Decree No. 101/2011/ND-CP detailing the implementation of Resolution No. 08/2011/QH13 of the National Assembly on issuing additional measures regarding taxes to address difficulties faced by businesses and individuals.

DECREE

Providing detailed implementation of Resolution No. 08/2011/QH13 of the National Assembly on issuing certain tax measures to address difficulties for businesses and individuals

Detailed implementation of Resolution No. 08/2011/QH13 of the National Assembly dated August 6, 2011 on issuing certain tax measures to address difficulties for businesses and individuals

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THE GOVERNMENT

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

Pursuant to the Law on Corporate Income Tax and the Law on Value Added Tax dated June 3, 2008;

Pursuant to the Law on Personal Income Tax dated November 21, 2007;

Pursuant to the Law on Tax Administration dated November 29, 2007;

Pursuant to Resolution No. 08/2011/QH13 dated August 6, 2011 of the National Assembly;

Considering the proposal of the Minister of Finance,

DECREE:

Article 1. Scope of Regulation

This Decree provides detailed implementation of Resolution No. 08/2011/QH13 dated August 6, 2011 of the National Assembly on issuing certain tax measures to address difficulties for businesses and individuals.

Article 2. Reduction of corporate income tax for small and medium-sized enterprises and labor-intensive enterprises in 2011

1. Reduce by 30% the corporate income tax payable in 2011 by small and medium-sized enterprises, excluding the tax calculated from income derived from lottery sales, real estate transactions, securities trading, financial services, banking, insurance, and production of goods and provision of services subject to special consumption tax, and excluding enterprises ranked as Class I or Special Class within economic groups, state-owned corporations, and companies organized under the holding company structure where the parent company is not a small or medium-sized enterprise and holds more than 50% of the subsidiary's equity capital.

Small and medium-sized enterprises referred to in this Clause (excluding public institutions) are enterprises that meet the criteria regarding capital or workforce as stipulated in Clause 1, Article 3 of Decree No. 56/2009/NĐ-CP dated June 30, 2009 of the Government on assisting the development of small and medium-sized enterprises. In cases where small and medium-sized enterprises are newly established from January 1, 2011, the capital criterion is determined based on the registered charter capital recorded in the Enterprise Registration Certificate or the Investment Certificate issued for the first time.

2. Reduce by 30% the corporate income tax payable in 2011 by labor-intensive enterprises engaged in production, processing, and manufacturing of agricultural, forestry, aquatic products, textiles, footwear, electronic components, and construction of socio-economic infrastructure projects.

Labor-intensive enterprises referred to in this Clause are enterprises with an average of over 300 employees regularly employed in 2011, excluding short-term contracts of less than three months. In cases where enterprises are organized under the holding company structure, the number of employees serving as the basis for determining the tax reduction target for the parent company does not include the number of employees of subsidiaries. The corporate income tax eligible for reduction is the tax calculated from income generated from production, processing, and manufacturing of agricultural, forestry, aquatic products, textiles, footwear, electronic components, and construction of socio-economic infrastructure projects.

Production, processing, and manufacturing of agricultural, forestry, aquatic products, textiles, footwear, and electronic components referred to in this Clause are defined according to the Vietnamese Economic Classification System promulgated together with Decision No. 10/2007/QĐ-TTg dated January 23, 2007

3. The amount of corporate income tax eligible for reduction as stipulated in Clauses 1 and 2 of this Article is the provisional quarterly tax payment and the remaining tax payable after annual settlement for 2011.

4. Enterprises must separately account for income from activities eligible for corporate income tax reduction as stipulated in this Article. In cases where separate accounting of such income is not possible, the income for calculating the tax reduction is determined based on the ratio (%) between the revenue from activities eligible for tax reduction and the total revenue in 2011.

5. Enterprises eligible for corporate income tax reduction as stipulated in this Article are those established and operating in accordance with Vietnamese law; implementing accounting systems, invoices, and documents in compliance with legal regulations and paying taxes based on declarations.

Article 3. Reduction of value-added tax, personal income tax, and corporate income tax for renting accommodation, childcare services, and providing meal services for workers.

1. A reduction of 50% on the fixed rate of value-added tax and personal income tax from July 1, 2011 to December 21, 2011 shall apply to households and individuals operating rental accommodations and dormitories for workers, students, and pupils; households and individuals providing childcare services; and households and individuals supplying meal services for workers.

The fixed rates of value-added tax and personal income tax specified in this Clause shall be determined according to the provisions of tax management laws.

2. A reduction of 50% on the value-added tax and corporate income tax payable arising from July 1, 2011 to December 31, 2011 shall apply to the provision of meal services for workers (excluding meal services provided to transportation and aviation businesses, and other business activities) by enterprises.

Enterprises benefiting from the tax reduction stipulated in this Clause must comply with the provisions set forth in Clause 5, Article 2 and Clause 3, Article 3 of this Decree.

3. Households and individuals engaged in business and enterprises benefiting from the tax reduction stipulated in this Article must commit to maintaining stable rental prices for accommodations and dormitories, childcare service fees, and meal service fees at the levels implemented in December 2010 throughout 2011.

Rental prices for accommodations and dormitories, childcare service fees, and meal service fees must be publicly displayed at the place of business and reported to the local authorities and directly managing tax agencies. In cases where inspections and audits reveal that households, individuals, and enterprises have not adhered to the price commitments stipulated in this Clause, they will not be eligible for the tax reductions under this Article.

Article 4. Exemption and reduction of personal income tax.

1. Personal income tax exemption shall apply from August 1, 2011 to December 31, 2012 for dividends distributed to individuals from investments in the securities market and from contributions to purchase shares of enterprises from dividends distributed by commercial banks, financial investment funds, and credit organizations.

2. A reduction of 50% on personal income tax shall apply from August 1, 2011 to December 31, 2012 for income derived from the transfer of securities by individuals.

3. Personal income tax exemption shall apply from August 1, 2011 to December 31, 2011 for individuals whose taxable income from salaries, wages, and business operations does not exceed the first tax bracket of the progressive tax rate table prescribed in Article 22 of the Law on Personal Income Tax.

The average taxable income received by individuals in 2011 shall serve as the basis for determining eligibility for the tax exemption stipulated in this Clause.

Article 5. Effective Date

1. This Decree shall take effect from December 20, 2011.

2. If an enterprise qualifies for different levels of tax incentives for the same item during the same period, it may choose to apply the most favorable incentive level.

In cases where an enterprise is currently enjoying corporate income tax incentives as prescribed by law, the amount of corporate income tax reduction stipulated in this Decree shall be calculated based on the remaining tax after deducting the tax benefits already enjoyed.

3. The Ministry of Finance shall provide detailed guidance and handle specific cases involving enterprises that have declared and paid the reduced tax amounts as stipulated in Articles 2 and 3 of this Decree into the state budget.

Article 6. Responsibility for Implementation

1. The Ministry of Finance shall provide guidance on implementing this Decree.

2. Provincial People's Committees and municipal people's committees directly under the central government within their jurisdiction as prescribed by law shall be responsible for directing relevant departments and local authorities at all levels to cooperate with tax agencies in promoting, urging, and inspecting the implementation of this Decree.

3. Village and Ward Tax Advisory Councils shall cooperate with local government price management agencies to confirm and monitor the implementation of the price stability commitments made by households, individuals, and enterprises engaged in business as stipulated in Article 3 of this Decree.

4. Ministers, heads of ministerial-level agencies, heads of agencies under the Government, Chairpersons of provincial and municipal people's committees directly under the central government, and relevant organizations and individuals are responsible for implementing this Decree./.