Our Vietnam Legal Update #182 would lead you on 03 legal issues:
I. Land rent reduction in 2021 for those affected by the Covid-19 epidemic
The Prime Minister issued Decision No. 27/2021/QD-TTg dated 25 September 2021 on reducing land rent for 2021 for those affected by the Covid-19 epidemic. The main contents are as follows:
- Subjects to be applied include: organizations, units, enterprises, households, and individuals being directly leased land by the State under a decision or contract of a competent state agency in the form of annual land rental payment. (“Land Tenant”).
- Land rent reduction: 30% reduction of land rent that must be paid in 2021 for Land Tenants. This reduction does not apply to the outstanding land rent of the years before 2021.
- In case the Land Tenant has already received a reduction in land rent according to the provisions of law, the reduction of 30% of the land rent shall be calculated on the payable land rent after the reduction has been made.
- To be eligible for exemption or reduction, the Land Tenant must have a dossier of land rent reduction including: (i) A written request for land rent reduction in 2021 (under the form attached to this Decision); (ii) Land lease decision or land lease contract of a competent state agency (a copy version). After being considered by the competent authority, the Land Tenant will receive a decision to reduce the land rent.
- The order and procedures for land rent reduction are specified in this Decision.
- In case the land tenant submits the application for reduction of land rent from 1 January 2022, the reduction of land rent under this Decision will not be applied.
II. VAT, the taxable value for software
The General Department of Customs has issued Official Letter No. 3530/TCHQ-TXNK dated 13 July 2021 on VAT and taxable value for software with the following contents:
- In case the imported goods are machines/equipment imported together with the operating system, the customs value is the transaction value of such machines/equipment and operating system.
- An operating system is a set of data, programs, or guidelines presented in form of commands, codes, coding schemes, or any other forms that act as an interpreter for the user and a machine/a piece of equipment and provides an environment for the user to operate and control the functions of the machine/equipment when it is integrated into such machine/equipment.
- The operating system is imported for the purpose of upgrading or replacing an operating system whose value was aggregated with the value of imported machines/equipment during the first importation, the value of the operating system is not aggregated with the customs value of the machines/equipment.
- In case the company imports advanced software that is installed on the computer to further upgrade the system management and control features at the request of the user, the value of the imported operating and control software shall not be aggregated with the customs value of machinery and equipment.
- Computer software, including software products and software services, are not subject to VAT.
III. VAT, CIT, and license fee policies for inquiry and customer care consulting activities
The General Department of Taxation issued Official Letter No. 3490/TCT-CS dated 14 September 2021 on the performance of state budget obligations for the activities of answering questions, consulting, and taking care of customers with the following contents:
- Non-business units affiliated to Vietnam Social Security shall make invoices, declare, and pay taxes according to regulations when receiving the revenue divided from Viettel of the following business cooperation contracts:
- Vietnam Social Security assigns an affiliated non-business unit to sign a contract with Viettel Telecommunications Corporation to provide information answering and customer care services on number 1900;
- The parties divide the revenue according to the ratio inclusive of VAT; and
- Viettel issues invoices to customers to use the service declares VAT according to regulations.
- In case the non-business unit affiliated to Vietnam Social Security declares VAT by the deduction method, the VAT invoice shall be used, with the corresponding sales number and VAT on the invoice.
- In case the non-business units affiliated to the Vietnam Social Security declare VAT by the method of calculating directly on VAT equal to the percentage multiplied by the turnover, the sales invoice shall be used, and VAT shall be paid at the rate of 5% multiplied by revenue.
- Non-business units that conduct business in goods and services with taxable income and can determine revenue, expenses, and income, the payable enterprise income tax amount in the tax period is equal to the taxable income. multiplied by the export tax. In case these units can account for revenue but cannot determine the costs and income of business activities, they shall declare and pay corporate income tax calculated as a percentage of the revenue from selling goods and services.
- In case non-business units affiliated to Vietnam Social Security have production and business activities, they must pay a license tax as prescribed.
Legal Update #182 (EN version)
Maybe you are interested in reading other Legal Update of BLawyers Vietnam: October 2021 (Part 1) | September 2021 (Part 4) | September 2021 (Part 3) | September 2021 (Part 2) | September 2021 (Part 1) | August 2021 (Part 4) | August 2021 (Part 3) | August 2021 (Part 2) | August 2021 (Part 1) | July 2021 (Part 5) | July 2021 (Part 4)