Nghị định 91/2014/ND-CP

DECREE

ON AMENDMENTS TO DECREES ON TAXES

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

Pursuant to the Law on Tax administration dated November 29, 2006; the Law on the amendments to the Law on Tax administration dated November 20, 2012;

Pursuant to the Law on Tax administration dated November 29, 2006; the Law on the amendments to the Law on Tax administration dated November 20, 2012;

Pursuant to the Law on Value-added tax dated June 3, 2008; Law on amendments to the Law on Value-added tax dated June 19, 2013;

Pursuant to the Law on Corporate income tax dated June 3, 2008; Law on amendments to the Law on Corporate income tax dated June 19, 2013;

At the request of the Minister of Finance,

The Government issues the Decree on amendments to Decrees on taxes.

Article 1. Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government providing guidance on the implementation of the Law on Corporate income tax shall be amended as follows:

1.  Point m Clause 2 of Article 3 shall be amended as follows:

“m) Differences from revaluation of assets as prescribed to contribute capital or transfer upon division, splitting, merger, consolidation or conversion, except for equitization or restructuring of the corporates whose charter capital is wholly held by the state.  

Corporates receiving the assets shall be accounted for according to the re-evaluated price when determining the deductible expenses prescribed in Article 9 of this Decree.”

2. Clause 3 of Article 4 shall be amended as follows:

“3. The income derived from the execution of the contract for scientific research and technological development shall be eligible for tax exemption until expiration of that contract  but not more than 3 years from the day on which the revenue is earned; the income derived from the sale of products that are results of new technologies applied in Vietnam for the first time shall be eligible for tax exemption provided that it does not exceed 5 years from the day on which the revenue derived from sale of such products; the income derived from the sale of experimental products during the experimental production period shall be applied to relevant laws.”  

3. Clause 9 of Article 4 shall be amended as follows:

“9. Income of the Vietnam Development Bank derived from credit extension serving investment in development, or credit extension serving export assigned by the State; income of Bank for Social Policies derived from credit extension to the poor and other subjects enjoyed preferential treatment policy; income of Vietnam Asset Management Company; income of government grants derived from profitable operations assigned by the State : Vietnam social insurance fund, Deposit insurance corporation, Health insurance fund, Apprenticeship enhancement fund, Overseas employment support fund of the Ministry of Labor, Famer support fund, Vietnam legal aid fund, Public-utility telecommunications fund, Local development investment fund, Vietnam environmental protection fund, Credit guarantee fund for small and medium-sized corporates, Cooperative development aid fund, Poor women support fund, Fund for Protection of citizens and legal entities abroad, Housing development fund, Fund for small and medium-sized corporate development, Fund for National scientific and technological development, National technological innovation fund; incomes of non-profit Fund for Land development and other funds of the State prescribed or established and operated by the Government or Prime Minister are deriving from operations assigned by the State.”

4. Point a Clause 1 of Article 9 shall be amended as follows:

“a) The actual expenditures incurred in relation to the business operations of corporates, including the following expenditures:

- Expenditures on performance of duties pertaining to security and defence education, training, activities of militia forces and other defence and security duties as prescribed; the expenditures on operation of Communist Party organizations and social-political organizations in corporates.

- The actual expenditures on HIV / AIDS prevention at workplace, including: expenditure on provision of training in HIV / AIDS prevention for employees, expenditure on raising employees’ awareness of HIV / AIDS prevention , fees for HIV consultation, examination and testing, and expenditures on supporting employees who are HIV sufferers;

- The direct expenditures on the employees’ welfare with legitimate invoices and documents such as: expenditures on employees' family occasions ; expenditures on holiday allowance or treatment support; expenditures on professional training ; expenditures on supporting employees’ families affected by natural disasters, hostilities, accidents, illness; expenditures on providing reward for employees’ children due to their educational achievements; expenditures on allowances for traveling during holidays of the employees and other welfare expenditures prescribed in guidance of the Ministry of Finance; the total expenditure incurred in the tax year must not exceed actual average 1 month’s salary.”

5. Point d Clause 2 of Article 9 shall be amended as follows:

“d) The depreciation of fixed assets that does not comply with regulations of the Ministry of Finance, including: depreciation for cars with fewer than 9 seats (except for cars used for passenger transport, tourism, or hotel operation; cars used for display and test drive by car dealers) in proportion to the portion of cost in excess of 1.6 billion dong per car; depreciation of civil aircraft or yachts not used for transport of passengers or goods, tourism, or hotel operation.”

6. Clause 3 of Article 16 shall be amended as follows:

“3. The incomes from performing new investment projects prescribed in Clause 3, Article 15 of this Decree and income of the business from performing new investment projects in industrial parks (except for industrial parks located in socially and economically advantaged areas) shall be eligible for tax exemption for 2 years and 50% tax reduction for the next 4 years.

