Policy proposals to Legislature

As corporate income tax, VAT tax, and land rent are subject to the competence of the National Assembly, in the second quarter, the Government submitted proposals to the National Assembly and the National Assembly Standing Committee to approve four resolutions on:

(i) Resolution 107/2020/QH14 of the National Assembly on extension of the time limit for agricultural land use tax exemption prescribed in the Resolution No. 55/2010/QH12 dated November 24, 2010 of the National Assembly on agricultural land use tax exemption and reduction.

(ii) Resolution No. 116/2020/QH14 of the National Assembly on reduction in corporate income tax payable in 2020 for enterprises, cooperatives, public service providers, and other organizations.

(iii) Resolution No. 954/2020/UBTVQH of the National Assembly Standing Committee on adjustment of personal income relief tax rates.

Under the resolution, personal relief for tax payer is VND 11,000,000/month (previously was VND 9,000,000/month) while dependent relief for each dependent is VND 4,400,000/month (previously was VND 3,600,000/month).

(iv) Resolution No. 979/2020/UBTVQH14 of the National Assembly Standing Committee on amending and supplementing Sub-section 2, Section I of the Environment Protection Tariffs prescribed in Clause 1, Article 1 of the Resolution No. 579/2018/UBTVQH14 dated September 26, 2018 of the National Assembly Standing Committee on Environment Protection Tariffs.

Government’s policies

On April 8, the Government promulgated Resolution No. 41/2020/ND-CP on deferral of payment of taxes and land rental, which took place on the same day.

This is considered a relief measure for taxpayers amid the COVID-19 pandemic.

The decree shall be applicable to enterprises, organizations, households, and individuals operating in agro-forestry-fishery sector; food processing and manufacturing, garment and textile; straw and plastic products; metallurgy, mechanical engineering; and construction. 

Other beneficiaries include 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 COVID-19 affected customers. 

The decree specifies duration of extension for payment of value added tax, corporate income tax, personal income tax for households and individuals doing business, and land rental.

For example, deadline for payment of the VTA due for March, April, May, and June of 2020 is extended for five months.

On May 29, the Government promulgated Resolution No. 84/NQ-CP on tasks and solutions to support production and business activities and to promote public investment during the COVID-19 pandemic.

Under the Resolution, the Government decided to reduce 15% of the payable land rent in 2020 for enterprises, organizations, households and individuals which the Government lease land directly in accordance to Decision, Contract issued by relevant authority and under annual rental payment, have to stop production and business due to the impact of Covid-19 epidemic.

Interest rates shall be reduced by 2% for direct loans, indirect loans for small and medium enterprises from Development Fund for small and medium enterprises.

Registration fee shall be reduced by 50% when registering domestically manufactured or assembled cars until the end of 2020 to stimulate domestic consumption.

Under the Government’s Decree No. 114/2020/ND-CP guiding the implementation of National Assembly's  Resolution No. 116/2020/QH14, an enterprise with a total revenue in 2020 not exceeding VND200 billion shall be entitled to 30% reduction of corporate income tax (CIT) payable this year.

Total revenue in 2020 serves as the basis for determining the subjects eligible for tax reduction is the total revenue in the CIT period of 2020, including all sales, processing and service charges, which an enterprise is entitled to in line with current regulations.

This Decree applies to CIT taxpayers including: Enterprises established under the provisions of Vietnamese law; organizations established under the Law on Cooperatives; non-business units established under the provisions of Vietnamese law; other organizations engaged in income-generating production and business activities.

On April 24, Prime Minister Nguyen Xuan Phuc signed Decision No. 15/2020/QD-TTg on implementation of policies on assistance for people affected by COVID-19 pandemic.

An employee shall be entitled to financial support if fully meets the following conditions:

(i) Sign in a labor contract or working contract before April 01, 2020 and is participating in compulsory social insurance;

(ii) Has terminated the labor contract or working contract from April 01, 2020 to the end of June 15, 2020 but is not eligible for unemployment benefit as prescribed by law;

(iii) Has no income or his/her income is lower than the near-poverty level as prescribed./.