Circular No. 83/2012/TT-BTC guiding the implementation of exemption, reduction, and extension of certain State budget revenues according to Resolution No. 13/NQ-CP dated May 10, 2012 of the Government on some solutions to address difficulties in production and business, and support the market.

CIRCULAR

Guidelines for Implementing Exemptions, Reductions, and Extensions of Certain State Revenue Collections in Accordance with Resolution No. 13/NQ-CP dated May 10, 2012 of the Governmenton Certain Measures to Overcome Difficulties in Production and Business Operations,

Support Markets

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Pursuant to the Law on Value Added Tax No. 13/2008/QH12 dated June 3, 2008;

Pursuant to the Corporate Income Tax Law No. 14/2008/QH12 dated June 3, 2008;

Pursuant to the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006;

Pursuant to the State Budget Law number 01/2002/QH11 dated December 16, 2002;

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance,

The Ministry of Finance hereby provides guidelines for implementing Resolution No. 13/NQ-CP dated May 10, 2012 of the Government on certain measures to overcome difficulties in production and business operations, support markets as follows:

Article 1. Extension of Value-Added Tax Payment

1. Extending by six months the deadline for paying value-added tax (VAT) for April, May, and June 2012 (excluding VAT at the import stage) for enterprises currently paying VAT under the deduction method belonging to the following categories:

a) Small and medium-sized enterprises, including cooperatives (hereinafter referred to collectively as small and medium-sized enterprises), excluding small and medium-sized enterprises operating in the following sectors: lottery, securities, finance, banking, insurance, production of goods subject to special consumption tax, and enterprises ranked first or exceptionally distinguished within economic groups and state-owned corporations.

b) Enterprises in the manufacturing, processing, and processing industries: agricultural products, forestry products, aquatic products, textiles, footwear, electronic components; construction of socio-economic infrastructure projects employing many workers (hereinafter referred to collectively as labor-intensive enterprises).

2. Small and medium-sized enterprises as defined in Point a Clause 1 of this Article are enterprises meeting the criteria regarding capital or labor as stipulated in Clause 1 Article 3 of Decree No. 56/2009/NĐ-CP dated June 30, 2009 of the Government on assistance for the development of small and medium-sized enterprises.

a) The capital basis for determining small and medium-sized enterprises is the total capital reflected in the Balance Sheet prepared on December 31, 2011 of the enterprise. In cases where small and medium-sized enterprises were newly established from January 1, 2012, the capital basis for determining small and medium-sized enterprises is the registered capital recorded in the Business Registration Certificate or Investment Certificate issued for the first time.

b) The average annual number of employees serving as the basis for determining small and medium-sized enterprises (including the number of employees of branches and affiliated units) is the number of employees regularly employed on average in 2011, excluding short-term contract employees under three months.

The average annual number of regular employees is determined according to the guidelines set forth in Circular No. 40/2009/TT-BLDTBXH dated December 3, 2009 of the Ministry of Labor, Invalids, and Social Affairs guiding the calculation of the number of regular employees as prescribed in Decree No. 108/2006/NĐ-CP dated September 22, 2006 of the Government detailing and guiding the implementation of certain provisions of the Investment Law.

For newly established enterprises from January 1, 2012, the total number of employees, excluding short-term contract employees under three months, is calculated from the date of establishment to April 30, 2012 (if established before May 2012), to May 31, 2012 (if established before June 2012), to June 30, 2012 (if established before July 2012).

c) For enterprises engaged in multiple business activities, the determination of small and medium-sized enterprises based on the main business activity recorded in the business registration certificate of the enterprise serves as the basis for determining the capital or labor criteria as prescribed in Decree No. 56/2009/NĐ-CP. In cases where the main business activity cannot be determined, one of the following criteria shall be used to determine the main business activity of the enterprise:

- The largest number of employees working in each business activity of the enterprise in 2011.

- The highest revenue generated in each business activity of the enterprise in 2011.

