EXTENSION OF THE PAYMENT PERIOD OF VALUE ADDED TAX, CORPORATE INCOME TAX, PERSONAL INCOME TAX AND LAND RENTAL IN 2022

Due to the detrimental impact of the Covid-19 epidemic on the entire economy, on May 28, 2022, the Government has issued Decree 34/2022/ND-CP (“Decree 34”) regulating the extension of the payment period of value-added tax (“VAT”), corporate income tax (“CIT”), personal income tax (“PIT”) and land rental in 2022. Decree 34 has been taking effect from its signature date until the end of December 31, 2022.

This is an important document, which regulates updated contents and has various impacts on economic entities. In order to help Clients to be proactive in the application of and compliance with the law, ATA Legal Services would like to introduce some highlights of this legal document through the following article.

Some of the main and prominent contents mentioned in Decree 34 include:

1. Extension subject[1]

a) Enterprises, organizations, households, business households, and individuals engaged in production and business activities in the following economic sectors:

1. Manufacture sector:

• Agriculture, forestry, and fisheries;
• Food production and processing; weaving; production of costumes; manufacture of leather and related products; wood processing and production of products from wood, bamboo, and cork (except for beds, cabinets, tables, and chairs); produce products from straw, straw and plaiting materials; production of paper and paper products; manufacturing products from rubber and plastic; manufacture of other non-metallic mineral products; metal production; mechanical; metal processing and coating; manufacturing electronic products, computers, and optical products; manufacture of automobiles and other motor vehicles; manufacture beds, cabinets, tables, and chairs;
• Building;
• Publishing activities; cinematographic activities, television program production, sound recording, and music publishing;
• Exploiting crude oil and natural gas;
• Beverage production; print, copy records of all kinds; production of coke, refined petroleum products; manufacture of chemicals and chemical products; manufacture of products from prefabricated metal (except for machinery and equipment); manufacture of motorcycles and motorbikes; repair, maintenance, and installation of machinery and equipment;
• Drainage and wastewater treatment.

     ii. Business sector

• Warehouse transportation; accommodation and catering services; education and training; health and social assistance activities; real estate business;
• Labor and employment service activities; activities of travel agencies, tour businesses, and support services, related to the promotion and organization of tours;
• Creative, artistic, and recreational activities; activities of libraries, archives, museums, and other cultural activities; sports and entertainment activities; movie screening activities;
• Radio and television activities; computer programming, consulting services, and other computer-related activities; information service activities;
• Mining support service activities.

b) Enterprises, organizations, households, business households, and individuals engaged in the production of supporting industry products given development priority; key mechanical products and small and micro enterprises are defined as per the law.

c) Credit institutions and foreign bank branches implement solutions to support customers being businesses, organizations, and individuals affected by the COVID-19 epidemic in accordance with regulations of the State Bank of Vietnam.

2. Extension of the payment period of tax and land rental in 2022[2]

a) VAT (except VAT at the import stage) – for businesses and organizations

1. Tax payment extension for the payable VAT amount of the tax period:

• In case of monthly declaration: From March to August 2022.
• In case of quarterly declaration: Tax period of the first quarter and the second quarter of 2022.

    ii. Extension period (from the end of the payment period of VAT as per the law on tax administration):

• VAT amount from March to May 2022 and the first quarter of 2022: 06 months.
• VAT amount of June 2022 and second quarter of 2022: 05 months.
• VAT amount of July 2022: 04 months.
• VAT amount of August 2022: 03 months.

     iii. Additional tax declaration:

In case the additional declaration of the tax declaration dossier of the extended tax period increases the payable VAT amount to be sent to the tax authority in advance of the expiry of the extended tax payment period, the extended tax amount shall include the additional tax payable due to additional declaration.

     iv. Terms for VAT payment:

b) CIT

1. Extend the tax payment period of the CIT amount to be paid temporarily in the first quarter and second quarter of 2022.
2. Extension period: 03 months, from the end of the CIT payment period in accordance with the law on tax administration.

c) VAT, PIT – for business households, business individuals

1. Extend the payment period of VAT and PIT with the payable tax amount arising in 2022.
2. Tax payment due date: No later than December 30, 2022.

d) Land rental

1. Extension of land rental payment for 50% of the arising land rental payable in 2022.

Applicable for the aforementioned subjects who directly lease land from the State under a decision or a contract of a competent state agency in the form of annual land rental payment.

     ii. Extension period: 06 months, from 51/5/2022 to 30/11/2022.

    iii. Applicable for the case where an/a enterprise, organization, household, business household, or individual has various decisions, direct land lease contracts of the State and has different production and business activities, including economic sectors and the aforementioned fields (except for small and micro enterprises).

3. Order and procedures for extension[3]

a) Procedures for implementation: Taxpayers directly declare and pay tax with tax authorities.

1. Submit a request for an extension of the payment period of tax and land rental (“Extension Request”) for the first time or for replacement when detecting errors.
2. Submission method: Via email; directly send the hard copy to the tax office or by postal service.
3. Term of submission: Simultaneous with the submission time of monthly (or quarterly) tax declaration dossiers in accordance with the law on tax administration.
4. In case the Extension Request is not submitted at the same time as the submission of the monthly (or quarterly) tax declaration: the due date for submission is 30/9/2022. After that, the tax and land rent payment shall not be extended.
5. In case taxpayers have extended amounts belonging to different tax authorities: The tax authority directly managing the taxpayer is responsible for transmitting information and sending the Extension Request to the relevant tax authority.

  b) Notes:

1. The tax authority will not notify the taxpayer of the approval of the extension of tax and land rental payment.
2. During the extension period, if the taxpayer is not subject to the extension, the tax authority shall notify the taxpayer in writing of the non-extension and the taxpayer must pay the full amount of tax, land rental, and late payment interest to the state budget within the extended period.
3. No late payment interest shall be charged for the tax or land rental extended within the extension period. If the tax authority has already calculated the late payment interest (if any), the tax authority shall make the adjustment to remove the late payment interest.  

[1] Article 3 of Decree 34.

[2] Article 4 of Decree 34.

[3] Article 5 of Decree 34.