GOVERNMENT      

No. 63/NQ-CP

 

SOCIALIST REPUBLIC OF VIET NAM

Independence - Freedom – Happiness

Ha Noi, 25 August 2014

RESOLUTION ON TAX SOLUTIONS TO REDUCE DIFFICULTIES FOR ENTERPRISES AND TO PROMOTE THEIR DEVELOPMENT

 

The Government

Pursuant to the Law on Organization of the Government dated 25 December 2001;

Pursuant to Decree 08-2012-ND-CP of the Government dated 16 February 2012 issuing the Working Rules of the Government;

On the basis of the Report of the Ministry of Finance in Submission 95-TTr-BTC dated 28 July 2014 regarding the discussions held by members of the Government and the conclusion of the Prime Minister at the Government's regular monthly meeting held on 30 and 31 July 2014;

Resolves:

I. Tax solutions to reduce difficulties for and to promote the development of enterprises, where [such tax reductions are] under the authority of the Government and the Prime Minister of the Government:

1. To defer for a maximum sixty (60) days payment of value added tax ("VAT") on machinery and equipment imported to form fixed assets of investment projects where the total import value is 100 billion dong or more. The Ministry of Finance shall instruct tax offices to provide a tax refund first and to check [the file] later, and [to provide the refund] no later than five (5) business days after the date on  which  the  tax  office  receives  a  complete  application  file  requesting  a  tax  refund  from  an enterprise.

2. To defer [extend the period or deadline for payment of] tax for a maximum two (2) years as from the deadline, applicable to investment projects which have not yet been paid investment capital for capital construction as recorded in the  estimated State budget. The amount of  tax eligible for deferment shall not exceed the amount of the State budget debt and the deferment shall not exceed the period for which there is a State budget debt.

3. Enterprises which have the stipulated invoices and source vouchers are entitled to include in their deductible expenses, disbursements in the nature of direct welfare payments to employees; and the total of these expenses shall be capped at one month's actual average salary.

4. In the case of any investment project registered by the licensing authority which, in the initial application file for registration of the investment sent to the licensing authority, registered the amount of investment capital and investment phasing accompanied by a specific schedule, then investment projects licensed for actual implementation in the following phases shall be deemed component projects of the initially licensed investment and entitled to corporate income tax ["CIT"] incentives at the same incentive rate granted to the initial investment project. In the case of an investment project licensed before 1 January 2014, the tax incentive shall apply for the residual term of incentives calculated from 1 January 2014 (but there is no retroactive application for project implementation before 1 January 2014).

In the case of enterprises entitled to CIT incentives for the period 2009 to 2013 and which, during the process  of  production  and  business,  made  additional  regular  investment  in  machinery  and equipment, then income additionally generated [by the additional investment] is entitled to the CIT incentive (but cases in which tax liabilities have already been performed will not be reprocessed).

5. Industrial zones entitled to CIT incentives shall include industrial zones in districts of Special Grade and Grade 1 urban areas under central authority and in Provincial Grade 1 urban areas newly established from district areas as from 1 January 2009.

6. Personal taxable income of individuals shall not include benefits being their residential housing which the employer constructed and provided free of charge to them as employees working in an industrial zone, or which the employer constructed in an economic zone or geographical area with difficult or specially difficult socio-economic conditions and provided free of charge to [such] employees.

7. Applicable to transfers of real estate, individuals may elect to calculate and pay tax at 25% of the income [profit] on each occasion of a transfer, or 2% of the selling price [sale proceeds] on each transaction.

8. Applicable to transfers of securities, individuals may elect to calculate and pay tax at 20% of annual income [i.e. annual net gain] and conduct tax finalization at year end, or calculate and pay tax at 0.1% of the selling price [sale proceeds] of the securities on each transaction with no finalization at year end required.

9. Individuals and family households with business income on which they have already paid tax on a fixed amount, and individuals being insurance agents, lotteries agents and multi-level selling agents being paid income from which PIT has been withheld, are not required to conduct tax finalization.

