VIETNAM TO REDUCE MANY TAXES AND FEES IN 2021

Many taxes and fees will be further reduced in 2021 and the Ministry of Finance has proposed extending the deadline for paying VND115 trillion of taxes and land rents.

In late 2020, the Ministry of Finance issued Circular 112/2020/TT-BTC on rates of charges and fees supporting business operations and social security in response to the Covid-19 pandemic.

Accordingly, 29 fees and charges will be reduced by 50 - 100% from January 1 to June 30, 2021, including fee for utilizing environmental data; evaluation fee of construction investment project, evaluation fee of technical design; fee for construction estimation; and franchising fee for operation of airports or customs airport entry/exit fees for foreign flights.

Specifically, the fee for issuing passport, exit permit and AB stamp will be reduced by 20%; the fee for granting citizenship identity by 50%; the industrial property fee by 50%; the fee in the health sector by 30%; the vehicle fee for transportation business by 10-30%; the fee for food safety and hygiene by 10%; the assessing and issuing fee for international tour business licenses and domestic tour operation by 50%; and customs fees and airport entry/exit fee applied to foreign flights by 10%.

From July 1, 2021, the rates will resume as before the Covid-19 pandemic outbreak.

Environmental tax on aviation fuel slashed by 30% in 2021

Together with the above 29 types of fees and charges, on January 20, the Standing Committee of the National Assembly agreed with the proposal of the Ministry of Finance when it issued Resolution 1148 in support of the aviation industry.

Accordingly, the environmental duty on aviation fuel will be VND2,100 per liter, applied from January 1, 2021 to December 31, 2021.

The rate will be VND3,000 per liter from January 1, 2022.

This resolution officially took effect from January 1, 2021.

Railway infrastructure fee cut by 50%

By February 2021, the Ministry of Finance issued Circular 12/2021/TT-BTC on collection, declaration and payment of the use fee on railway infrastructure, which will be reduced by 50% to support those affected by the Covid-19 pandemic.

Accordingly, the railway infrastructure fee proposed by the Ministry of Finance will be slashed to 4% from 8%. Railway transport companies will declare the charge to tax authorities and settle payment to the State budget. This circular will be valid through December 31, 2021.

Also in February, the Ministry of Finance issued Circular 03 on exemption and reduction of corporate income tax applied to science and technology companies specified in the Government’s Decree 13/2019/ND-CP on science and technology firms.

According to the Circular, the rate and duration of preferential CIT exemption or reduction are specified as follows:

Science and technology companies are entitled to CIT exemption or reduction under Clause 1, Article 12 of the Government's Decree 13/2019/ND-CP dated February 1, 2019: Tax exemption for four years and a 50% reduction for the next nine years.

This circular takes effect till March 1, 2021.

Extended deadline for payment of VND115 trillion of land tax and rent proposed

To extend the tax payment deadline for entities affected by the Covid-19 pandemic, the Ministry of Finance submitted Document 11/TTr-BTC, dated January 22, 2021, on the scheme for drafting the decree on extended deadline for land tax and rent, applicable in 2021, to the Government.

In particular, the Ministry of Finance submits to the Government for approving the policy on delayed payment of value-added tax, corporate income tax, personal income tax and land rental for enterprises, business households and individuals affected by Covid-19 pandemic. The amount of tax and land rental to be extended was estimated at VND115 trillion.

Specifically, the ministry proposed extending the payment of value-added tax of VND68 trillion for five months, from January to June 2021; corporate income tax of VND40.5 trillion in the first quarter and second quarters; VAT and personal income tax of VND1.3 trillion applied to business households and individuals until December 31, 2021; and land rent of VND4.4 trillion in the six-month period of 2021.

The Ministry of Finance asked the Government for permission to elaborate the decree, which will be effective from the date of signing.

In addition, on February 4, the Ministry of Finance submitted to the Government an instruction on permits for excluding the fund spent for the fight against Covid-19 pandemic when determining taxable corporate income under Clause 8, Article 3 of Resolution 128/2020/QH14 of the National Assembly on the State budget estimate in 2021.

In addition, the Ministry of Finance is reviewing and assessing applied solutions to provide advice and put forth proposals regarding tax and fee to competent authorities.

Source: VCCI