OFFICIAL DISPATCH GUIDING DECREE NO. 43/2020/ND-CP REGARDING TAX PAYEMNT EXTENSION

31 August, 2020

On May 20, 2020, the Ministry of Finance issued Official Dispatch no. 5977/BTC-TCT on the implementation of Decree no. 41/2020 regarding corporate income tax (CIT) and value-added tax (VAT) payment extension.

Extension of CIT payment:

  1. The remaining CIT payable according to the settlement of the 2019 tax year:
  • Excluding quarterly CIT temporarily paid by Article 4.6 of Decree no. 91/2014/ND-CP and Article 17 of Circular no. 151/2014/TT-BTC;
  • Maximum of 20% of the total tax payable in the whole year according to the settlement.
  1. In case the enterprise has a CIT period according to the fiscal year that does not coincide with the calendar year: the extension of tax payment shall be determined in accordance with the enterprise’s CIT period.
  2. If the taxpayer additionally reports the 2019 CIT settlement dossier by the Law on Tax Administration, the increased amount shall be sent to the tax authority before the deadline of extension: ” The extended tax amount is determined according to the principle at Point a, of which the payable tax for the whole year according to the settlement is based on the additional declaration dossier. “
  3. In case there is a conclusion of the 2019 CIT settlement’s inspection before the deadline of extension, then:
  • The total extended tax amount is determined according to the principle at Point a, of which the tax payable for the whole year is based on the inspection’s conclusion.
  • The extension is 05 months from the end of the deadline for submission of CIT settlement dossier for the 2019 tax year.

Extension of VAT:

  1. Subjects eligible for tax and land rent payment extension shall pay VAT in head office and the VAT in localities where out-of-province contraction and interprovincial construction is conducted.
  2. For contractors eligible for VAT payment extension, the State Treasury shall not deduct VAT (within the extension) on:
  • Payment for a volume of construction works conducted by state budget capital;
  • Payment for construction works conducted by state budget capital of ODA project which is subject to VAT.

The Official Dispatch shows a great effort from authorities in facilitating businesses, organizations, households and individuals that are stricken by Covid-19 pandemic through tax payment extension measures. Individuals and enterprises may carefully research on Official Dispatch no. 5977/BTC-TCT in order to protect their legitimate rights.

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