10. Enterprises are permitted to declare and deduct input VAT when they do not yet have payment vouchers for payment not using cash because the time for payment pursuant to a contract has not yet matured.

11. Taxpayers with annual revenue of 50 billion dong [approximately USD 2.4 million] or less may declare VAT on a quarterly basis.

12. [CIT] taxpayers shall conduct tax finalization declaration on an annual basis and pay provisional CIT on a quarterly basis.   If the total of provisional payments is 20% or more less than the amount of CIT payable in accordance with the tax finalization, then an enterprise must pay interest on late payment of tax on the shortfall in excess of 20% as from 31 December of the year of the tax declaration up until the date on which the outstanding amount of tax is payable pursuant to the tax finalization.

13. The Ministry of Financial shall preside over coordination with relevant ministries and branches to make a submission to the Prime Minister to amend and add, for compliance with reality, to the list of detailed forms and criteria on scale and standards of establishments conducting socialization in sectors of education and training, occupational or vocational training, health care, culture, sports and the environment and which are entitled to policies encouraging development of socialization.

Pending amendments to the list referred to above, arrears of CIT will not be collected.

14. The Ministry of Finance shall coordinate with Vietnam Social Insurance to provide a solution to reduce by at least 50% the number of hours required to pay social insurance, medical insurance and unemployment insurance.

II. Tax solutions to reduce difficulties for and to promote the development of enterprises, where [such tax reductions are] under the authority of the National Assembly:

1. Enterprises with an investment project are entitled to CIT incentives pursuant to the law on CIT as at licensing time or as at the time of issuance of the investment certificate. If the law on CIT changes, then an enterprise may select the current CIT incentive level regulated at licensing time, or the CIT incentive level pursuant to the amended law for the residual period if the enterprise satisfies the conditions for the incentive in accordance with such new law as from its effective date.

2. Income of enterprises from implementation of new investment projects for manufacture of products on the List of Products of Support Industries Prioritized for Development shall be subject to the tax rate of 10% for 15 years, with tax exemption for 4 years and a reduction of 50% of the amount of tax payable in the following 9 years; and in a case of investment in expansion of manufacture of products on the above-mentioned List and if the enterprise satisfies one of the three criteria [set out in article 14.4] of Law 14 on CIT dated 3 June 2008 as amended by Law 32 dated 19 June 2013, then the enterprise may select the tax incentive (both the tax rate and the term of exemption and/or reduction) pursuant to the project it is currently operating for the residual term (if any), or is entitled to the exemption for 4 years and the 50% reduction of the amount of tax payable in the following 9 years with respect to that part of its income additionally created as a result of the investment in expansion.

The Government regulates the List of Products of Support Industries Prioritized for Development.

3. Income of Vietnamese enterprises from an offshore investment upon repatriation shall be entitled to tax exemption or reduction or tax will not be collected on the income from the offshore investment. The Prime Minister is assigned to issue a decision detailing this issue.

4. Investment projects capitalized [with a scale of investment capital] at a minimum of 12 trillion dong [minimum investment capital] and which is disbursed within 5 years from grant of the investment licence shall have the preferential tax rate of 10% for 15 years, shall be tax exempt for 4 years, and have a 50% tax reduction for the following 9 years on income of the enterprise from implementing the investment project in the manufacturing sector (except for a project manufacturing goods subject to special sales tax, and except for mineral mining projects). In special cases in order to attract investment, consideration shall be given to extending the duration of the 10% preferential tax rate but not beyond an extension of 15 years.

5. The tax rate of 20% shall apply in years 2014 and 2015 to enterprises operating in the agricultural sector and regularly employing more than 300 employees and off-taking the harvested product for employees not  within  geographical  areas  with  difficult  or  especially  difficult  socio-economic conditions. As  from  1 January  2016,  the  tax  rate  of  17%  shall  apply to  the  above-mentioned enterprises.

