Agree to exempt both types of taxes for bad debt settlement companies

The National Assembly's Finance and Budget Committee, in its report examining two draft laws amending and supplementing a number of articles of the Law on Corporate Income Tax and the Law on Value Added Tax, agreed to exempt both of these taxes for the Vietnam Asset Management Company (VAMC).

The Finance and Budget Committee believes that the Government needs to clarify the model, duration of operation, operational plan and expected results of VAMC.

The establishment of VAMC, a 100% state-owned organization established by the Government to handle bad debts of Vietnamese credit institutions, has not yet come true. Although at the press conference on the afternoon of April 26, Minister - Head of the Government Office Vu Duc Dam said that if nothing changes, "in a few days" the procedures to approve the decree to establish this company will be implemented.

The project to establish VAMC, approved in principle by the Politburo, has become one of the solid bases for the Government to submit to the National Assembly Standing Committee in mid-April 2013 to allow "collateral assets of debts purchased and sold by VAMC, established by the Government, to be subject to no value added tax".

However, uncertainty about the time of establishment as well as limited information about the company's model has caused the National Assembly's Finance and Budget Committee to disagree with the Government's proposal for tax incentives for VAMC.

Issuing regulations to regulate the activities of an organization that has not been established yet, and whose structure, functions, tasks, powers, fields, and forms of organization and operation are unclear, is unreasonable, said Chairman of the Finance and Budget Committee Phung Quoc Hien, expressing the views of many opinions in the Standing Committee of the Committee.

Mr. Hien also emphasized that tax incentives for VAMC should be considered in the Law amending and supplementing a number of articles of the Law on Value Added Tax, submitted to the National Assembly at the 5th session.

However, until the draft Law amending and supplementing a number of articles of the Law on Value Added Tax is considered by the Finance and Budget Committee at the plenary session on April 24, the establishment of VAMC is still in the future. Therefore, the proposal to provide VAT incentives for this company as stipulated in the draft law has not received the approval of the review agency.

Notably, at the same time, in the draft Law amending and supplementing a number of articles of the Law on Corporate Income Tax, the Government also proposed tax exemption for VAMC. Although the draft law submitted to the National Assembly Standing Committee for consideration at the mid-April meeting did not include this content.

On May 10, two reports on the draft law amending and supplementing a number of articles of the Law on Value Added Tax and the Law on Corporate Income Tax, both dated May 9, by the Finance and Budget Committee were sent to National Assembly deputies.

According to the review agency, the first draft law has added a provision: "Secured assets of debts sold by organizations in which the State owns 100% of the charter capital and established by the Government to handle bad debts of Vietnamese credit institutions are not subject to value added tax."

The majority of opinions in the Finance - Budget Committee agreed with the draft law and believed that, if the nature of the organization is not for profit and is aimed at restructuring credit institutions, handling bad debts of banks, and improving the credit market, then the regulation that the collateral of the debt sold by the above organization is not subject to value added tax is reasonable.

In the second draft law, the Government proposed that "income of 100% State-owned organizations established by the Government to handle bad debts of Vietnamese credit institutions is subject to tax exemption".

Also agreeing with this "reasonable" proposal, in the report examining the draft law, the Finance and Budget Committee said that, in order to have a basis for considering tax exemption, the Government needs to clarify the model, duration of operation, plan for organizing activities and expected results of VAMC.

Along with the Law amending and supplementing a number of articles of the Law on Value Added Tax, the Law amending and supplementing a number of articles of the Law on Corporate Income Tax will be submitted to the National Assembly for approval at the 5th session, opening on May 20. Currently, the complete documents of these two projects have been sent to the National Assembly deputies.

According to (vneconomy.vn/) - LT