Tiếng Việt
中文 (中国)
日本語
The new support package that the Vietnam Ministry of Finance is developing is expected to reduce 50% of the payable tax amount arising from production and business activities in the third and fourth quarters of 2021 for all business households and business individuals in Vietnam.
The recent complicated developments of the Covid-19 epidemic, especially in July, have severely affected small and medium-sized enterprises, business households, business individuals, and several service activities such as travel, transportation, accommodation and meals, movie screenings, sports, entertainment, and recreation…
Nguyen Quoc Hung, Director of the Tax Policy Department (Ministry of Finance), said that the Ministry of Finance is developing a scenario to reduce and extend taxes for businesses in the last 6 months of the year according to the National Assembly’s Resolution to Supporting businesses against the impact of the Covid-19 epidemic.
The need to reduce tax during the Covid-19 crisis in Vietnam
Specifically, according to this scenario, the amount of corporate income tax payable this year for businesses and organizations will be reduced by 30% as applied to 2020, applicable to enterprises with annual revenue not exceeding 200 billion VND.
In particular, a 50% reduction in payable tax amounts arising from production and business activities of the months in the third and fourth quarters of this year for business households and business individuals doing business in all fields, business lines, and conducting tax declaration, tax payment.
The Ministry of Finance also has a plan to reduce the value-added tax rate by 30% for businesses and organizations operating in several service sectors.
In addition, the Ministry of Finance applies the policy of exempting late payment interest arising in 2020 and 2021 (2 years affected by the Covid-19 epidemic) for businesses and organizations that incur continuous losses in the years 2018, 2019, 2020.
According to the Ministry of Finance’s estimate, the implementation of solutions proposed in this draft resolution can reduce budget revenue by about 20,000 billion VND.
An enormous package of relief to help businesses during the Covid-19 crisis
In addition to the proposal to reduce direct tax obligations for businesses, the Ministry of Finance is also examining and detailing to the Prime Minister a solution to reduce land rent for 2021.
In general, the solutions have been implemented by the Standing Committee of the National Assembly, the Government and the Ministry of Finance since the beginning of 2021 and the additional proposed solutions mentioned above, Mr. Hung said the amount of support for businesses and Vietnamese citizens in 2021 is about 138,000 billion VND. In which, the package of extension, exemption hand reduction of taxes, fees, charges, and land rent has been issued about 118,000 billion VND.
At the first session of the 15th National Assembly, the meeting’s resolution was issued, assigning the Government to implement several urgent solutions to cope with the Covid-19 epidemic. In particular, the Ministry of Finance was assigned to research and propose a new Covid-19 support package related to taxes and fees. The ministry is finalizing and will report to the National Assembly Standing Committee and the Government for the final decision.
ASL LAW is the top-tier Vietnam law firm for tax law consulting service. If you need any advice, please contact us for further information or collaboration.