The socially and economically advantaged areas prescribed in this Clause are urban districts of special class cities or the first class cities affiliated to the Central and the first class cities affiliated to provinces, not including urban districts of the aforesaid cities converted from districts from January 1, 2009; where the industrial parks are located in both advantaged and disadvantaged areas, the determination of tax incentive for industrial parks based on actual location of the investment project. The determination of special class cities prescribed in this Clause shall comply with regulations of the Government on classification of cities.”

7. Clause 5a is added to Article 19 as follows:

“5a. With regard to a licensed investment project, if the investment capital, stage, and rate of progress are registered in the initial investment dossier sent to investment licensing agency provided that the subprojects conducted on schedule, the subprojects shall be treated as a subproject of the firs investment project granted the first license (except for objective difficulties or force majeure events). As a result, such subprojects shall be eligible for the same tax incentives as that provided for the initial investment project; if the investment project is issued the investment license before January 1, 2014, such subprojects shall be eligible for tax incentives for the rest of incentive period from January 1, 2014.

If an investment project is provided with tax incentives and new investments in machinery and equipment are regularly made during the period 2009 - 2013, the additional income arising from such investments shall be eligible for the same tax incentives for the remaining period.”

8. Clause 5b is added to Article 19 as follows:

“5b.  If the period of tax incentives is still unexpired due to the export ratio but the business is no longer eligible for tax incentives for textile and garment products from January 11, 2007 and other products from January 01, 2012 because of commitments to WTO, it may decide whether to apply preferential tax rates and tax exemption period successively or concurrently for the rest time to textile and garment products from 2007 and  to other products from 2012 depending on the business’ fulfillment of requirements (apart from export ratio and use of domestic raw materials) in accordance with the legislative documents on corporate income tax which is effective from the day on which the business is issued with the establishment license to the effective date of the Decree No. 24/2007/ND-CP dated February 14, 2007 of the Government providing guidance on implementation of Law on corporate income tax, or in accordance with regulations of legislative documents on corporate income tax at the time in which tax incentives are adjusted due to the commitments to WTO.”

9. Points 2, 3, 4, 5, 32, and 37 of the List of administrative divisions entitled to corporate income tax incentives in the Appendix enclosed with the Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government as follows:

Article 2. Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government providing guidance on the implementation of the Law on Value-added tax shall be amended as follows:

1. Point a Clause 2 of Article 3 shall be amended as follows:

“a) Credit extension services including:

- Grant loans;

- Discount or rediscount negotiable instruments and other valuable papers;

- Issue guarantee;

- Grant finance lease;

- Issue credit card;

- Carry out domestic or international factoring;

- Sell collateral for loan, including the cases in which borrowers sell the collateral themselves by delegation of lenders to repay the secured loans.  

- Provide credit information as prescribed in the regulations of Law on the State bank;

- Other methods of credit extension as prescribed.”

2. Point b Clause 2 of Article 9 shall be amended as follows:

“b) There are documents on non-cash payment for purchases, except the case in which total value of the purchases is under VND 20 million.

With regard to purchases which are VND 20 million or over and paid under a deferral plan or installment plan, taxpayers shall declare and deduct the input VAT according to sale contracts, VAT invoices and non-cash payment documents.  If there is no proof of non-cash payment because the payment of contract is not due, taxpayers may still declare and deduct the input value-added tax.

The payments made by offsetting the value of purchases against value of sales are also considered non-cash payments.”

3. Point c Clause 1 of Article 9 shall be amended as follows:

“c) The input VAT on fixed assets, machinery, and equipment, including the input VAT on the lease of these assets, machinery, and equipment shall be not deducted and shall be included in costs of fixed assets or the deductible expense prescribed in Law on corporate income tax and other documents providing guidance on implementation in the following cases: specialized fixed assets used for the manufacture of weapons and military equipment for security and defense; fixed assets, machinery, equipment of credit institutions, reinsurers and life insurers, securities companies, medical facilities, training institutions; civil aircraft and yachts not used for commercial cargo transport, passenger transport, tourism, or hotel operation.

With regard to fixed assets being cars with fewer than 9 seats (except for cars used for cargo transport, passenger transport, tourism, or hotel operation; cars used for display and test drive by car dealers) whose value are over VND 1.6 billion, the input VAT amount in proportion to the amount in excess of VND 1.6 billion shall not be deducted.”

Article 3. Decree No. 65/2013/ND-CP dated June 27, 2013 of the Government provide guidance on the Law on Tax administration and the Law on the amendments to the Law on Tax administration shall be amended as follows:

1. Point dd Clause 2 of Article 3 shall be amended as follows:

“dd) Other monetary or non-monetary benefits other than salaries and wages paid by employers and taxpayers are beneficiaries in any shape or form:

- House rents, charges for electricity, water and associated services (if any), not including benefit from houses supplied by the employers to workers working in the industrial zones, economic zones or in disadvantaged or severely disadvantaged areas.

