The Vietnam Financial Director Club (VFCO) of the Vietnam Association of Business Administrators (VACD) has just sent to the Government proposed solutions to help businesses overcome difficulties caused by the Covid- 19.
Specifically, regarding tax policy, VCFO proposed to allow a minimum of 50% reduction of corporate income tax (CIT) for industries that are highly affected. At the same time, it is allowed to extend the payment of CIT for the third and fourth quarters of 2020 and the first quarter of 2021 as stipulated for the first quarter of 2020 in the Government’s Decree 41/2020.
According to VCFO, the pandemic is expected to have a great impact on business operations of enterprises in 2020 and in the first 6 months of 2021, businesses are likely to suffer losses during this period. Therefore, in addition to the current loss-transfer policy, the Government considers allowing the selected enterprise to apply:
The policy of reversing losses back to previous years, according to which the enterprise’s net losses in the year (eg 2020, 2021) will be offset against the taxable income of the previous years. Thus, the enterprise will be refunded the excess tax paid in the previous year.
Currently, some countries in the world have recently applied individually in the package of pandemic response solutions such as Singapore (3 years), Czech (2 years), Norway (2 years), Poland (1 year), USA (5 years).
Compared with the existing loss-transfer policy, the application of this policy will have the immediate and timely supportive effect of enterprises’ shortage of money.
In addition, the Government may and / or allow the extension of losses carried forward over the next 5 years for losses incurred during a pandemic. Currently, China allows to extend this loss period from 5 to 8 years.
Vietnam Finance Director Club also proposed amending and supplementing Decree 20 of 2017 on tax administration for associated transactions. The revised decree is expected to apply for finalization of 2019 CIT, but has not been issued so far.
For value added tax (VAT), in order to support businesses’ cash flows in the context of not earning revenue and not getting tax refunds, VCFO proposed a mechanism to allow enterprises to export for a limited period of time. Contract payments falling during the period affected by the pandemic will not be required to be accompanied by payment documents for goods and services in order to be refunded input VAT on exported goods and services. .
In fact, this policy is not new when during the economic crisis in 2008, the Government issued Decree 30 allowing temporary refund of 90% of the input VAT on goods actually exported in case the enterprise does not have payment voucher via bank and refund 10% upon receipt of payment document.
For personal income tax (PIT), VCFO requests for exemption or reduction of personal income tax to be paid for the whole year 2020 or at least the last 6 months of 2020 for income from salaries, wages and income. from business, capital investment, capital transfer, securities, trade, …
Not included in the income subject to PIT for allowances and supports for which the employees are in difficult circumstances, suspended from work, postponed the performance of labor contracts, and have no income received from the Government as well. as the employer. In addition, it is allowed to calculate and deduct personal income tax for personal contributions to support the Covid-19 epidemic.
VCFO cited that, in the past, in the face of the strong impacts of recessions on the economy and people’s lives, the Government made timely and wise decisions related to PIT in support of people. labor, stimulate the economy.
For example, in 2008, the National Assembly agreed to exempt all PIT from January 2009 to June 2009 and extended to subjects and continue to exempt PIT from July 1, 2009 to the end of 2009. for income from capital investment, capital transfer, copyright, franchise.
In 2012, when production encountered many difficulties, the National Assembly also agreed to exempt PIT from July 1, 2012 to the end of December 31, 2012 for individuals with taxable income from salaries and business. to the point of being subject to personal income tax at level 1 of the partially progressive tax schedule.
With tax declaration and final settlement in general, VCFO proposes to allow enterprises entitled to tax exemption, reduction and extension to automatically implement incentives and notify tax authorities at the same time. Tax authorities will conduct inspection / post-inspection, any wrong business will be responsible before the law. Avoid asking – giving situation, consider long due diligence.
In addition, the company / group of companies is allowed to choose the general tax finalization of the whole group or the tax finalization for each independent accounting unit as registered with the tax authority.
Regarding monetary policy, interest rate support programs are one of the optimal economic stimulus solutions with low costs, suitable to Vietnam’s conditions, and have a positive impact to help many businesses and households. production and business reduce borrowing costs, reduce product costs, maintain and expand production and business, create jobs, and contribute to ensuring social security