EXTENDING THE DEADLINE FOR PAYING TAXES AND LAND RENTS

Extending the deadline for paying taxes and land rents

In furtherance of Directive No. 11/CT-TTg of the Prime Minister, on March 26^th 2020, the Minister of Finance signed the Government Report No. 3540/TTr-BTC on the extension of the deadline for tax payments and land rents (hereinafter referred to as the “Decree”) to support enterprises, households and individuals affected by the COVID-19 disease. After receiving the opinions of the ministries, branches and localities, on April 03^th 2020, the Ministry of Finance issued Official Dispatch No. 3915/BTC-CST reporting to the Prime Minister on adding several sectors and subjects entitled to extend the time for paying tax and land rents.

On March 27^th 2020, the General Department of Taxation also issued Official Dispatch No. 1307/TCT-CS regarding the Decree on the extension of tax payments and land rents, requesting the provincial – level Tax Departments to provide information to enterprises, taxpayers know and follow to implement when the Decree is signed. The main contents of the Decree are specified as follows:

1. Regarding the subjects entitled to extend the time limit for payment of Value Added Tax, Personal Income Tax and land rent, the Ministry of Finance has proposed enterprises, organizations, individuals, groups of individuals and households operating business activities in the following sectors:

• Agricultural, forestry and fishery production activities;
• Manufacturing of food products; Manufacturing of textiles; Manufacturing of wearing apparel; Manufacturing of footwear; Manufacturing of rubber products; Manufacturing of computer, electronic; Manufacturing and assembling cars; Manufacturing and assembling cars with 09 seats or less;
• Manufacturing of leather and related products; Manufacturing of wood and of products of wood and cork, except furniture; Manufacturing of products of straw and plaiting materials; Manufacturing of paper and paper products; Manufacturing of plastics products; Manufacturing of other non-metallic mineral products; Manufacturing of metals; Machining; treatment and coating of metals; Manufacturing of furniture;
• Business of railways transport; Land transport; Water transport; Air transport; Warehousing and support activities for transportation
• Business of accommodation and food services;
• Activities of travel agency, tour operators and support services related to tourism promotion and organization;
• Real estate activities;
• Employment activities; Libraries, archives, museums and other cultural activities; Amusement and recreation activities;
• Especially, enterprises, organizations, households and individuals engaged in the production of supporting products prioritized for development; key mechanical products are also subject to the extension of tax payment and land rents.

Supporting industry products prioritized for development are determined under the Government’s Decree No. 111/2015/ND-CP d ate November 3^th, 2015 on development of  supporting industry; key mechanical products identified under the Prime Minister’s Decision No. 319/QD-TTg dated March 15^th, 2018, approving the Strategy for development of Vietnam’s mechanical engineering industry up to 2025, with a vision to 2035

(Production and business activities are pursuant to the Prime Minister’s Decision No. 27/2018/QD-TTg on July 6^th 2018, promulgating the Vietnamese economic system)

2. Regarding support: The Ministry of Finance shall submit to the Government the application for extension of payment of Value Added Tax (VAT), Corporate Income Tax (CIT), Personal Income Tax (PIT) and land rent, the extended period for specific subjects is as follows:

• Regarding VAT (except for import VAT), the extended deadline for tax payment for the arising VAT amounts payable in the tax periods of March, April, May and June 2020 (for cases of VAT be declared monthly) and tax period of the first and second quarter of 2020 (for cases of VAT be declared quarterly). The extension is 05 months from the due date of VAT payment in accordance with regulations of law on tax administration.

In case enterprises eligible for tax payment extension have branches or affiliates in provinces other than its headquarter (excluding units engaged in construction activities, installation and sale of goods outside the province, declaring provisional VAT at the rate of 1% and 2%) and declare VAT separately with the tax agencies directly managing them, then such branches and affiliates are also eligible for the extension of VAT payment if they have production and business activities in economic sectors fields mentioned above.

• Regarding CIT: Extension of the deadline for tax payment for the remaining payable CIT amounts according to the balance sheet of 2019 but not yet paid to the State Budget and the temporarily paid CIT amount of the first and second quarters of 2020. Extension time is 05 months from the due date of CIT payment in accordance with regulations of law on tax administration.
• Regarding PIT and VAT for households and individuals, the due date shall be extended until December 15, 2020.
• Regarding land rents: Extension of land rent payment for the amount to be paid in the first period of 2020 of enterprises, organizations and individuals that are leased land under decisions and contracts of the competent authorities in the form of annual land rent payment which, on the Decision or the Contract has the purpose of production and business in the abovementioned economic sectors.

Note: If an enterprise engages in production and business activities of various economic sectors, including economic sectors eligible for the extension, the enterprise may extend the due date for all VAT and CIT payable.

3. Regarding approval procedures: At the proposals of Ministry of Finance, in order to simplify administrative procedures and promptly remove difficulties for enterprises, organizations and individuals, taxpayers shall only send their Request for extension of tax payments and land rent (according to the form attached to this Decree) to the directly managing tax agency for all the extended periods one (01) time, on the date of submission of monthly (or quarterly) value-added tax returns in accordance with the provisions of law on tax administration, but no later than July 30^th 2020. After  July 30^th 2020, the tax payment and land rent extension will not be allowed.

The Ministry of Finance also proposed that, in order not to waste time for the parties, the Draft Decree stipulates that tax agencies are not required to notify taxpayers of the acceptance of extension of tax payments and land rents, which means taxpayers need to proactively register for extending soon. If during the extended period, the tax agency have basis to determine that the taxpayer is not subject to the extension, the tax agency shall notify in writing and the taxpayer must pay in full the tax amounts, land rents and late payment interest in the extended time into the State Budget.

The Ministry of Finance requests the Decree to take effect immediately upon its signing date.