Strengthening propaganda and dialogue on tax exemption and reduction policies due to Covid

Continue to exempt and reduce taxes for businesses and business households

In 2021, due toaffected by Covid epidemic-19 Therefore, production and business in general and enterprises and business households in particular continue to face difficulties. Not only that, compared to 2021, the business situation of enterprises and small traders is even more difficult due to the deep impact of the epidemic on life, causing many trading activities to be interrupted, even stopped on a nationwide scale.

Therefore, compared to 2020, thetax exemption supporthave a wider audience. This is reflected in Resolution No. 406/NQ-UBTVQH dated October 19, 2021 of the National Assembly Standing Committee and Article 1 of Decree No. 92/2021/ND-CP dated October 27, 2021 of the Government on tax exemption and reduction.

Accordingly, the subjects eligible for exemption and reduction are not only enterprises established under the provisions of Vietnamese law but also cooperatives and other organizations established under the provisions of Vietnamese law with income-generating production and business activities. The above subjects are entitled to a 30% reduction in the corporate income tax payable in 2021 for taxpayers under the provisions of the Law on Corporate Income Tax with 2021 revenue not exceeding VND 200 billion and 2021 revenue is lower than 2019. The criterion of 2021 revenue being lower than 2019 revenue is not applied to taxpayers newly established, consolidated, merged, divided, or separated in the tax period of 2020 and 2021.

Due to the Covid-19 pandemic, the fleet of vehicles of a travel transport company cannot be rented by tours and must stay in place, losing both parking fees and regular maintenance costs. Photo: Nguyen Hai

In addition, the Resolution also clearly states that personal income tax, value added tax and other taxes payable arising from production and business activities in the months of the third and fourth quarters of 2021 are exempted for households and individuals with production and business activities in district-level localities affected by the Covid-19 epidemic in 2021 as decided by the Chairman of the Provincial People's Committee; there is no tax exemption for income and revenue from providing software products and services; digital information content products and services on entertainment, video games, music, digital movies, etc.

It's tourist season but Binh Minh Street, Cua Lo town is deserted, reflecting a difficult year for Nghe An tourism businesses. Photo: Nguyen Hai

Due to the impact of the Covid-19 pandemic on the transport, tourism and food sectors, the National Assembly has reduced value-added tax from November 1, 2021 to December 31, 2021 for goods and services such as railway, waterway, air and other road transport services; accommodation, food and beverage services, travel agencies, tour businesses and support services related to promoting and organizing tours; publishing products and services; cinema services, television program production, recording and music publishing; works of art and creative, artistic and entertainment services; library, archive, museum and other cultural activities services; sports, entertainment and recreation services. The above goods and services do not include publishing software and goods and services produced and traded online.

Mr. Ha Le Dung - Deputy Director of Nghe An Tax Department spoke at an online dialogue with businesses under Song Lam II Tax Branch. Photo: Nguyen Hai

To enjoy the tax exemption and reduction support policy in the spirit of Resolution 406, two conditions are required, in which the necessary condition is that the revenue in the 2021 tax period does not exceed 200 billion VND (priority is given to supporting small and medium-sized enterprises, business households, and cooperatives) and the sufficient condition is that the revenue in the 2021 tax period is lower than the revenue in the 2019 tax period, which was before the Covid-19 pandemic.

Mr. Ha Le Dung - Deputy Director of the Provincial Tax Department emphasized at the dialogue with enterprises and business households of Song Lam II Tax Branch

Online shopping and digital product trading are not exempt from tax. In the photo is an online delivery activity for customers in a residential area. Photo: Nguyen Hai

Actively dialogue to remove obstacles for businesses to easily access

Although the regulations of the National Assembly Standing Committee and the Government are quite clear, applying them in practice is not simple. At the meetingfirst online dialogue on tax exemptionsDue to Covid-19 at the Song Lam II Tax Branch in Hung Nguyen, Nam Dan area, there were dozens of opinions out of nearly 200 businesses and business households participating in the dialogue. The opinions focused on practical situations regarding goods export, invoicing, provisional revenue in 2021, which production and business sectors will be exempted or reduced from taxes...

Enterprises and business households have online dialogue with the provincial Tax Department from the Song Lam II Tax Branch bridge point in Hung Nguyen. Photo: Nguyen Hai

In response to the above questions, the representative of the Provincial Tax Department responded in the spirit of Resolution 406 and Decree 92/CP on tax exemption and reduction. That is, revenue generated during the period includes invoices, sales and delivery documents proving actual revenue generated in 2021; invoices and documents must be recorded validly and reasonably, and revenue invoices must not be manipulated or "avoided" to be transferred to the following year...

Besides questions about revenue, businesses and business households also have many questions wondering why some businesses are facing difficulties and impacts from Covid-19 but are not exempted from tax reduction.

Due to the Covid-19 pandemic, the company's revenue has decreased for 2 months. At first, I heard that there was a tax exemption so I applied for it but later I learned that the company was not supported. I was a bit sad but it's okay because many businesses are in more difficult situations.

A representative of a construction materials business on Phan Boi Chau Street, Vinh City shared

Vehicles waiting for customs clearance at Nam Can Border Gate, Ky Son. During the pandemic, the number of vehicles passing through the border gate has decreased significantly. Photo: Nguyen Hai

A representative of the provincial Tax Department said: the situation of Nghe An tourism and transport businesses has been clearly affected. The goal of the policy is to support small and medium-sized businesses that have been severely affected by Covid-19. On the contrary, some online shopping activities, business, repair of electronic equipment, telecommunications, software, etc. are still operating well and even profitable, so support is not possible.

Bac Vinh bus station is the main station of Vinh city and the province, normally every day there are 350 to 500 vehicles coming in and out, but since the epidemic broke out, the number has only been 150 vehicles and at peak times the station had to stop operating due to the epidemic. Photo: Nguyen Hai

At the dialogue, Mr. Ha Le Dung - Deputy Director of Nghe An Tax Department said: Currently, the industry is guiding the reception of dossiers and it is expected that there will be thousands of dossiers and the amount of tax exemption and reduction will be up to hundreds of billions of VND. The application of tax exemption and reduction for enterprises, business households, and cooperatives facing difficulties due to Covid-19 must be based on the Government's Decree 92/CP. From now until the end of the year, the Provincial Tax Department will direct the Tax Branches to strengthen online dialogue with enterprises and business households; at the same time, answer directly on the Tax Department's website forums so that the subjects can clearly understand and make access dossiers./.