If the above criteria still fail to determine the main business activity of the enterprise for the purpose of determining small and medium-sized enterprises, the criteria with the lowest capital or number of employees among the actual business activities conducted by the enterprise in 2011 as prescribed in Clause 1, Article 3 of Decree No. 56/2009/NĐ-CP shall be applied.

d) Not apply the six-month extension of the deadline for Value Added Tax (VAT) payment for the following entities:

d.1) Small and medium-sized enterprises operating in the following sectors: lottery, securities, finance, banking, insurance, production of goods subject to special consumption tax.

In cases where small and medium-sized enterprises operating in the sectors of lottery, securities, finance, banking, insurance, production of goods subject to special consumption tax also engage in other business activities subject to VAT, the amount of VAT payable for such other business activities shall be extended and determined as follows:

d. 2) Enterprises ranked first as prescribed in Joint Circular No. 23/2005/TTLT-BLDTBXH-BTC dated August 31, 2005 of the Ministry of Labor, Invalids, and Social Affairs and the Ministry of Finance guiding the ranking and salary levels for full-time members of the Board of Directors, General Managers, Directors, Deputy General Managers, Deputy Directors, and Chief Accountants of state-owned companies.

 d. 3) Enterprises classified as exceptionally distinguished as prescribed in Decision No. 185/TTg dated March 28, 1996 of the Prime Minister on exceptionally distinguished state-owned enterprises and Decision No. 186/TTg dated March 28, 1996 of the Prime Minister on the list of exceptionally distinguished state-owned enterprises.

d. 4) Economic organizations that are public service units.

3. Labor-intensive enterprises (including the number of employees of branches and affiliated units) in the sectors eligible for extension of VAT payment as provided in Point b Clause 1 of this Article include:

a) An enterprise that has an average of more than 300 employees regularly employed in 2011, excluding short-term contracts under three months for enterprises established before January 1, 2012.

For enterprises newly established on or after January 1, 2012, the total number of employees exceeding 300, excluding short-term contracts under three months, shall be calculated from the date of establishment to April 30, 2012 (if established before May 2012), to May 31, 2012 (if established before June 2012), to June 30, 2012 (if established before July 2012).

Production, processing, manufacturing activities: agricultural products, forestry products, aquatic products, textile, footwear, electronic components as specified in point b Clause 1 of this Article shall be determined based on the provisions of the System of Economic Sectors in Vietnam issued together with Decision No. 10/2007/QD-TTg dated January 23, 2007 of the Government.

Construction activities of economic and social infrastructure projects as specified in point b Clause 1 of this Article include construction, installation: waterworks, power plants, transmission and distribution facilities; water supply and drainage systems; roads, railways, airports, seaports, river ports, airfields, railway stations, bus terminals; construction of schools, hospitals, cultural centers, cinemas, artistic performance venues, sports training and competition facilities; wastewater treatment and solid waste disposal systems; telecommunications facilities, irrigation works serving agriculture, forestry, and fisheries.

b) In cases where enterprises employing many workers engage in production and business activities in sectors not eligible for extension, the amount of VAT subject to extension shall be determined as follows:

4. Branches and subordinate units of small and medium-sized enterprises, enterprises employing many workers located in different provinces from the main office (excluding units engaged in construction, installation, and out-of-province retail sales taxed at a provisional rate of 1%, 2%) shall file separate VAT returns with the direct tax authority managing such branches and subordinate units, which are also eligible for VAT payment extension.

In the case where branches and affiliated units of enterprises do not engage in production and business activities in eligible fields, they shall not be eligible for extended VAT payment.

The enterprise shall prepare a list of branches and subordinate units (including the name, address, taxpayer code, number of employees, and field of operation of each branch) and notify the list to the direct tax authority managing such branches and subordinate units. The enterprise shall bear legal responsibility for the accuracy of the list of branches and subordinate units submitted to the tax authority.

5. Enterprises eligible for VAT payment extension as guided in this Article shall file and submit the VAT return for April, May, and June 2012 according to regulations but shall not immediately pay the VAT due as shown on the filed return.

