Regulations for removing difficulties and supporting taxpayers issued

The Ministry of Finance has closely followed the directions of the Government and submitted to competent authorities to issue new policies and support packages in the field of taxes and fees to help businesses and organisations, taxpayers to maintain and develop production and business activities.

The Hanoi Tax Department has always proactively updated policies and solutions to remove difficulties and supported the development of production for taxpayers, which were issued and deployed promptly following the spirit and goals of policy. The tax authority has also correctly and flexibly applied the Law on Tax Administration provisions and guiding documents in situations to support and remove obstacles and difficulties for taxpayers affected by the pandemic.

Recently, the Hanoi Tax Department has issued an official dispatch related to the regulation on penalties for the late submission of tax declaration during the implementation of Directive 17/CT-UBND of the Hanoi People's Committee.

If the taxpayer is an organisation or individual whose has headquarters are located in the blockade area under the decision of competent authority due to the Covid-19 pandemic, if they must perform the obligation of submitting tax declaration during the quarantine period (including the period of social distancing under the document of the Prime Minister, the Government Office, competent State authorities) but cannot submit tax declaration dossiers following the law, leading to late submission, they will not be sanctioned for an administrative violation.

This exemption complies with the provisions of Clause 4, Article 11 of the Law on Handling of Administrative Violations, which is "an administrative violation due to a force majeure event".

According to the Hanoi Tax Department, there are also regulations guiding policies on supporting and removing difficulties in current legal documents when taxpayers face difficulties or suffer damage due to encountering force majeure clause. For example, the regulation on the deadline extension of tax payment; exempting late payment interest; exemption and reduction of monetary penalties for tax administrative violations specified in the Law on Tax Administration for each case.

Value-added tax policies are specified in Article 14 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding value-added tax. Accordingly, input value-added tax of goods and services used for the manufacturing and trading of taxable goods and services is fully deductible, including input value-added tax that is not compensated for lost value-added taxable goods.

For cases of uncompensated losses that are deductible for input value-added tax including natural disasters, fires, cases of loss that are not compensated by insurance, damaged goods, expired use must be destroyed. Business establishments need sufficient dossiers and documents proving cases of uncompensated losses for tax deduction.”

Regarding the excise tax policy, Article 9 of the Law on Special Consumption Tax 27/2008/QH12 clearly states that taxpayers who produce goods subject to excise tax face difficulties due to natural disasters or accidents will enjoy reduced tax. The rate of tax reduction is determined based on actual losses caused by natural disasters or unexpected accidents, but it must not exceed 30% of the payable tax amount in the year the damage occurs and does not exceed the value of damaged property after compensation (if any).

Regarding corporate income tax policy, Circular No. 96/2015/TT-BTC of the Ministry of Finance stipulates on deductible and non-deductible expenses when determining taxable income related to force majeure.

Regarding personal income tax policy, Article 5 of the Law on Personal Income Tax No. 04/2007/QH12 stipulates that taxpayers who face difficulties due to natural disasters, fires, accidents, fatal diseases affecting their ability to pay taxes will be considered for tax reductions corresponding to the extent of the damage but not exceeding the payable tax amount.

For the policy of collecting land rents and water surface rents, Article 20 of Decree No. 46/2014/ND-CP of the Government on the collection of land rents and water surface rents stipulates specifically on conditions for land rent and water surface rent reduction. It also stipulates the reduction of land rent to be used for agricultural, forestry, aquaculture and salt-making purposes damaged by natural disasters or fires.

Regarding non-agricultural land use tax policy, Article 10 of the Law on Non-agricultural Land Use Tax No. 48/2010/QH12 stipulates taxpayers face difficulties due to force majeure events if the value of land and houses on land damage is more than 50% of the taxable price are exempt from tax. In addition, taxpayers are also entitled to a 50% reduction of the payable tax amount if they face difficulties causing by force majeure events. If the value of damage to the land and houses on the land is from 20% to 50% of the taxable price.

Finally, regarding the natural resource tax policy, Article 9 of the Law on Natural Resources Tax No. 45/2009/QH12 stipulates when natural resource taxpayers encounter natural disasters, fires, and unexpected accidents that cause damage to declared resources and paid tax, they will be considered for an exemption or reduction of tax payable for the number of natural resources lost. If the tax has been paid, the paid tax will be refunded or deducted from payable natural resource tax amount of the following period.