Resolution No. 63/NQ-CP On certain tax measures to address difficulties and obstacles and promote the development of enterprises

RESOLUTION

On some tax solutions to resolve difficulties, obstacles, and promote the development of enterprises

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THE GOVERNMENT

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

Pursuant to Decree No. 08/2012/NĐ-CP dated February 16, 2012 of the Government promulgating the Operational Regulations of the Government;

Based on the report of the Ministry of Finance (Proposal No. 95/TTr-BTC dated July 28, 2014), discussions among government members, and the Prime Minister's conclusion at the regular meeting held on July 30 and 31, 2014,

RESOLUTION:

I. TAX SOLUTIONS TO RESOLVE DIFFICULTIES, OBSTACLES, AND PROMOTE THE DEVELOPMENT OF ENTERPRISES WITHIN THE AUTHORITY OF THE GOVERNMENT AND THE PRIME MINISTER:

1. Extend the deadline for paying value-added tax on imported machinery and equipment for fixed assets of investment projects with total import value of 100 billion dong or more by up to 60 days. The Ministry of Finance shall instruct tax authorities to complete tax refunds within five working days from the date of receipt of the enterprise’s complete refund application.

2. Extend the deadline for paying taxes by a maximum of two years from the original due date for investment projects that have not been settled according to the state budget estimate, provided that the extended tax amount does not exceed the outstanding state budget amount and the extension period does not exceed the remaining state budget period.

3. Enterprises may include welfare expenses directly benefiting employees, supported by invoices and certificates as prescribed, in deductible costs, provided that the total expense does not exceed one month of actual average salary.

4. For investment projects approved by the licensing authority where the initial registration includes investment capital, phased investment plans, and specific implementation schedules, subsequent phases of such projects can be considered as part of the original project and enjoy corporate income tax incentives applicable to the initial project. For projects licensed before January 1, 2014, the tax benefits will apply from January 1, 2014, without retroactive application to activities conducted prior to this date.

For enterprises currently enjoying corporate income tax incentives during the 2009-2013 period, additional investments in machinery and equipment will allow increased profits to benefit from tax incentives (without reprocessing for already implemented cases).

5. Industrial zones eligible for corporate income tax incentives include those located in special-class cities, central cities of class I, and newly established provincial cities of class I since January 1, 2009.

6. Personal income tax shall not apply to housing benefits provided free of charge by employers to workers in industrial zones, or housing built by employers in economic zones, difficult socio-economic areas, or extremely difficult socio-economic areas, provided free of charge to workers.

7. For real estate transfer activities, individuals may choose to pay a 25% tax on each transfer income or a 2% tax on each sale price.

8. For securities trading activities, individuals may opt to pay a 20% tax annually on income or a 0.1% tax on each sale price of securities, without annual settlement.

9. Individuals engaged in business under the turnover tax method, and individual insurance agents, lottery agents, and multi-level marketing sellers whose income is subject to withholding tax by the payer, are exempt from annual settlement.

10. Enterprises may declare and deduct input VAT even if they do not yet have non-cash payment receipts due to the payment not being due according to the contract.

11. Taxpayers with annual revenue of 50 billion dong or less shall file VAT quarterly.

12. Taxpayers shall file annual returns and pay provisional corporate income tax quarterly. If the total provisional payments are 20% or more below the final tax liability, the enterprise must pay interest on the difference between the provisional and final amounts from December 31 of the tax year to the date of payment.

13. The Ministry of Finance, in collaboration with relevant ministries and sectors, shall submit to the Prime Minister proposals to amend and supplement the detailed list of types, scale criteria, and standards of socialized facilities in education, training, vocational training, healthcare, culture, sports, and environment to encourage socialization.

Pending amendments and supplements to the detailed list of types, scale criteria, and standards of socialized facilities, no back taxes on corporate income tax shall be pursued.

14. The Ministry of Finance shall cooperate with the Vietnam Social Security to implement measures to reduce the number of hours required for social insurance, health insurance, and unemployment insurance contributions by at least 50%.

II. TAX SOLUTIONS TO RESOLVE DIFFICULTIES, OBSTACLES, AND PROMOTE THE DEVELOPMENT OF ENTERPRISES WITHIN THE AUTHORITY OF THE NATIONAL ASSEMBLY:

1. An enterprise with an investment project shall enjoy income tax incentives in accordance with the provisions of the Law on Corporate Income Tax at the time of issuance of the investment permit or investment certificate. In case there are changes to the Law on Corporate Income Tax, the enterprise has the right to choose either to continue enjoying corporate income tax incentives at the rate currently applicable under the law at the time of issuance of the investment permit or to enjoy tax incentives under the newly amended and supplemented law for the remaining period if it meets the conditions for tax incentives stipulated in the newly amended and supplemented law from the date the amended and supplemented law takes effect.

2. The income of enterprises from implementing new production projects for products listed in the Priority Support List for Industrial Supporting Products shall be subject to a tax rate of 10% for 15 years, exempted from tax for 4 years, and granted a 50% reduction in the amount of tax payable for the next 9 years; in cases where enterprises expand production for products listed in this Priority Support List for Industrial Supporting Products and meet one of the three criteria for expansion investment as stipulated in the Law on Corporate Income Tax No. 32/2013/QH13, they may choose to enjoy tax incentives (both tax rates and exemption/reduction periods) according to the ongoing project for the remaining period (if any) or be exempted from tax for 4 years and granted a 50% reduction in the amount of tax payable for the next 9 years for additional income generated from expanded investment.

