RBK Update-December 2020

UPDATE NEW REGULATIONS

DECREE:

⦁    Decree No.126/2020/ND-CP detailing several articles of the Law on Tax Administration, issued October 9, 2020, takes effect from December 5, 2020.
⦁    Decree No.132/2020/ND-CP on tax administration for enterprises with associated transactions, issued on November 5, 2020, takes effect from December 20, 2020, and applies from the corporate income tax calculation 2020.
⦁    Decree No.125/2020/ND-CP regulating the sanctioning of administrative violations of tax and invoices, issued on October 19, 2020, takes effect from December 5, 2020.
⦁    Decree No.128/2020/ND-CP on sanctioning administrative violations in customs, issued on October 19, 2020, takes effect from December 10, 2020.
⦁    Decree No.135/2020/ND-CP regulating the retirement age of employees, issued on November 18, 2020, takes effect from January 1, 2021.
 

RESOLUTION:

⦁    Resolution No. 128/2020/QH14 On the State budget estimate in 2021, issued on 12/11/2020.


OFFICIAL LETTER:

⦁    Official Letter No. 4158/TCT-KK dated October 2, 2020, on the accounting of sub-item of payment of environmental protection tax (environmental protection) for petroleum products according to Circular No. 93/2019/TT-BTC dated December 31, 2019.
⦁    Official Letter 5189/TCT-CS summarizes Decree 126/2020/ND-CP's remarkable points on tax administration.
⦁    Official Letter 5032/TCT-CS dated 26/11/2020 of the General Department of Taxation on the cost of isolation against Covid 19 epidemic prevention by foreign experts.
⦁    Official Letter 97748/CT-TTHT dated 10/11/2020 of Hanoi Tax Department on CIT and PIT for payments to employees during the Covid-19 epidemic.

 


Newsletter December 2020

DECREE:

Decree No.126/2020/ND-CP detailing several articles of the Law on Tax Administration, issued October 9, 2020, takes effect from December 5, 2020.
⦁    Banks must provide customer account details at the tax authorities' request;
⦁    05 cases are not required to file a tax return.
⦁    Additional guidance on coercive measures to enforce administrative decisions on tax administration
⦁    It is not allowed to write off the debt of the land use levy, land rent, water surface rent, and money for protecting and developing rice land
⦁    The cases other than resident individuals with income from salaries and wages are not required to file PIT finalization
⦁    Detailed guidance on locations for filing a tax return for taxpayers who have many activities and businesses in many provinces
⦁    Specific provisions on tax declaration and payment on behalf of individuals receiving stock dividends
⦁    The CIT amount temporarily paid for three quarters is not lower than 75% of the whole year tax
⦁    For organizations cooperating with individuals, individuals do not directly declare tax
⦁    Specifying the regime of tax declaration and payment on behalf of individuals receiving stock dividends
 

Decree No.132/2020/ND-CP on tax administration for enterprises with associated transactions, issued on November 5, 2020, takes effect from December 20, 2020, and applies from the corporate income tax calculation 2020.
⦁    Decree No. 132/2020/ND-CP does not have a guiding circular like Decree No. 20/2017/ND-CP.
⦁    Inheritance Decree specified in Decree No. 68/2020/ND-CP dated June 24, 2020, amending and supplementing Clause 3, Article 8 of Decree No. 20/2017/ND-CP.
⦁    Expanding the excluded subject to apply regulations on deductible interest expense limit when determining the taxable income of corporate income tax.
⦁    Regulations on the submission of cross-border profits ensure taxpayers' convenience and Vietnam's commitment to participate in the OECD's BEPS forum, following Vietnam's context.
⦁    Transfer pricing management regulations have been revised in line with Law on Tax Administration No. 38.

Decree No.125/2020/ND-CP regulating the sanctioning of administrative violations of tax and invoices, issued on October 19, 2020, takes effect from December 5, 2020.
⦁    Changes in general provisions of the Decree: Scope of application, Subjects of administrative penalties for administrative violations of taxes, invoices; Additional penalty.
⦁    Adjusting the sanction level for tax administrative violations.
⦁    The sanctioning levels for several violations of tax procedures specified in Decree 125/2020 will be adjusted higher than before. The Decree also details the false declarations that lead to the lack of taxes, the specific fines for tax evasion, and aggravating and mitigating circumstances.
⦁    Specifically, the Decree stipulates: administrative violations with the tax amount of 100 million VND or more or the value of goods from 500 million VND or more are determined as large-scale administrative violations of taxes and violations. The administrative violation of 10 or more invoice numbers is defined as a large-scale administrative violation. The principle of determining the fine level when there is an aggravating or extenuating circumstance is calculated to increase or decrease by 10% of the fine bracket's average acceptable level.
⦁    Cases of committing many acts of administrative violations but not being sanctioned for each violation.
⦁    Cases of paying a fine of 1 time of tax evasion for taxpayers.
⦁    Transferring overdue e-invoice data can result in a fine of up to 20 million VND.

Decree No.128/2020/ND-CP on sanctioning administrative violations in customs, issued on October 19, 2020, takes effect from December 10, 2020.
⦁    Decree No. 128/2020 / ND-CP issued and replaced Decree No. 127/2013 / ND-CP dated October 15, 2013, on sanctioning of administrative violations and enforcement of administrative decisions. Major in the field of Customs and Decree No. 45/2016 / ND-CP dated May 26, 2016, amending and supplementing several articles of Decree No. 127/2013 / ND-CP.
⦁    According to the new Decree, there are only 4 cases that are not sanctioned for administrative violations in Customs. Compared with the provisions in Article 5 of Decree No. 127/2013 / ND-CP, amended and supplemented by Decree No. 45/2016 / ND-CP, this new regulation only retains 2 cases and has removed 05 the old case involves false declaration, false information, and the case of incorrect declaration, violation but low-value goods.
⦁    Besides, the sanction level for administrative violations in the customs field is also adjusted to increase and decrease according to the cases specified in this Decree.

Decree No.135/2020/ND-CP regulating the retirement age of employees, issued on November 18, 2020, takes effect from January 1, 2021.
Accordingly, from January 1, 2021, the employee's retirement age in normal working conditions is as follows:
⦁    Male employees are full 60 years of age and 03 months, then increase each year by 3 months until they reach the age of 62 by 2028.
⦁    Female employees are full 55 years of age, 04 months, and then increase each year 4 months until they reach full 60 years of age by 2035.
Besides, employees in the following cases may retire at a lower age but not over 05 years old than the above regulations at the time of retirement, unless otherwise provided by law:
⦁    Having full 15 years or more doing heavy, hazardous, dangerous or extremely heavy, hazardous or dangerous occupations or jobs on the list promulgated by the Ministry of Labor, War Invalids and Social Affairs.
⦁    Having worked 15 years or more in regions with extremely difficult socio-economic conditions, including the period of time working in areas with a regional allowance coefficient of 0.7 or more before January 1, 2021 (extremely difficult socio-economic regions).
⦁    The employee suffers a working capacity decrease of 61% or more.
⦁    Have a total working time of heavy, hazardous, dangerous, or extremely heavy, hazardous, or dangerous occupations or work, and have worked in a socio-economic area with extreme difficulty for 15 years or more.

 

RESOLUTION:

Resolution No. 128/2020/QH14 On the State budget estimate in 2021, issued on 12/11/2020.
⦁    Accordingly, in 2021, no adjustment to base salary is made.
⦁    Ministries, central and local agencies continue to implement current regulations on generating sources of wage reform, in which:
⦁    Excluding a number of revenues under the provisions of Clause 1, Article 3 of Resolution No. 86/2014 / QH14 when calculating the increase in local budget revenues made in 2020 and the 2021 estimate for salary reform;
⦁    Eliminate additional environmental protection fees on wastewater.
⦁    In addition, the National Assembly assigned the Government to guide the calculation of deductible expenses of enterprises, organize support expenses, documents for COVID-19 epidemic prevention, and control activities when determining the income subject to CIT.
 

OFFICIAL LETTER:

Official Letter No. 4158/TCT-KK dated October 2, 2020, on the accounting of sub-item of payment of environmental protection tax (environmental protection) for petroleum products according to Circular No. 93/2019/TT-BTC dated December 31, 2019.
⦁    For the payable amount, the payable amount arising from the tax book opening period of September 2020, the taxpayer declares and pays tax according to the subsections specified in Circular No. 93/2019 / TT-BTC, including sub-subsections. Items: 2022, 2023, 2024, 2025, and 2026 - Late payment interest shall be recorded in subsection 4939;
⦁    Taxpayers' remaining tax payable for tax obligations by the end of August 2020 shall continue to pay under the subsections specified in Circular No. 324/2016 / TT-BTC including the following sub- sections: 2001, 2002, 2003, 2004, 2009, 2041, 2042, 2043, 2044 and 2045 - Late payment interest will be recorded in subsections 4938 and 4939.
 

Official Letter 5189/TCT-CS summarizes Decree 126/2020/ND-CP's remarkable points on tax administration.
⦁    Tax administration with taxpayers during the suspension period.
⦁    Manage other revenues of the state budget
⦁    Regulations on tax registration
⦁    Regulations on the additional declaration of tax declaration dossiers
⦁    Regulations on VAT, corporate income tax, excise tax, royalties tax
⦁    Taxes on dividends or profits shared
⦁    Tax declaration with a number of activities such as lottery, electricity generation, petrol, property rental
⦁    Change in terms of tax declaration conditions by month, quarter, year, and each time it is incurred
 

Official Letter 5032/TCT-CS dated 26/11/2020 of the General Department of Taxation on the cost of isolation against Covid 19 epidemic prevention by foreign experts.
⦁    Regarding the determination of deductible expenses when determining taxable income for CIT:
⦁    For the cost of hotel isolation for foreign experts, if the enterprise signs a labor contract with the employee, including the house rent payment paid by the enterprise to the employee, the expense shall be paid. For the isolation establishment, it shall be included in deductible expenses when determining taxable income if there are sufficient invoices and vouchers and payment according to regulations.
⦁    With regard to the cost of purchasing business air tickets for foreign experts, if the expenses are specified under Point 2.9, Clause 2, Article 6 of Circular No. 78/2014 / TT-BTC dated June 18, 2014, of the Ministry of Finance (as amended and supplemented in Article 4 of Circular No. 96/2015 / TT-BTC dated June 22, 2015, of the Ministry of Finance) shall be included in deductible expenses when determining taxable income. Enter the business when there are full invoices and documents and make payment according to regulations.
⦁    The cost of Covid-19 testing for foreign experts is considered a welfare payment directly to the employee if such expenses comply with the provisions of Point 2.30, Clause 2, Article 6 of this Circular. Circular No. 78/2014 / TT-BTC dated June 18, 2014, of the Ministry of Finance (amended and supplemented in Article 4 of the Circular No. 96/2015 / TT-BTC dated June 22, 2015, of the Ministry of Finance) be included in deductible expenses when determining the taxable income of corporate income when there are sufficient invoices and documents and payment as prescribed.
⦁    Regarding the determination of income subject to PIT:
⦁    In case a foreign worker is paid by the Company for the cost of isolation for Covid-19 epidemic prevention upon his / her entry into Vietnam, this expense is the benefit of the employee. Therefore, the above expenditures are included in taxable income Personal income from salaries and wages of employees.
 

Official Letter 97748/CT-TTHT dated 10/11/2020 of Hanoi Tax Department on CIT and PIT for payments to employees during the Covid-19 epidemic.
⦁    In case the Company, during the covid-19 epidemic, incurs isolation expenses for the General Director of one-member limited liability company (not owned by an individual) who is a foreign expert working in Vietnam to perform quarantine According to law provisions, if these expenses clearly state the names of the beneficiaries, they will be included in the taxable income according to the provisions of Item d.3.2, Clause 2, Article 2 of Circular 111/2013 / TT-BTC.
⦁    The above-said expenses are those of a welfare nature directly paid to employees in addition to the agreed salary and bonus expenses and in accordance with the provisions of law, which are determined as deductible expenses when determined. income subject to CIT if it satisfies the provisions in Article 4 of Circular No. 96/2014 / TT-BTC above and the total expenditure for welfare is not more than 01-month average actual salary made in the tax year of enterprise.


 


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