6. Non-deductible expenses prescribed in clause 2(m) of article 1.5 of the Law 32 on CIT5  shall only apply to advertising expenses.

7. PIT shall be exempt on income being salary or wages of Vietnamese crew members working for foreign shipping companies or for Vietnamese international transportation companies.

8. PIT  shall  be  exempt  on  income  of  ship-owners  providing  services  directly  servicing  offshore aquaculture [fisheries] activities.

9. Personal income prescribed in article 3.6(c) of the Law on PIT [income being winnings or prizes comprising winnings from all forms of betting and casino gambling] only applies to income from winnings in all forms of betting.

10. Input VAT shall be credited or refunded in the case of goods purchased or imported to form fixed assets of a socialization project in the sectors of education and training, occupational or vocational training, health care, culture, sports and the environment.

11. Ship-owners shall be entitled to a VAT refund for any ship newly built or upgraded to a total main engine output of 400 CV in order to conduct aquaculture [fisheries].

12. Royalties  [natural  resources  tax]  shall  not  be  collected  on  natural  water  used  for  agriculture, aquaculture [fisheries], forestry and salt production.

13. Enterprises shall determine their revenue, expenses, taxable prices and taxes payable to the State budget  in  VND  (except  where  they  pay  tax  in  a  foreign  currency  pursuant  to  Government regulations); if revenue, expenses, and taxable prices arise in foreign currency or if the taxpayer is obliged to pay tax in foreign currency but the competent authority permits payment in VND, then the enterprise must convert such foreign currency into VND at the actual trading exchange rate at the time such items arise.

14. Interest on late tax payment arising before 1 July 2013 of enterprises facing objective difficulties and which pay the original tax debt prior to 31 December 2014, will be waived. Authority to waive tax debts shall be implemented in accordance with article 1.22 of the Law amending the Law on Tax Management. The Government is assigned to regulate in detail the applicable entities being enterprises facing objective difficulties, for which interest on late tax payment will be waived as stipulated above.

15. Based on actual status and IT conditions, the Government shall regulate in detail that taxpayers need not file documents which the tax office and customs office already have, in such taxpayers' files for declaring and paying tax, conducting customs procedures and claiming tax refunds.

III.      Organization of implementation:

1. The Ministry of Finance shall preside over coordination with the Ministry of Justice, the Government Office and other relevant ministries and agencies:

(a) To make a submission to the Government to issue Decrees amending Decrees 65/2013/NĐ-CP dated 27 June 2013, 83/2013/NĐ-CP dated 22 July 2013, 209/2013/NĐ-CP dated 18 December 2013 and 218/2013/NĐ-CP dated 26 December 2013 and other legal instruments necessary to implement the solutions in Part I above, to be submitted in the third quarter of this year with abridged time-limits for the procedures;

(b) To complete a draft of a Resolution by the National Assembly regarding the solutions in Part II above, and the Minister of Finance shall submit same to the National Assembly for its decision in the eighth session [in October 2014];

(c) To disseminate information about this Resolution for the information of citizens and enterprises.

2. Ministers, heads of ministerial equivalent and Government agencies, and chairmen of people's committees of provinces and cities under central authority are responsible to arrange implementation of  the  above-mentioned  solutions  in  order  to  reduce  difficulties  for  enterprises,  strengthen supervision, provide rewards or take disciplinary action, closely monitor actual progress, and recommend any necessary measures in order to ensure prompt implementation of this Resolution.

 

On behalf of the Government Prime Minister

NGUYEN TAN DUNG

 

THEGIOILUAT.VN
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HL: 25/08/2014

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Resolution No. 63/NQ-CP dated August 25, 2014, solutions to tax in order to remove difficulties and problems and promote development of businesses

Số hiệu 63/NQ-CP Ngày ban hành 25/08/2014
Ngày có hiệu lực 25/08/2014 Ngày hết hiệu lực
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Resolution No. 63/NQ-CP dated August 25, 2014, solutions to tax in order to remove difficulties and problems and promote development of businesses
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