The Government shall specify the Priority Support List for Industrial Supporting Products.

3. Enterprises in Vietnam investing abroad shall be exempted from, or have their taxes reduced or not collected on the portion of income repatriated to Vietnam. The Prime Minister shall decide on specific matters.

4. Investment projects with a minimum capital investment of VND 12,000 billion (twelve thousand billion dong), which are disbursed within no more than 5 years from the date of issuance of the investment permit, shall be subject to a preferential tax rate of 10% for 15 years, exempted from tax for 4 years, and granted a 50% reduction in the amount of tax payable for the next 9 years for income derived from implementing investment projects in manufacturing (excluding projects producing goods subject to special consumption tax, and mining projects). In cases requiring special attraction of investment, the preferential tax rate of 10% may be extended but not exceeding 15 years.

5. A tax rate of 20% shall apply in 2014 and 2015 for enterprises operating in agriculture that regularly employ over 300 workers and undertake to purchase products harvested by workers who do not reside in areas with difficult socio-economic conditions or extremely difficult conditions. From January 1, 2016, the income of such enterprises shall be subject to a tax rate of 17%.

6. The limitation on advertising expenses specified in Point 2.m Clause 5 Article 1 of the Law on Corporate Income Tax No. 32/2013/QH13 shall only apply to advertising costs.

7. Personal income tax shall be exempted from the income from salaries and wages of Vietnamese seafarers employed by foreign shipping companies or Vietnamese international shipping companies.

8. Personal income tax shall be exempted from the income of ship owners from direct service provision activities supporting offshore fishing operations.

9. The personal income tax specified in Point c Clause 6 Article 3 of the Law on Personal Income Tax shall only apply to income from gambling winnings.

10. Goods purchased or imported to form fixed assets for socialized projects in education and training, vocational training, healthcare, culture, sports, and the environment shall be eligible for value-added tax (VAT) deduction or refund.

11. Ship owners engaged in marine product exploitation shall be entitled to VAT refund for ships used for marine product exploitation if the ships are newly built or upgraded with a total main engine power of 400 horsepower (HP) or more.

12. No resource tax shall be levied on natural water used for agriculture, forestry, fisheries, and salt production.

14. Enterprises shall determine revenue, expenses, taxable value, and tax payments to the state budget (except in cases of tax payment in foreign currency as prescribed by the Government) in Vietnamese dong; in cases where revenue, expenses, or taxable value arise in foreign currency or the taxpayer is required to pay in foreign currency but is permitted by the competent authority to pay in Vietnamese dong, the enterprise must convert the foreign currency into Vietnamese dong based on the actual transaction exchange rate at the time of occurrence.

15. Debts arising from late payment penalties for taxes incurred before July 1, 2013, of enterprises facing objective difficulties and having paid the principal tax debt before December 31, 2014, shall be waived. The authority to waive tax debts shall be carried out in accordance with Clause 22 Article 1 of the Law Amending and Supplementing Certain Provisions of the Law on Tax Administration. The Government shall specify the scope of enterprises facing objective difficulties eligible for waiver of late payment penalties for taxes.

16. Based on the actual situation and technological equipment conditions, the Government shall specify the detailed implementation of taxpayers not being required to submit documents in tax declaration and payment files, tax refund files, tax refund... that the tax authorities and customs already have.

III. IMPLEMENTATION:

1. The Ministry of Finance shall take the lead and coordinate with the Ministry of Justice, the Office of the Government, and relevant ministries and agencies:

a) To submit to the Government for promulgation of Decrees amending and supplementing Decrees No. 65/2013/NĐ-CP dated June 27, 2013, No. 83/2013/NĐ-CP dated July 22, 2013, No. 209/2013/NĐ-CP dated December 18, 2013, and No. 218/2013/NĐ-CP dated December 26, 2013, and to submit to the Prime Minister for issuance of other related legal documents to implement the measures set forth in Item I of this Resolution in the third quarter of 2014 according to simplified procedures.

b) To finalize the draft Resolution of the National Assembly regarding the measures set forth in Item II of this Resolution. The Minister of Finance, acting on behalf of the Prime Minister, shall present the draft Resolution to the National Assembly, Session 8, Term XIII, for consideration and decision.

c) To intensify information dissemination and promotion of tax measures to resolve difficulties and promote business development as outlined in this Resolution so that the public and businesses are aware and can monitor the implementation.

2. The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial People's Committees under the central city administrations shall concentrate on directing, guiding, organizing the implementation, and coordinating the implementation of the measures set forth in this Resolution to promptly address difficulties for production and business activities, and support the market. Strengthen inspection and supervision of the implementation process of tasks by agencies, organizations, and individuals; timely and strictly reward or discipline the performance of assigned tasks. Closely monitor actual conditions, proactively follow up and evaluate to take flexible and prompt measures, or propose effective guidance and management measures to competent authorities. /