On October 30, 2022, the Government issued Decree No. 91/2022/ND-CP ("Decree 91") amending and supplementing a number of articles in Decree 126/2020/ND-CP ("Decree 126") detailing the Law on Tax Administration.
Decree 91 has some notable changes as follows:
Change on the method of determining the amount of provisional corporate income tax (“CIT”) and the occurrence time of late payment interest
Regulations on the provisional CIT in the first 3 quarters of the year must be at least equal to 75% of the tax value according to the annual tax finalization dossier in Decree 126, causing many strugglings for enterprises, due to the fact that it is very difficult to estimate the revenue and the value of CIT for the whole year at the time of provisional CIT payment for the first 3 quarters of the year (31/10). Normally, quarter 4 is a quarter that records high revenue, so the sudden increase in tax in quarter 4 will lead businesses to the risk of tax late payment, in other words, businesses will be subject to late payment interest occurring from October 31 to the time of official payment.
According to Decree 91: “The total post-tax profit that remains after making fund contributions of 04 quarters must be at least 80% of that under the annual tax finalization dossier. In case of underpayment, late payment interest shall be charged on the arrears over the period from the date succeeding the deadline for paying the remaining post-tax profit of the fourth quarter to the date preceding the day on which the arrears are paid to the state budget”.
Thus, Decree 91 has changed the method of determining the value of provisional CIT as follows:
+ Determine for 04 quarters (previously: determined for the first 03 quarters of the year);
+ Increase the minimum value of post-tax profit that enterprises must pay to 80% of the tax value according to the annual tax finalization dossier (previously: 75%);
+ Change the time of determination of late payment interest to the day following the deadline for paying provisional CIT of the 4th quarter – 31/01 (previously: determined from the deadline for paying provisional CIT of the 3rd quarter – 31/10).
This regulation is beneficial, contributing to removing difficulties and obstacles for enterprises in business activities.
Addition of the provision on the expiration of time limits
The time limits for submission of tax declaration dossiers, time limits for payment of tax, time limits for tax authorities to process applications, effective periods of decisions on enforcing the implementation of tax decisions shall comply with regulations of the Law on Tax Administration and this Decree. In case the expiration date of any of these time limits is a statutory day off, the expiration date will be the working day succeeding the day off.
Organizations and individuals that pay income without incurring tax deductions are not required to submit personal income tax ("PIT") declaration dossiers
Under the previous regulation in Decree 126 and the guidance in Section 2 of Documentary No. 2393/TCT-DNNCN dated 01/07/2021 of the General Department of Taxation on PIT declaration issued by the General Department of Taxation, all payers of income subject to personal income tax must declare PIT, regardless of whether tax deduction arises.
However, Decree 91 has added the case where tax declarants do not have to submit PIT declaration dossiers. Accordingly, even if taxable income arises but the tax deduction is not incurred in the month/quarter, the taxpayer will not be subject to tax declaration for that month/quarter.
This content has streamlined tax procedures for businesses.
Extension of the time limit for PIT declaration and payment on behalf of individuals having income from capital investment activities (shareholders receive dividends and bonuses in securities; members are credited with capital contribution from income; capital contribution by real estate, contributed capital and securities):
According to Decree 126, securities companies, fund management companies, depository banks, issuers are subject to tax declaration and payment on behalf of individuals who have income from capital investment activities. This obligation arises from the effective date of Decree 126 –05/12/2020.
However, Decree 91 has extended the deadline for tax declaration and payment until January 1, 2023.
At the same time, Decree 91 has allowed individuals who have been recorded in securities accounts from 31/12/2022 or earlier but have yet been made tax declaration and payment by the above subjects shall actively do it. These individuals will also be exempted from administrative sanctions for late declaration and will not be charged for late payment interest (if any) from 05/12/2020 to 31/12/2022[1].
Decree 91 took effect from the date of its issuance.
[1] Clause 8 Article 1 of Decree 91.
Comment: