The coronavirus pandemic has impacted every person and every country in the world.
In Vietnam, there have been almost 1 million cases of the virus since the pandemic started. As a result, the government has put measures in place to help support businesses and individuals affected by the pandemic.
If you are a business or individual who has dealings with Vietnam, it is important to understand the tax rules and regulations of the country. Here is everything you need to know about Vietnam’s tax breaks in Resolution 406.
What is Resolution 406?
Resolution 406 is a resolution that has been designed to directly help SMEs and individuals recover after the coronavirus pandemic and was approved by the National Assembly Standing Committee.
It passed on the 19th of October and requires those eligible to complete a self-assessment to see what they can receive from the policy.
What is in the resolution?
Here are some of the main features of the resolution:
- A 30% reduction in the amount of corporate income tax payable in 2021 for certain businesses.
- A 30% reduction of the rate of value-added tax (VAT) from 1 November 2021 to 31 December 2021 for these businesses: Transportation services, catering and other services related to tourism, publication products, accommodation, cinemas and similar services, telecommunications, museums and sports and entertainment services. It excludes software services and online services. This reduction is designed to help businesses related to tourism and goods transportation recover after COVID-19.
- Business households may be exempt from income tax, VAT, and certain other taxes.
- Relief from late-payment interest.
Who is eligible?
Here are some of the businesses and individuals who are eligible to receive these tax relief measures:
- The corporate income tax only applies to businesses that had a revenue of VND 200 billion (around £6.45 million);
- The revenue for these businesses in 2021 must be less than what it was in 2019;
- The corporate tax cut is applied to every business that is involved in the production of goods or services;
- The corporate income tax reduction will apply to the total revenue of the business.
A welcome tax break
Businesses in Vietnam have welcomed these tax breaks, especially small and medium enterprises that have been particularly affected by the pandemic. Analysts of this tax have said that these breaks will have many beneficiaries. Moreover, lower taxes will translate into lower input costs and a reduction in production costs and supply chains.
Keep up to date with Vietnam tax law
If you have investments or business interests in Vietnam, keep up to date with the latest Vietnamese tax laws with the help of Seamless. We have helped hundreds of businesses expand their global footprint, and we can help your business, too.