Extending Deadlines for Payment of VAT, CIT and Land Rental
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Publishing date:
April 24, 2020

On 8 April, the Government issued Decree No. 41/2020/NĐ-CP to extend the deadline for payment of Corporate Income Tax (“CIT”), Value Added Tax (“VAT”), Personal Income Tax and land rental for eligible enterprises and entrepreneurs. This is the most recent financial measure to help businesses grapple with the economic impact of the Covid-19 pandemic. The briefing provides a summary of the key stipulations.

1. Applicability

The Decree is applicable to companies which have generated revenues from the following business activities in 2019 or 2020:

(i) Manufacturing sector

• Agriculture, forestry and fishery;

• Food production and processing; weaving; garment manufacturing; leather and related products manufacturing; wood processing and manufacturing products from wood and various species of bamboo (except beds, wardrobes, tables, chairs); manufacturing products from straw and plaiting materials; manufacturing paper and paper-related products; manufacturing products from rubber and plastic; manufacturing products from other non-metallic minerals; metal production; mechanical processing; metal treatment and coating; manufacturing electronic products, computers and optical products; manufacturing automobiles and other motor vehicles; beds, wardrobes, tables, chairs manufacturing;

• Construction; and

• Manufacturing prioritized ancillary industry products or key mechanical engineering products as statutorily defined.

(ii) Service sector

• Transportation and warehousing; accommodation and catering; education and training; health and social assistance activities; real estate business;

• Labor and employment service activities; activities of travel agents, tour operators and support services related to advertising and organizing tours; and

• Composing, artistic, entertainment activities; activities of libraries, archives, museums and other cultural activities; sports and entertainment activities; cinemas.

The Decree is also applicable to small and micro enterprises as defined and the banking sector in certain circumstances.

2. Deferment for eligible enterprises

(i) Deferment of VAT payments

A period of 5-month extension is granted to eligible taxpayers. Depending on the company’s VAT declaration method, the specific extended payment deadlines are as follows:

The payment extension will also be applied to branches or affiliated business units of eligible taxpayers, except branches or affiliated business units which do not engage in business activities entitled to tax payment deferral.


• This extension does not apply to import VAT.

• Eligible taxpayers shall still file and lodge their monthly or quarterly VAT declarations in accordance with current regulations, but will not have to pay the amount due under their VAT declaration until the extended deadline.

(ii) Deferment of CIT payments

The deadline for settling CIT obligations for 2019 and provisional CIT of Quarters I and II of 2020 shall be extended by 05 months from the statutory deadline. If the enterprise already finalized the CIT obligation of 2019, it will be allowed to credit this CIT adjustment amount by offsetting against other taxes payable in 2020.

The payment extension will also be applied to branches or affiliated business units of eligible taxpayers, except branches or affiliated business units which do not engage in business activities entitled to tax payment deferral.

(iii) Land rental

Eligible companies will be granted a 5-month payment extension (from 31 May 2020) for the first payment of 2020 provided that the companies directly lease land from the State and pay lend rental on an annual basis.

3. Administrative Procedures

The abovementioned payment concessions are not automatically applied but subject to submission of a deferment request by eligible enterprises. The Request for deadline extension for payment of taxes and land rent (by electronic or other means) shall be made on the standard form enclosed with the Decree and sent to the enterprise’s direct managing tax office. Such Request shall be submitted together with the monthly or quarterly tax declaration; otherwise, the deadline for submission of the Request is 30 July 2020. Failure to meet the deadline will result in forfeiture of the abovementioned benefits.

This briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For legal advice, please contact our Partners.
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