period10. 

Extensions of deadlines for tax and land lease payments

VAT 

VAT payment during the period from March to August of 2022 (for monthly declared VAT) and the period of the two first quarters (for quarterly declared VAT) are granted with deferred deadlines. Consequently, the new deadline for monthly VAT payment of March 2022 is October 20, 2022, while April 2022 follows up one month later. From May to August of 2022, the new due date is December 20, 2022. For quarterly VAT payments of Quarter 1 (Q1) and Quarter 2(Q2) of 2022, the new deadlines are at the end of October and December, 2022 respectively11. 

CIT 

Businesses are entitled to an extension of three months for CIT payments incurred in Q1 and Q2 of 202212. 

PIT 

Not only the payable PIT of business households and individuals who are eligible but their payable VAT in 2022 are also granted a deferral for payment until the date of December 30, 202213. 

Land leasing fee 

It is notable that 50% of the payable amount of annual land leasing fees in 2022 are allowed to be paid in the deferral period of six months from May 31, 2022 to November 30, 2022. This deferral period shall also apply to the cases where the land lessees obtain multiple land lease decisions or contracts with the State14.