On October 27th, the Government issued the Decree No. 92/2021/ND-CP, which is providing detailed regulations on implementation of the Resolution No. 406/NQ-UBTVQH15, regarding several measures to support enterprises and people affected by the Covid-19 pandemic.

According to the Decree, there are four groups of tax exemption and reduction solutions to support businesses and individual taxpayers to overcome difficulties caused by the impact of the Covid-19 pandemic, including:

  1. Reduction of Corporate Income Tax in 2021 for enterprises and organizations whose revenue are not exceeding VND200 billion that experienced a decrease in revenue in 2021 compared to 2019;
  2. Tax exemption (personal income tax, value-added tax and other taxes) in the third and fourth quarters of 2021 for business households and individuals with production and business activities in district-level areas that have been affected by the COVID-19 epidemic in 2021;
  3. Reduction of value-added tax for groups of goods and services in industries; and
  4. Exemption of late payment interest arising in 2020 and 2021 for enterprises and organizations that incurred losses in 2020.

By taking effect concurrently with the effective date of Resolution No. 406 on October 19, 2021, the Decree has specified beneficiaries of tax exemption and reduction.

In particular, the solutions as group (1) applied for Enterprise/Organization who are engaged in production and trading of goods and services with taxable income, including:

  • Enterprises founded in accordance with regulations;
  • Entities established under the Law on Cooperatives;
  • Public service units founded in accordance with regulations;
  • Other entities established under regulations when they run their business activities that generate income.

Accordingly, the 30% CIT reduction in 2021 will be applied for those who have (i) total revenue in 2021 not exceeding VND200 billions and (ii) the revenue in 2021 decreases compared to revenue in 2019.

The criteria (ii) is not applied for the newly set-up enterprises, consolidation, merger, division, separation in the tax period 2020 and 2021.

Meanwhile, the solution at group (3) as VAT reduction will be applied for the period from 1 Nov to 31 Dec 2021 for goods and service provision in the following business sector:

  • Transportation services; accommodation services; foods & beverages; travel agencies, tour operators and support services related to the tour promotion and organization; and
  • Publication; cinematographic services, TV program production; art work and relating services, libraries, museums and other cultural activities; sport and entertainment and relating services excluding publishing software and the online trading services;

(as described in a detailed list of Appendix I, Decree 92)

The tax reduction rate is noted as 30% VAT reduction for enterprise/organization who applies VAT deduction method and 30% reduction of rate for VAT computation for enterprise/organization who applies VAT direct method.

The guidance and procedure for implementation of the above have been detailed in the Decree for the taxpayer to further apply.