The Government on 8 April 2020 issued Decree 41/2020/ND-CP on extension of deadlines for taxes and land rental payment (“Decree 41”) with immediate effect to support businesses, among other subjects, affected by COVID-19 pandemic.
The relief available under Decree 41
Primarily, the decree extends deadline for payment of value added tax (VAT) excluding VAT for imports, corporate income tax (CIT), personal income tax (PIT) and land rental payment. Specifically, eligible enterprises and organizations can defer their VAT amount payable for the assessment periods of March, April, May, June of 2020 (for monthly tax declaration cases) or the first two quarters of 2020 (for quarterly tax declaration cases) for five months. They can also defer their final CIT payment of 2019 and their CIT provisional payments for the first two quarters of 2020 for a period of five months.
With respect to household businesses and individuals, the deferral of deadlines for VAT and PIT payments can be extended until 31 December 2020.
Regarding the land rental payment, enterprises, organizations, households, and individuals with direct land lease contracts with the State can defer the first installment of their annual land rental payment which are due on 31 May 2020 for five months.
The beneficiaries provided by Decree 41
It is worth noting that the relief provided by Decree 41 is only available to certain enterprises, organizations, households, and individuals. The beneficiaries under Decree 41 includes:
- Enterprises, organizations, households, and individuals operating in agricultural, forestry and fishery manufacturing; food processing and manufacturing; garment and textile manufacturing; wooden, metal, paper, plastic and rubber products manufacturing; metallurgy, mechanical engineering; electronic products, computers and optical products manufacturing; automobile manufacturing; and construction;
- Enterprises, organizations, households, and individuals operating in transportation and storage services; accommodation and catering services; training and education; medical and social assistance activities; real estate businesses; labor and employment services; travel agents, tour businesses and supporting services relating to tour promotion; artists, recreational activities, sport activities, museums and cinemas; and
- Enterprises, organizations, households, and individuals producing auxiliary and key mechanical products; micro and small-sized enterprises; credit organizations, and branches of foreign banks which support their customers affected by COVID-19 pandemic.
The required procedures to obtain the relief
Taxpayers must submit a pro forma request to the local tax authorities before 30 July 2020 to be considered for the extension of deadlines for relevant taxes and land rental payment.
For more information, please contact Giles at GTCooper@duanemorris.com or Dang Ngoc Huyen at HDang@@duanemorris.com or any of the lawyers in our office listing. Giles is Chairman of Duane Morris Vietnam LLC and branch director of Duane Morris’ HCMC office.