- The deadline for paying VAT for April 2012 is no later than November 20, 2012.
- The deadline for paying VAT for May 2012 is no later than December 20, 2012.
- The deadline for paying VAT for June 2012 is no later than January 21, 2013.

6. Enterprises shall self-determine their eligibility for VAT payment extension, the amount of VAT subject to extension, and declare these in Appendix 1 (issued together with this Circular) along with the VAT return for the month subject to extension.

If an enterprise has already filed the VAT return for April 2012 but has not prepared the aforementioned Appendix 1, it shall prepare and submit the additional Appendix 1 to the tax authority. During the period of VAT payment extension, the unit will not be subject to late payment penalties for taxes.

Article 2. Reduction of land rental fees

1. Reduce by 50% the land rental fees payable for the year 2012 for economic organizations and businesses operating in the fields of trade and services that are currently being leased land on an annual payment basis with rental rates applied according to the provisions of Government Decree No. 121/2010/NĐ-CP dated December 3, 2010. The reduction mechanism shall be implemented in accordance with Decision No. 2093/QĐ-TTg dated November 23, 2011 of The Prime Minister.

2. The conditions, procedures, formalities, and authority for reducing land rental fees shall be carried out in accordance with Circular No. 17969/BTC-QLCS dated December 30, 2011 of the Ministry of Finance and other documents of the Ministry of Finance guiding Decision No. 2093/QĐ-TTg dated November 23, 2011 of The Prime Minister.

Article 3. Extension of corporate income tax payment deadlines

1. Extend the deadline for paying corporate income tax by nine months for the corporate income tax payable for the years 2010 and earlier that have not been paid to the State Budget by enterprises as of May 10, 2012, including:

a) Small and medium-sized enterprises (including cooperatives), excluding small and medium-sized enterprises operating in the following sectors: lottery, securities, finance, banking, insurance, production of goods subject to special consumption tax, and small and medium-sized enterprises classified as level 1 or special level within Economic Groups and Corporations.

b) Enterprises engaged in manufacturing, processing, and processing of agricultural products, forestry products, aquatic products, textiles, footwear, electronic components; construction of socio-economic infrastructure projects employing many workers.

c) Enterprises producing mechanical equipment as means of production, inland waterway transport (including domestic inland waterway transport and sea transport), steel production, cement; Small and medium-sized enterprises in the real estate business.

No late payment penalties will be imposed from January 1, 2012 to September 30, 2012 for the corporate income tax that has not been paid to the State Budget by enterprises specified in this Clause. In cases where the tax authority has already notified the amount of late payment penalties, the tax authority must reissue the notification of late payment penalties.

On October 1, 2012, enterprises must pay the corporate income tax that has been extended according to the provisions of this Clause.

Before October 1, 2012, if enterprises are discovered by authorized inspection agencies to owe more corporate income tax during the extension period specified in this Clause than what they had declared or failed to declare, they will be granted an additional extension until September 30, 2012 for the increased tax amount and no late payment penalties will be imposed from January 1, 2012 to September 30, 2012.

From October 1, 2012, if enterprises are discovered by authorized inspection agencies to owe more corporate income tax during the extension period specified in this Clause than what they had declared or failed to declare, no late payment penalties will be imposed on the increased tax amount from January 1, 2012 to September 30, 2012.

2. Extend the deadline for paying corporate income tax by nine months for the corporate income tax payable for the year 2011 that has not been paid to the State Budget by enterprises producing mechanical equipment as means of production, inland waterway transport (including domestic inland waterway transport and sea transport), steel production, cement (excluding small and medium-sized enterprises operating in these sectors); Small and medium-sized enterprises in the real estate business.

No late payment penalties will be imposed from April 1, 2012 to December 31, 2012 for the corporate income tax that has not been paid to the State Budget by enterprises specified in this Clause. In cases where the tax authority has already notified the amount of late payment penalties, the tax authority must reissue the notification of late payment penalties.

