• The Government is making many adjustments to the economic development strategy, focusing on tax policies to support businesses in the face of many economic fluctuations

1. Extending the tax payment deadline in 2024
2. Continuing to reduce VAT by 2% until December 31, 2024
3. Increasing the basic salary and regional minimum wage
4. Regulations on Personal Income Tax for some additional fees for employees and when receiving dividends in shares

* Extending the tax payment deadline in 2024

– On June 17, 2024, the Government issued Decree 64/2024/ND-CP on extending the tax payment deadline and Decree 65/2024/ND-CP on extending the Special Consumption Tax payment deadline for domestically manufactured or assembled automobiles.

– Decree 64/2024/ND-CP and Decree 65/2024/ND-CP take effect from June 17, 2024 to December 31, 2024. – The subjects eligible for tax payment extension in 2024 are regulated similarly to Decree 12/2023/ND-CP on extension of payment of Corporate Income Tax (“CIT”), Value Added Tax (“VAT”), Personal Income Tax (“PIT”) and Decree 31/2023/ND-CP on extension of payment of Special Consumption Tax (“SCT”) for 2023.

– The specific tax payment extension period for 2024 is as follows:

1. CIT

• 3-month extension from the end of the tax payment deadline for CIT payable in the second quarter of the 2024 CIT calculation period.
• The CIT payment extension is also applied to branches and affiliated units of eligible taxpayers, except in cases where such branches and affiliated units do not have production and business activities in the industries and fields eligible for tax payment extension.

2. VAT, excluding import VAT

• The extension period for tax payment for the arising VAT payable (including the tax amount allocated to other provincial-level localities where the taxpayer has its head office, the tax amount payable for each occurrence) is stipulated as follows:

+ 5-month extension for the VAT payable for May 2024 and June 2024 (in case of monthly declaration); and the second quarter of 2024 (in case of quarterly declaration);

+ 4-month extension for the VAT payable for July 2024;

+ 3-month extension for the VAT payable for August 2024; and

+ 2-month extension for the VAT payable for September 2024 (in case of monthly declaration); and the third quarter of 2024 (in case of quarterly declaration);

• The extension of the VAT payment deadline is also applied to branches or affiliated units of taxpayers that declare VAT separately with the tax authority directly managing the branch or affiliated unit, except in cases where the branch or affiliated unit does not have production and business activities in the industry or field eligible for the tax payment extension.

3. VAT and personal income tax of business households and business individuals

• The VAT and personal income tax payment deadline is extended until December 31, 2024 for the tax amount payable in 2024 of business households and business individuals operating in the economic sectors and fields eligible for the extension.

4. Special Consumption Tax on domestically manufactured or assembled automobiles

• Extension of tax payment deadline for special consumption tax arising from the tax calculation period of May, June, July, August and September until November 20, 2024 from the end of the deadline for paying special consumption tax according to the provisions of the law on tax administration.
• The extension of the deadline for paying special consumption tax is also applied to branches or affiliated units of taxpayers that declare special consumption tax separately with the tax authority directly managing the branch or affiliated unit, except in cases where such branch or affiliated unit does not have automobile manufacturing or assembly activities.

5. Procedures for tax payment extension

• Taxpayers shall self-determine and submit tax payment extension applications according to the form directly to the tax authority in charge at one time for all applicable taxes and land rents at the same time as the declaration of the relevant tax and land rent as prescribed by the Law on Tax Administration or submit them separately no later than September 30, 2024 for corporate income tax, VAT, personal income tax and land rent and November 20, 2024 for special consumption tax.
• Tax authorities shall still extend tax payment in cases where tax payment extension applications are not submitted at the same time as tax declarations.
• During the period of tax payment extension, tax authorities shall not charge late payment fees for the extended tax and land rent amounts.

* Continue to reduce VAT by 2% until December 31, 2024

– On June 30, 2024, the Government issued Decree No. 72/2024/ND-CP stipulating the VAT reduction policy according to Resolution No. 142/2024/QH15 dated June 29, 2024 of the National Assembly, including the following noteworthy contents:

– Apply a tax rate of 8% to goods and services currently applying a tax rate of 10%, except for groups of goods and services specified in Appendix I, II, and III issued together, including:

• Telecommunications;
• Information technology;
• Financial, banking, securities, insurance, real estate business activities;
• Metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products;
• Goods and services subject to special consumption tax.

