W&A: Tax Newsletter Update September 2024

In this edition of the newsletter, W&A would like to provide our readers with the latest updates on new legal regulations and important policies in the field of taxation.

1. EXTENSION FOR TAX PAYMENTS

On September 11, 2024, the Ministry of Finance issued Decision No. 2127/QĐ-BTC, announcing the amendment and supplementation of administrative procedures in the field of taxation, falling under the Ministry’s management authority. Concurrently, the government has promulgated decrees relating to the extension of deadlines for tax payments and land rent in 2024, creating favorable conditions for businesses and individual households to navigate economic difficulties.

Value-Added Tax (VAT) Payment Deadlines

According to Decree No. 64/2024/NĐ-CP dated June 17, 2024, businesses will be granted an extension for VAT payment deadlines for tax periods from May to September 2024 (for monthly tax declarations) or for the second and third quarters of 2024 (for quarterly tax declarations). Specifically:

• A 5-month extension for VAT due in May, June, and the second quarter of 2024.

• A 4-month extension for VAT due in July.

• A 3-month extension for VAT due in August.

• A 2-month extension for VAT due in September and the third quarter of 2024.

This measure is aimed at providing timely support to alleviate short-term financial pressures for businesses.

Corporate Income Tax (CIT) Payment Deadlines

Businesses will be granted a 3-month extension for the provisional CIT payments due for the second quarter of 2024. This policy applies to all businesses, ensuring they have the necessary resources to sustain operations.

Personal Income Tax (PIT) and Land Rent Payment Deadlines

Individual business households and sole proprietors will be granted an extension for the payment of VAT and PIT arising in 2024, with the deadline extended to December 30, 2024. Regarding land rent, businesses and individual business households will be granted a 50% extension for the second installment of land rent for 2024, with the extension lasting two months, starting from October 31, 2024.

Applications for tax and land rent extensions must be submitted no later than September 30, 2024, to benefit from these incentives.

Special Consumption Tax (SCT) Payment Deadlines for Domestically Manufactured and Assembled Automobiles

Decree No. 65/2024/NĐ-CP dated June 17, 2024, extends SCT payment deadlines for businesses engaged in the manufacturing or assembly of automobiles in Vietnam. These businesses will be granted an extension for SCT payments from May to September 2024, with the deadline extended to November 20, 2024.

In cases of additional SCT arising from supplementary tax declarations, the extended payment period will also apply. Branches and subsidiaries of automobile manufacturing or assembly companies are also eligible for the extension if they are engaged in such activities.

The application for an SCT extension must be submitted no later than November 20, 2024.

Effective Date and Applicability

Decrees 64/2024/NĐ-CP and 65/2024/NĐ-CP are effective from the date of issuance and remain in force until December 31, 2024. Businesses and individual business households must pay attention to the deadlines to ensure they benefit from these tax extensions in 2024.

2. VAT REFUND FOR INVESTMENT PROJECTS – ESSENTIAL PROCEDURES TO KNOW

On September 9, 2024, the Ministry of Finance issued Decision No. 2111/QĐ-BTC, announcing amendments to administrative procedures in the tax field, applicable to VAT refunds for investment projects. This decision introduces updated VAT refund procedures based on Circular No. 13/2023/TT-BTC and took effect from September 9, 2024.

Required Documentation for VAT Refund Requests

Under the new regulations, from September 9, 2024, VAT refund applications for investment projects must include the following documents:

• An application for the refund of state budget revenues: According to Form No. 01/HT, issued in Appendix I of Circular No. 80/2021/TT-BTC.

• A copy of the investment registration certificate: Or investment certificate or investment license if the project is required to undergo certification procedures.

• A copy of the land use rights certificate, land allocation decision, or land lease contract: Applicable to projects that involve land use rights or require construction permits for construction projects.

• A copy of the capital contribution documents: To verify that capital has been injected into the project.

• A copy of the license or approval for conducting business in conditional sectors: For investment projects engaged in conditional business sectors.

• A decision establishing the project management unit or assigning project management responsibilities: Along with the organizational regulations and operations of the branch or project management unit (if applicable).

• A list of invoices and goods purchase documents: According to Form No. 01-1/HT, issued in Appendix I of Circular No. 80/2021/TT-BTC (for cases where electronic invoices have not yet been submitted to the tax authorities).

Submission Methods

Taxpayers can submit VAT refund applications through two methods:

• Direct submission: At the competent tax authority.

• Online submission: Through the General Department of Taxation’s electronic portal, the National Public Service Portal, or other relevant public service portals, or through T-VAN service providers.

Processing Time

The timeframe for processing VAT refund applications is clearly defined:

• 6 working days: For applications eligible for refund before verification.

• 40 working days: For applications requiring verification before refund.

This shortened processing time aims to help businesses and investors receive VAT refunds quickly, providing maximum support for the implementation of investment projects.

Effective Date

Decision No. 2111/QĐ-BTC took effect on September 9, 2024, and applies to all VAT refund applications for investment projects submitted from this date onward.

3. GUIDANCE ON VAT REFUNDS FOR EXPORTED GOODS AND SERVICES

On August 30, 2024, the General Department of Taxation issued Official Letter No. 3879/TCT-KK, providing detailed guidance on calculating the VAT refund for exported goods and services. This document offers crucial instructions for businesses regarding accounting and supplementary declarations in the event of errors in tax filings, as well as how to determine refundable input VAT for export activities.

Supplementary Tax Declarations

The General Department of Taxation emphasizes that if businesses detect errors in their submitted tax returns, they are entitled to submit supplementary declarations in accordance with Article 47 of the Tax Administration Law No. 38/2019/QH14 and Clause 4, Article 7 of Decree No. 126/2020/NĐ-CP. Businesses must calculate the additional tax payable, supplementary tax (if any), and late payment interest based on the supplementary declaration. The additional tax must be paid in full to the state budget as prescribed by law.

However, if supplementary declarations are submitted after a tax audit or inspection has been announced by the tax authority or another competent body, the business will be subject to administrative penalties for tax management under Articles 142 and 143 of the Tax Administration Law. Businesses should be aware of this regulation to avoid penalties for misreporting.

Accounting for Input VAT on Export Activities

For businesses engaged in both export and domestic activities, separate accounting for input VAT related to each activity is required. Only input VAT associated with exported goods and services is eligible for a refund.

If businesses are unable to separately account for input VAT, the input VAT related to exported goods and services will be determined based on the revenue ratio. This ratio is calculated by dividing the revenue from exported goods and services by the total revenue from all goods and services. This method applies to VAT periods from the previous filing period to the current refund period, as stipulated in Article 2 of Circular No. 25/2018/TT-BTC.

4. GUIDELINES ON CUSTOMS PROCEDURES AND IMPORT TAXES FOR OUTSOURCED PRODUCTION OF EXPORT GOODS, ISSUED

On September 12, 2024, the General Department of Customs issued Official Letter No. 4325/TCHQ-TXNK, providing guidance on customs procedures and import taxes for goods imported for export production when outsourced production is involved. This document is based on the provisions of Circular No. 38/2015/TT-BTC and highlights several important points for import-export businesses, particularly significant changes compared to current regulations.

Contact W&A for more detailed information:

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📧 Email: nam.phan@waco.com.vn

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