Tax exemptions, reductions, and deferrals for organizations and businesses

Local tax authorities have been instructed to inform, guide, and support taxpayers affected by natural disasters in applying for tax exemptions, reductions, and deferrals of tax payments, land rents, and other state revenues as prescribed by law. They are also required to coordinate with relevant agencies to verify damage and process applications promptly.

Under the Law on Tax Administration 38/2019/QH14, taxpayers suffering material losses caused by natural disasters, catastrophes, fires, epidemics, or unexpected accidents are eligible for tax payment deferrals. According to Article 62, the deferral period must not exceed two years from the tax due date, during which taxpayers are exempt from penalties and late payment interest.

An application for deferral must include a written request specifying the reasons, amount, and proposed extension period, along with documents proving the damage. Tax authorities must process valid applications within 10 working days; if documents are incomplete, they must notify the applicant within three working days for supplementation.

Under Articles 59 and 140 of the same law, taxpayers incurring losses from natural disasters are exempt from late payment interest and administrative penalties, provided that the total exemption amount does not exceed the value of damaged assets or goods.

Detailed implementation is guided by Circular 80/2021/TT-BTC, Decree 125/2020/NĐ-CP, and Decree 102/2021/ND-CP. Taxpayers must submit a damage assessment record, inspection report, or insurance compensation documents (if any).

Businesses applying the credit method that suffer losses of goods or assets due to storms or floods may deduct input value-added tax (VAT) for uncompensated damages, provided they have complete supporting documents.

Imported goods donated or sponsored for disaster relief are exempt from VAT. The receipt of such aid is carried out through relevant ministries, provincial People’s Committees, or the Vietnam Fatherland Front in accordance with the 2024 Law on VAT.

Enterprises incurring storm-related losses may include the uncompensated portion of damages as deductible expenses when calculating corporate income tax (CIT). Supporting documents must include a damage valuation record, insurance claim documents (if applicable), and related evidence. Expenditures for disaster recovery or assistance to affected employees are also deductible if supported by legitimate records, confirmation minutes, and valid invoices as stipulated in Circular 96/2015/TT-BTC.

Tax reductions and support for households and individual businesses

Taxpayers producing goods subject to special consumption tax (SCT) who face difficulties due to natural disasters may receive a reduction of up to 30% of the payable tax in the year of the loss, not exceeding the post-compensation value of the damaged assets.

Taxpayers subject to resource tax who incur losses from natural disasters may be exempted or receive a reduction corresponding to the damaged portion of the resources. Taxes already paid may be refunded or credited to the next tax period.

For non-agricultural land use tax, if the damage accounts for 20% to under 50% of asset value, a 50% tax reduction applies; if the damage exceeds 50%, the taxpayer is granted full exemption under Law 48/2010/QH12.

Households and individual businesses suffering from storm or flood damage are eligible for reductions in personal income tax (PIT), SCT, and resource tax, with reductions proportionate to the extent of losses but not exceeding the total tax payable.

Household businesses may defer VAT and PIT payments until December 31, 2025. In cases of severe material damage, tax deferral may be extended for up to two years under the Law on Tax Administration.

Leaders of the Department of Taxation have instructed local tax offices to assign contact officers to assist taxpayers in preparing documentation, recovering lost or damaged tax records, and ensuring timely and lawful processing to help citizens and businesses restore production and stabilize operations.