– Accordingly, the VAT reduction for each type of goods and services is applied uniformly at the stages of import, production, processing, and commercial business.

– Particularly for coal products sold (including coal mined and then screened and classified according to a closed process before being sold) are subject to VAT reduction.

Note:

• Coal products listed in Appendix I issued with this Decree, at stages other than the mining and selling stage, will not be subject to VAT reduction.
• Corporations and economic groups that implement a closed process for new sales are also subject to VAT reduction for coal products sold.
• In case the goods and services listed in Appendices I, II and III issued with this Decree are not subject to tax or subject to a tax rate of 5%, VAT will not be reduced.

– This VAT reduction policy has no change compared to the VAT reduction policy under Decree No. 94/2023/ND-CP for the first 6 months of 2024.

* Increase in basic salary and regional minimum wage

– Regulations on adjusting basic salary from July 1, 2024

On June 30, 2024, the Government issued Decree No. 73/2024/ND-CP regulating basic salary for cadres, civil servants, public employees and armed forces. Accordingly, from July 1, 2024, the basic salary will increase from VND 1,800,000/month to VND 2,340,000/month. The increase in the basic salary will increase the monthly salary for compulsory social insurance and health insurance, with the maximum contribution being 20 times the basic salary (from VND 36,000,000/month to VND 46,800,000/month). (Decree No. 73/2024/ND-CP dated June 30, 2024 issued by the Government)

– Regulations on adjusting regional minimum wages

• From July 1, 2024, the monthly and hourly regional minimum wages will increase as summarized in the table below.

• The increase in the regional minimum wage will increase the monthly salary for compulsory unemployment insurance, with the maximum contribution equal to 20 times the regional minimum wage (from VND 93,600,000/month to VND 99,200,000/month). (Decree No. 74/2024/ND-CP dated June 30, 2024 issued by the Government)

* Regulations on Personal Income Tax for certain additional fees for employees and when receiving dividends in shares

– Personal Income Tax when providing free or discounted parking passes to employees

• In case the company provides parking passes to employees (free or discounted), this expense is not included in taxable income for personal income if:

+ The company establishes a policy for this expense and specifically records the eligibility conditions and the eligibility level in one of the following documents: (i) Labor contract; (ii) Collective labor agreement; (iii) Financial regulations of the company, corporation, group; or (iv) Bonus regulations prescribed by the Chairman of the Board of Directors, General Director, Director according to the financial regulations of the company, corporation; and

+ This level of expenditure is consistent with the level of determining taxable income under the Law on Corporate Income Tax.

+ If the expenditure level is higher than the current level prescribed by the State, the excess expenditure must be included in taxable income.

(Official Letter No. 26443/CTHN-TTHT dated May 7, 2024 issued by the Hanoi Tax Department)

– Personal income tax on vacation expenses for employees

• Vacation expenses paid by the company to employees, if the expense clearly states the name of the individual receiving the benefit, this amount is included in the taxable income of the employee.
• General expenses for a group of employees without clearly stating the name of the individual receiving the benefit, this income is not included in the taxable income of the employee.

(Official Letter No. 1982/TCT-DNNCN dated May 10, 2024 issued by the General Department of Taxation)

– Personal income tax when receiving dividends in shares

• Shareholders who are individuals receiving dividends in shares are not required to declare and pay personal income tax from capital investment upon receipt.

– When transferring capital (dividends in shares), individuals must pay personal income tax on income from capital investment and income from securities transfer according to the provisions of Clause 1, Clause 2, Article 10; Point d, Clause 2, Article 11, Circular No. 111/2013/TT-BTC and Point b, Article 16, Circular No. 92/2015/TT-BTC.

(Official Letter No. 2044/CTBTR-TTHT dated July 5, 2024 issued by the Ben Tre Provincial Tax Department)

This document contains general information and is for reference purposes only. Within the scope of the content of this document, it does not provide services or provide professional advice to the reader. The information presented in this document does not apply to the specific circumstances of the business. Before making any decision or taking any action that may affect the financial situation or business operations, the reader should consult a professional advisor.