- Accumulated life insurance premium and other non-compulsory insurance premium, accumulated amount of contribution to the voluntary retirement fund, which are paid by the employers for their employees. Before paying the insurance or pension to an individual, the insurer or the company managing the voluntary retirement fund must withhold 10% of the accumulated premium or contribution , which is paid by the employer, as tax from July 01, 2013;

- Membership fees and charges for other services provided for individuals on request, such as:  Healthcare, entertainment, sports, recreation, beauty care;

- Other benefits as prescribed by law.”

2. Point b Clause 5 of Article 30 shall be amended as follows:

“b) Individuals and business households that have paid their taxes as prescribed in clause 1 Article 10 of this Decree.”

3. Point e Clause 5 is added to Article 30 as follows:

“e) Individuals are insurance agents, lottery agents, or multi-level marketing agents whose personal income tax has been withheld by the income payer.”

Article 4. Decree No. 83/2013/ND-CP dated July 22, 2013 of the Government provide guidance on the Law on Tax administration and the Law on the amendments to the Law on Tax administration shall be amended as follows:

1. Clause 5 of Article 5 shall be amended as follows:

“5. If the taxpayer suspends the business operation and sends a written request to the business registration authority where taxpayer registered, the taxpayer is not required to submit tax declarations during the suspension period.  If the taxpayer carries on the business after the suspension period and a written notification is sent to business registration authority where the tax payer registered, they shall submit tax declarations as prescribed. The business registration authority where businesses or business households registered must notify the tax authority of the information about the businesses or business households that suspended or resumed the business.”

2. Clause 3a is added to Article 7 as follows:

“3a. The Ministry of Finance must consider providing incentives to businesses that have been operating for less than 2 years and have large investment scale, national major projects, and/or privileged investment projects approved by the Prime Minister before granting the investment license. The Ministry of Finance shall give the status of privileged business and provide the incentives as prescribed in Clause 2 of this Article when the businesses build the infrastructure of the project.”

3. Point b Clause 1 of Article 11 shall be amended as follows:

“b) Declarations shall be made quarterly by the taxpayers whose revenue in the previous year is 50 billion VND or lower.”

4. Clause 1 of Article 12 shall be amended as follows:

“1. Declarations of corporate income tax are annual terminal tax declarations or terminal tax declarations up to time that the corporate undergoes division, splitting, consolidation, merger, conversion (not including the cases in which the receivers inheriting all tax obligation from corporate before conversion), dissolution, or shutdown; except ad hoc declarations of corporate income tax on real estate transfer and other operations defined by legislation on corporate income tax.

The tax authority must inspect the final tax declarations of business within 15 working days from the day on which the materials or dossiers relating to the finalization of tax liability are received from the taxpayer in cases of division, splitting, consolidation, merger, conversion, dissolution, or shutdown. The Ministry of Finance shall instruct tax authorities to hire independent audit companies, tax agents to inspect terminal tax declarations of dissolved or shut down businesses.”

5. Clause 2 of Article 12 shall be amended as follows:

“2. Corporate income tax declaration:

a) The declaration of corporate income tax settlement consists of:

- The declaration form of corporate income tax settlement;

- The annual financial statement or financial statement made up to the time the corporate undergoes division, splitting, consolidation, merger, conversion, dissolution, or shutdown;

b) The declaration of corporate income tax arising from real estate transfer shall be the form of declaration of the corporate income tax on real estate transfer;

c) The ad hoc declaration of corporate income tax shall be the form of declaration of corporate income tax.”

6. Clause 1a is added to Article 26 as follows:

“1a. According to the business result, the taxpayer make the provisional payment of corporate income tax in the quarter within 30 days of quarter succeeding the quarter in which tax is incurred.

Every business that makes financial statements quarterly shall determine the provisional amount of corporate income tax in each quarter according to quarterly financial statements and regulations of law on taxation.

Every business that not required to make financial statements quarterly shall determine the provisional amount of corporate income tax in  each quarter according to the amount of corporate income tax of the previous year and estimated business result in that year.

If the total of four provisional tax payments is smaller than the amount payable according to the financial statement by 20% or more, the taxpayer shall incur an interest on the amount that exceeds the 20% difference.”

7. Clause 3 of Article 31 shall be amended as follows:

“3. Duration of tax deferral:

a) In the cases in Point a and c Clause 1 of this Article, tax shall be deferred for not more than 02 years from the deadline for paying tax;

In the cases in Point c Clause 1 of this Article, tax shall be deferred for not more than the owning amount of the state budget.

b) In the cases in Points b and d Clause 1 of this Article, tax shall be deferred for not more than 01 year from the deadline for paying tax.”

Article 5. Effect and implementation

1. This Decree shall come into effect from November 15, 2014, except that Article 1 of this Decree shall be applied to the corporate income tax period of 2014.

2. The Ministry of Finance shall provide guidance on implementation of this Decree.

3. The Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, the Presidents of the People’s Committee of provinces and relevant entities shall take responsibility for the implementation of this Directive./.