DEFERRAL OF TAX AND PROVISION 2022

DECREE 34/2022 ON DEFERRED PAYMENT OF TAX AND LAND RENTS

 On 28 May 2022, the Government issued Decree 34/2022/ND-CP (“Decree 34/2022”) on deferral of value-added tax (VAT), corporate income tax, personal income tax, and land rents in 2022.

Decree 34/2022 comes into force from the signing date to the end of 31 December 2022.

We would like to summarize the notable contents as follows:

Entities eligible for deferral

► Enterprises affected by the Covid-19 epidemic, including 3 groups: manufacturing industries; group of business lines; micro and small enterprises.

► Details of the extended occupations are specified in Decree 34/2022.

 Taxes eligible for deferral 

 Value added tax (except VAT during import phase)

► Extend the tax payment deadline for 3 months for the VAT payable amount of VAT payable (including VAT allocated to provinces other than the province in which the taxpayer is headquartered, separately incurred VAT) of the tax period from March to August 2022 (for monthly VAT filings) and  Quarters I, II of 2022 (for quarterly VAT filings).

► The tax filing deadline remains unchanged.

► In case a branch or affiliated unit of an enterprise or organization mentioned does not operate in the business line eligible for tax deferral, it is not eligible for VAT payment deferral.

Corporate income tax

► Extending the tax payment deadline for 3 months from the deadline for payment of temporarily CIT paid for Quarter I, II of the 2022 tax year according to regulations of law on tax administration.

Deferral of land rents

► Deferral shall be granted to 50% of annual land rents payable in 2022 by enterprises, organizations, households, household businesses, and individuals specified that are directly leasing land from the State under Decisions or Contracts of competent authorities. Deferral period shall be 06 months from 31 May 2022 to 30 November 2022.

Note:

► In case an enterprise, organization, household, household business or individual has various business operations, the deferred tax payments shall be for the whole VAT or CIT amounts payable.

 

CIRCULAR 24/2022 AMENDING CIRCULAR 48/2019 ON PROVISIONS

The Ministry of Finance released Circular 24/2022/TT-BTC dated 7 April 2022 (“Circular 24/2022”) amending Circular 48/2019/TT-BTC, providing instructions about the creation and management of provisions for devaluation of inventories, loss of investments, bad debts and warranties for products, goods, services or construction works at enterprises.

Some highlights of Circular 24/2022 include:

► Amending and supplementing the provisions at Point a, Clause 1, Article 5 on the subject of making provision for loss of investments – Securities investments, accordingly the subject of making provision does not include Government bonds, bonds Government-guaranteed bonds, local government bonds.

► Amending and supplementing the provisions at Point b, Clause 1, Article 5 on the formula for the amount of provision for devaluation in the investment in securities, accordingly, the regulation on determining the amount of provision for devaluation of securities investment shall be eliminated for government bonds, local government bonds, and government-guaranteed bonds.

► The remaining balance of provisions for investments in Government bonds, Government-guaranteed bonds, and municipal bonds that enterprises made before the entry into force of this Circular (if any) shall be reversely recorded as deductions for expenses at the time of preparation of the year-end financial statement of 2022.

Circular 24/2022 shall enter into force as of  25 May 2022.

Accordingly, enterprises that have made provisions for Government bonds, Government-guaranteed bonds, etc. should pay attention to the changes in order to effectively comply with the revised regulations in Circular 24/2022.

 

GUIDELINES ON VAT REDUCTION UNDER DECREE 15/2022/ND-CP

 According to Official Letter No. 2688/BTC-TCT dated 23 March 2022 of the General Department of Taxation on VAT in Decree No. 15/2022/ND-CP:

► If the service is provided with the amount collected before 1 February 2022 at the tax rate of 10%, but the service is completed from 1 February 2022 to 31 December 2022, the amount had been invoiced before 1 February 2022 is not eligible for VAT reduction; however the VAT reduction is available for the remaining unpaid balance.

► If provision of goods and services is made in January 2022, but invoices are issued in February 2022, the provision of such is not eligible for VAT reduction and inovies are not issued timely.

► For invoices issued before 1 February 2022 at the VAT rate of 10%, after 1 February 2022, there are errors requiring adjustment of the invoices for amount of goods, return of goods or VAT, the adjustment invoices or those for returning goods apply the VAT rate of 10%.

► For providing specific goods and services such as electricity supply, business establishments are entitled to VAT reduction according to regulations for invoices issued from 1 February 2022 to 31 December 2022.

 

If you have any queries or require any further clarification, please do not hesitate to contact us.

To download the Taxflash in pdf format, please click this link below

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UHY Auditing and Consulting Co., Ltd

Thanh Nguyen – Partner

E: thanhnt@uhyvietnam.com.vn

Bo Tran – Director
E: bott@uhyvietnam.com.vn

Franklin Bak – Director
E: bakjw@uhyvietnam.com.vn

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