Our Vietnam Legal Update #177 would lead you on 03 legal issues:
I. Implementing the plan to support electricity bill reduction and electricity price reduction for electricity users
On 28 August 2021, the Government issued Resolution No. 97/NQ-CP on the plan to support electricity bill reduction and electricity price reduction (phase 5) for electricity users. The contents are as follows:
- Agreeing on a plan to support electricity bill reduction and electricity price reduction (phase 5) for electricity users who are affected by the Covid-19 epidemic as proposed by the Ministry of Industry and Trade according to Letter No. 523/BC-BCT dated 23 August 2021.
- The subjects eligible for support must meet the following conditions:
- Electricity customers: are factories or production facilities located in cities and provinces during the time of 25 August 2021, which are implementing social distancing under Directive No.16/CT-TTg and maintaining production in the following fields: (i) Enterprises processing and preserving seafood and aquatic products; (ii) Enterprises processing and preserving vegetables; (iii) Enterprises producing export goods with an export turnover of more than 1 billion USD in 2020.
- Buying electricity directly from the Electricity Corporation/Electricity Company under the Vietnam Electricity or other electricity retailers.
- The rate of support: 10% discount (before VAT) on electricity bills for the above customers.
- The period of support to reduce electricity bills for electricity users is 03 months from the electricity bill period in September to the end of the electricity bill period in November 2021.
- The Government assigned the Ministry of Industry and Trade to take responsibility and coordinate with relevant agencies to implement the above plan.
II. Guidance on the application of PIT on mid-shift meal payment for employees
Bac Ninh Tax Department issued Official Letter No. 2177/CTBNI-TTHT dated 5 August 2021 to guide the implementation of the PIT policy. The contents are as follows:
- Regarding the state-owned enterprises, the enterprise’s mid-shift meal payment rate is used as a basis for determining PIT taxable income only if the enterprise does not organize mid-shift meals or lunches for employees (not directly cook or hire a cooking unit at the company or buy industrial meals) but pay money directly to employees.
- Regarding an enterprise with 100% foreign investment, the organization of mid-shift meals for employees shall be decided by the General Director and the President of the Trade Union to ensure, regenerate, and improve the health of employees, encourage the organization to directly cook or buy meals for employees. This mid-shift meal payment is not included in the employee’s PIT taxable income, does not control the number of expenses that the company must pay to suppliers.
- For example, if the Company hires a supplier to cook and provide meals to employees at the Company’s cafeteria, the payment for the meal supplier is equivalent to VND 1,040,000/person/month. This expense is not included in the employee’s PIT taxable income.
III. VAT rates
Bac Ninh Tax Department issued Official Letter No. 2670/CTBNI-TTHT dated 24 August 2021 to respond to Vision Semicon Vietnam Company Limited (the “Company”) regarding the VAT rates with the following contents:
In case the Company signs a contract to provide repair and installation services for the enterprises overseas, and the Company is assigned to perform the service at places inside and outside the non-tariff zones, this service VAT rates apply as follows:
- If the service is provided and consumed in the non-tariff zones and meets the conditions specified at Point b, Clause 2, Article 9 of Circular No. 219/2013/TT-BTC dated 31 December 2013 issued by the Ministry of Finance, the applicable tax rate is 0%.
- If the service is provided and consumed outside the non-tariff zones or does not meet the conditions specified at Point b, Clause 2, Article 9 of Circular No. 219/2013/TT-BTC dated 31 December 2013 issued by the Ministry of Finance, the applicable tax rate is 10%.
Maybe you are interested in reading other Legal Update of BLawyers Vietnam: August 2021 (Part 4) | August 2021 (Part 3) | August 2021 (Part 2) | August 2021 (Part 1) | July 2021 (Part 5) | July 2021 (Part 4) | July 2021 (Part 3) | July 2021 (Part 2) | July 2021 (Part 1) | June 2021 (Part 4) | June 2021 (Part 3)