On January 2, 2013, enterprises must pay the corporate income tax that has been extended according to the provisions of this Clause.

Before January 1, 2013, if enterprises are discovered by authorized inspection agencies to owe more corporate income tax during the extension period specified in this Clause than what they had declared or failed to declare, they will be granted an additional extension until December 31, 2012 for the increased tax amount and no late payment penalties will be imposed from April 1, 2012 to December 31, 2012.

From January 1, 2013, if enterprises are discovered by authorized inspection agencies to owe more corporate income tax during the extension period specified in this Clause than what they had declared or failed to declare, no late payment penalties will be imposed on the increased tax amount from April 1, 2012 to December 31, 2012.

3. Corporate income tax payable for the year 2011 by small and medium-sized enterprises (excluding small and medium-sized enterprises in the real estate business); Enterprises engaged in manufacturing, processing, and processing of agricultural products, forestry products, aquatic products, textiles, footwear, electronic components; construction of socio-economic infrastructure projects employing many workers shall be extended according to Decision No. 21/2011/QĐ-TTg, Decision No. 54/2011/QĐ-TTg, Decision No. 04/2012/QĐ-TTg of The Prime Minister.

4. Enterprises granted an extension of corporate income tax payment according to Clauses 1 and 2 above, which are currently under enforcement of administrative tax decisions due to arrears in corporate income tax, shall temporarily suspend such enforcement during the tax payment extension period.

5. Small and medium-sized enterprises operating in the sectors of lottery, securities, finance, banking, insurance, production of goods subject to special consumption tax (including those with other business activities); Enterprises classified as level 1 or special level within Economic Groups and Corporations; Economic organizations that are public service units are not eligible for an extension of corporate income tax payment.

Enterprises operating in the fields of production, processing, and manufacturing: agricultural products, forestry products, aquatic products, textiles, footwear, electronic components; construction of economic and social infrastructure projects employing many workers; enterprises producing mechanical products as means of production, inland waterway transport (including both inland waterway transport and marine transport), steel production, cement production, which engage in other business activities (excluding business activities subject to special consumption tax such as lottery, securities, finance, banking, insurance, goods production, and services) shall still be eligible for extension of payment of corporate income tax not yet paid to the state budget as provided herein.

6. Enterprises eligible for extension of payment of corporate income tax as stipulated herein are those established and operating under Vietnamese law; implementing accounting records, invoices, and vouchers in accordance with the law and paying taxes based on declarations.

7. Enterprises falling within the scope of extension as prescribed herein must prepare Appendix No. 2 (annexed hereto) and submit it to the directly managing tax authority, clearly identifying the cases where the enterprise is eligible for extension of payment of corporate income tax and the amount of corporate income tax eligible for extension of payment.

Article 4. Exemption from Business Registration Fee for Seafood Catching Households and Salt Production Households

Exemption from the Business Registration Fee in 2012 for seafood catching households. In cases where taxpayers who are entitled to exemption have already paid the Business Registration Fee in 2012, the State Budget shall refund the amount paid.

For salt-producing households, the exemption from the Business Registration Fee continues to apply as stipulated in Point 3 of Circular No. 42/2003/TT-BTC guiding amendments and supplements to Circular No. 96/2002/TT-BTC dated October 24, 2002, issued by the Ministry of Finance.

Based on the number of Business Registration Fees for 2012 approved, before June 10, 2012, the Tax Office shall establish a list and determine the amount exempted for seafood catching households eligible for exemption from the Business Registration Fee in 2012 managed by the Tax Office, report to the People's Committee at the district level; the Director of the Tax Office shall issue a Decision exempting the Business Registration Fee for 2012 along with a list of households exempted from the Business Registration Fee for 2012. The Tax Office shall establish a list of households to be refunded according to each commune, issue a Decision on refunding the fee, and coordinate with the Treasury at the same level to process refunds for overpaid fees through the People's Committee at the commune level before June 15, 2012.

