Tax Policies Amended to Facilitate Businesses

10:14:22 PM | 9/29/2014

With primary objectives of removing difficulties, minimising administrative procedures, and facilitating businesses to boost growth, the Ministry of Finance has completed a draft decree on amendments and supplements to a number of articles in tax decrees which are being submitted to the Government for approval.
Companies declare corporate income tax only once a year
To reduce turns and hours of taxpayers in their competing declaration and payment procedures, together with Circular 119/2014/TT-BTC on administrative procedure reform and simplification, the Ministry of Finance amended and supplemented many new contents to Decree No. 83/2013/ND-CP detailing a number of articles of the Law on Tax Administration to create favourable conditions for taxpayers. Specifically, the quarterly revenue limit for value-added tax (VAT) declaration will be raised from VND20 billion to VND50 billion. Taxpayers are allowed to settle temporary quarterly payments and perform the final accounting on annual basis, except for property transfer and other business activities specified in the laws. Particularly, to shorten the time for corporate dissolution procedures, the draft decree specifies that "Tax authorities shall bear responsibility for checking tax settlement by taxpayers within 15 working days from the date of receipt of data and records relating to tax obligations settlement of taxpayers in case taxpayers are split off, amalgamated, transformed, dissolved and terminated. In case a company dissolves or terminates operations, the Ministry of Finance shall guide tax authorities to order and use results of independent audit firms and corporate procedure service organisations to examine and finalise tax payments for such companies.
Besides, to attract big, important investment projects as well as answer remarks of enterprises on the application of priority measures in export and import tax management, apart from binding conditions in Decree 83/2013/ND-CP, the draft decree supplements a regulation that “For companies with large investment scales, national key projects and prioritised investment projects approved by the Prime Minister, the Ministry of Finance will consider recognising them as prioritised companies when they have not satisfied the condition of two-year operations used to assess law compliance and assess the creditability by customs authorities.
With timely revisions and supplements to mechanisms and policies, drastic and synchronous deployment of discipline-strengthening measures, the Ministry of Finance is striving for the realisation of the target of reducing 20 hours of tax payment for enterprises within this year.
Direct welfares for employees are counted corporate income tax expense
The objectives of removing difficulties against enterprises and facilitating their development are clearly expressed by compilers in amendments and supplements to Decree No. 218/2013/ND-CP dated December 26, 2013 on instructions for enforcement of the Law on Corporate Income Tax. Compilers proposed “Direct welfare expenses for employees recorded in invoices and papers with the contents of funeral expenses and wedding expenses for employees; holiday expenses and health expenses; in-house training expenses; expenses for employees’ families affected by natural calamities, accidents and illness; rewards for employees’ offspring with good academic achievements; expenses for employees’ travelling to homeland during national holidays. The blank expense value is limited at average one-month salary in the tax year.”
Besides, to ensure interests of enterprises and encourage them to expand investments for production and business activities, the draft decree also supplemented regulations on investment incentives. In case of differential resulted from the revaluation of State-owned enterprises (SOEs) after being equitised, the current law requires recalculation and tax repayment. However, in reality seen in SOE equitisation from 2012 to date, the differential resulted from the revaluation of fixed assets was recorded as the increase to State capital in such enterprises. But, as they fail to seek money for tax payment, the equitisation of SOEs has been delayed. Therefore, to deal with this issue, the draft decree proposed not collecting taxes on the difference arising from asset revaluation of SOEs after being equitised, reshuffled or rearranged.
Three more cases free from personal income tax finalisation
In amendments and supplements to Decree No. 65/2013/ND-CP dated June 27, 2013 on detailed regulations on a number of articles of the Law on Personal Income Tax, the draft decree not only allow individuals with incomes arising from the transfer of securities and real estate to choose either of PIT payment methods (based on every single transfer or annualised income, applicable to securities transfer, and based on the price of every single transfer or taxable income from every transfer of real estate) but also suggests exemption of PIT payment finalisation for three subjects (individuals pay a tax rate of 0.1 percent of securities transfer value; individuals and business household with incomes from business activities already paid excise taxes; and individuals are insurance agents, lottery agents and multi-level marketing agencies who have their PIT paid by their companies). Besides, in the draft decree, the Ministry of Finance also asked the Government to allow employees’ benefits arising from houses built by employers in industrial parks and economic zones to be free from taxable incomes as they are necessarily treated in the likes of State officials using State houses.
 Hien Hung