The Tax Department (Ministry of Finance) has just sent an official dispatch to the Tax Departments of provinces and cities to guide the implementation of tax exemption, reduction and extension of payment, land rent for businesses, households and individuals affected by storms No. 10, 11 and floods after the storm.
According to the Tax Department, based on the Law on Tax Administration, the Law on Value Added Tax and related documents, taxpayers who suffer material damage due to force majeure natural disasters will be considered for exemption, reduction or extension of many taxes.
Enterprises that suffered material damage directly affecting production and business are entitled to a special consumption tax reduction, with a reduction of no more than 30% of the tax payable in the year of damage, and at the same time not exceeding the value of damaged assets after deducting compensation (if any).
In case of loss of resources due to natural disasters, fires, or unexpected accidents, enterprises are exempted from or have their resource tax reduced. If resource tax has been paid, the amount will be refunded or deducted in the following period.
Enterprises with damage to land and houses on land exceeding 50% of the taxable price are exempt from all non-agricultural land use tax; in case of damage from 20% to less than 50%, 50% tax will be reduced.
Regarding land rent, enterprises operating for more than 3 years, leasing land with annual payments for agricultural, forestry, aquaculture or salt production will be exempted from land rent if the damage level is 40% or more; the damage under 40% is reduced accordingly.
In case of having to temporarily suspend operations to overcome the consequences of natural disasters, the enterprise will receive a 50% reduction in land rent during the temporary suspension of production and business.
In addition to the exemption and reduction policy, enterprises affected by storms and floods will also have part or all of the taxes payable for an extension of a maximum period of 2 years. The dossier requesting tax exemption, reduction, and extension of payment and land rent shall be submitted directly to the tax authority.
According to the instructions of the Tax Department, households and individuals affected by natural disasters are entitled to reduced taxes including personal income tax, special consumption tax and resource tax.
The personal income tax reduction corresponds to the level of damage but does not exceed the tax payable. For special consumption tax, the maximum reduction is 30% in the year of damage and does not exceed the value of damaged assets after deducting compensation (if any). Natural resource tax is reduced corresponding to the volume of lost resources; if paid, it will be refunded or deducted in the following period.
Business households and individuals submit tax reduction requests to the tax authority directly managing them. Within 30 days (or up to 40 days if the inspection is necessary), the tax authority will issue a decision to exempt, reduce or notify the reason for not being qualified.
The Tax Department also said that households and individuals affected by natural disasters are allowed to pay value added tax and personal income tax until December 31. In case of severe damage, the extension period can be up to 2 years from the date of tax payment expiration. During the extension period, taxpayers are not fined and do not have to pay late fees for the remaining tax payable.
According to quick information from the provinces, the Department of Dyke Management and Natural Disaster Prevention (Ministry of Agriculture and Environment) said that as of 7:00 a.m. on October 11, heavy rain and floods after storm No. 11 had caused damage of VND 7,050 billion.