Based on the list of exemptions and refunds of the Business Registration Fee decided by the tax authority, the People's Committee at the commune level shall notify the amount exempted to each taxpayer household and publicly post it in a convenient location for taxpayers to know. The People's Committee at the commune level is responsible for organizing the refund of the Business Registration Fee paid in 2012 to each household that has paid the fee before July 1, 2012.

Article 5. Extension of Payment of Land Use Fee

1. Applicability:

a) Economic organizations that are project investors obligated to pay the land use fee according to the Notice of the tax authority or the document of the competent authority but have not paid or have not fully paid by May 10, 2012, shall be granted an extension period of up to 12 months for payment of the land use fee from May 10, 2012, as decided by the People's Committee at the provincial level.

Economic organizations must continue to pay the land use fee and the late payment penalty from the date the extension period for payment of the land use fee expires as stipulated herein.

b) Economic organizations that are project investors obligated to pay the land use fee arising after May 10, 2012, until December 31, 2012, according to the Notice of the tax authority or the document of the competent authority shall be granted an extension period of up to 12 months for payment of the land use fee as decided by the People's Committee at the provincial level.

No late payment penalties shall be imposed during the extension period for payment of the land use fee as stipulated herein.

2. Based on the actual difficulties faced by investors and the impact of land use fee revenue on local infrastructure investment on local budget revenue, after obtaining the opinion of the Standing Committee of the People's Council at the same level, the People's Committee at the provincial level shall decide the specific extension period for payment of the land use fee for each project or group of projects where investors have not paid or have not fully paid the land use fee due, with the maximum extension period not exceeding 12 months.

3. The procedures, formalities, and authority for granting extensions for payment of the land use fee are as follows:

a) Economic organizations falling within the scope of Article 5 of Resolution No. 13/NQ-CP shall submit a written request reporting in detail their financial difficulties to the Department of Finance of the provinces and centrally-administered cities, accompanied by relevant documents (certified copies) including:

- Decision on land allocation for project implementation by the competent state agency.

- Decision approving the land price for land use fee collection or Decision approving the land use fee payable by the competent authority.

- Notice of land use fee payment and late payment penalty (if any) by the tax authority or the competent authority.

- Documentation (copies) explaining the company's financial difficulties (if any).

b) The Department of Finance of the provinces and centrally-administered cities, within ten days of receiving the application for extension of the land use fee payment deadline, shall cooperate with the Tax Bureau to review and propose a specific extension period to the People's Committee at the provincial level.

c) The People's Committee at the provincial level shall consider the proposal of the finance department and the tax bureau and report to the Standing Committee of the People's Council at the same level.

d) Based on the opinion of the Standing Committee of the People's Council at the same level, the People's Committee at the provincial level shall make a specific decision on the extension of payment of the land use fee.

đ) Based on the decision on the extension of payment of the land use fee by the People's Committee at the provincial level, the Tax Bureau shall organize its implementation.

Article 6. Effectiveness

This Circular takes effect from the date of signature.

Any guidance in previous documents that is inconsistent with the guidance in this Circular shall be implemented in accordance with the guidance in this Circular.

For VAT on imported equipment, machinery, specialized transportation vehicles within production lines, and construction materials that cannot be domestically produced and need to be imported to form fixed assets of enterprises, continue to implement according to the guidance provided in Circular No. 92/2010/TT-BTC dated June 17, 2010, issued by the Ministry of Finance.

Article 7. Responsibility for Implementation

1. The People's Committees of provinces and centrally governed cities shall direct relevant agencies to organize implementation strictly in accordance with the Government's regulations and the guidance of the Ministry of Finance.

2. Tax authorities at all levels shall be responsible for disseminating and guiding organizations and individuals to implement in accordance with the contents of this Circular.

3. Organizations and individuals subject to the provisions of this Circular shall implement in accordance with the guidance provided in this Circular.

During the implementation process, if there are difficulties, organizations and individuals are requested to promptly reflect to the Ministry of Finance for research and resolution./.