Vietnam: Proposals for tax relief measures in 2021 (COVID-19)

Exemption from individual (personal) income tax and from value added tax (VAT) in third and fourth quarter of 2021

Proposals contained in a draft resolution for tax relief

The Ministry of Finance has proposed tax relief measures for 2021, as support for businesses and individuals affected by the coronavirus (COVID-19) pandemic.

The proposals, contained in a draft resolution for tax relief, include the following measures:

  • Reduced corporate income tax payable by 30% in 2021 for taxpayers with total revenue in 2021 of not more than VND200 billion and total revenue in 2021 is lower compared to that in 2020 (the proposal would not apply for newly established taxpayers or for taxpayers converting their forms of enterprises or transforming their forms of ownership such as consolidation, merger, division, separation, dissolution or bankruptcy in the tax period 2021)
  • Exemption from individual (personal) income tax and from value added tax (VAT) in third and fourth quarter of 2021
  • Reduce VAT rate by 30% (for taxpayers adopting the deduction method) or by 30% of the deemed VAT percentage (for taxpayers adopting the deemed method) from 1 October 2021 through 31 December 2021 for business sectors such as transportation, accommodation services, catering services, etc.
  • Exemption from interest on the late payment of tax, of land use fees, and of land rent arising in 2020 and 2021 for enterprises with losses in 2020

Read a September 2021 report [PDF 185 KB] prepared by the KPMG member firm in Vietnam

Other topics or items briefly discussed in this KPMG report include:

  • Consulting fees paid to related parties are not deductible if explanation of the fee calculation basis is not provided and the fee calculation method is inconsistent among affiliated companies within the group
  • Repeal of Circular 179/2012/TT-BTC on recording, evaluating, and handling exchange-rate differences in enterprises
  • Decree 78/2021/ND-CP on the contribution to the disaster prevention fund
  • Conversion from a normal enterprise into an export-processing enterprise not eligible for VAT refund
  • Circular 43/2021/TT-BTC amending Circular 219/2013/TT-BTC on VAT for medical equipment
  • Circular 78/2021/TT-BTC implementing Decree 123/ND-CP on invoices and vouchers
  • New regulations on cross-border advertising services
  • Draft decree amending and supplementing regulations on management of multi-level marketing
  • Draft regulation on marketing authorization registration of tolled drugs and technology-transferred drugs in Vietnam

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.