GENERAL DEPARTMENT OF TAXATION GUIDES FOR TAX EXEMPTIONS, EXTENSIONS AND REDUCTIONS AFFECTED BY TYPHOON YAGI

GENERAL DEPARTMENT OF TAXATION GUIDES FOR TAX EXEMPTIONS, EXTENSIONS AND REDUCTIONS AFFECTED BY TYPHOON YAGI

The General Department of Taxation has just issued Official Dispatch No. 4062/TCT-CS guiding tax exemptions, reductions and extensions for organizations and individuals affected by Typhoon Yagi

Accordingly, the General Department of Taxation has sent the tax departments of the provinces of Quang Ninh, Hai Phong, Thai Binh, Nam Dinh, Hoa Binh, Lao Cai, Yen Bai, Son La, Lai Chau, Dien Bien, Ha Giang, Cao Bang, Bac Kan, Thai Nguyen, Tuyen Quang, Phu Tho, Vinh Phuc, Lang Son, Bac Giang, Bac Ninh, Hai Duong, Hanoi, Hung Yen, Ha Nam, Ninh Binh and Thanh Hoa.

1. For organizations

Taxpayers struggling due to these circumstances must prepare and submit documents to the direct tax authority according to regulations to may receive an extension in tax payables by 1-2 years (depending on each case of storm impact), exempt late tax payment penalties and fines related to administrative tax violations according to regulations.

Value-added tax on goods and services used in production and business will be fully deductible, including VAT on damaged taxable goods.

For corporate income tax, businesses incurring costs related to losses from natural disasters, epidemics, or accidents will have these costs considered deductible when determining taxable income. To be deductible, enterprises need documents such as minutes of inventory of the value of lost assets and goods; insurance compensation records (if any), records specifying responsibilities, organizations and individuals who must compensate (if any); records determining funding for overcoming the consequences of natural disasters; and welfare payments for employees affected by natural disasters.

Manufacturers facing special consumption tax difficulties due to natural disasters will be eligible for tax reductions based on actual losses, up to 30% of the tax due for the year of the damage, not exceeding the value of damaged assets after compensation (if any).

Taxpayers of resource taxes affected by natural disasters or accidents causing losses to declared and taxed resources may be granted tax exemptions or reductions. If taxes have already been paid, they will be refunded or offset against future resource tax liabilities. Enterprises are also entitled to a 50% reduction in non-agricultural land use tax if they suffer damage to land and houses.

2. For households and individuals doing business

For individuals and business households affected by natural disasters, personal income tax, special consumption tax and resource tax will be reduced. In which, the personal income tax rate will be reduced corresponding to the level of damage but not exceeding the amount of tax payable. Special consumption tax will be reduced corresponding to the damage but not exceeding 30% of the amount of tax payable. The resource tax rate will be reduced corresponding to the amount of lost resources; in case the tax has been paid, the tax paid will be refunded or deducted from the resource tax payable in the following period.

The document also clearly states that business households and individuals only need to submit a request for extension no later than September 30 to receive an extension for tax payment. The tax authority will not charge late payment penalty for the tax and land rent amounts that are extended during the extended payment period. For business households that suffer material damage that directly affects production and business due to natural disasters (floods), the tax payment deadline will be extended for no more than 02 years from the tax payment deadline. Taxpayers will not be fined and will not have to pay late payment penalty calculated on the tax debt during the extended tax payment period.

The General Department of Taxation requests local tax departments to guide individuals and business organizations to implement policies on tax extension, exemption and reduction. Local tax departments assign focal officers to guide taxpayers on records, procedures and restore tax records and related documents to determine the value of damage.

Download the content of Official Dispatch 4062/TCT-CS 4062/TCT-CS.pdf