General Department of Taxation
The payment for foreign contractor withholding tax is not permitted to be deferred
Official letter No. 3086/TCT-CS dated August 4th, 2020 of the General Department of Taxation regarding deferral of tax payment under Decree No. 41/2020/ND-CP.
This Official letter is to reply to some issues relating to the policy on deferral of tax payment due to impact of the Covid-19 pandemic as regulated at Decree No. 41/2020/ND-CP.
Accordingly, with regard to withholding tax, it is only allowable to defer the payment for tax which is directly declared and paid by the foreign contractor. The withholding tax declared and paid by the Vietnamese party on behalf of the foreign contractor shall not be eligible for deferral.
Regarding deferral of payment of corporate income tax (CIT), with regard to CIT declared in the 2019’s annual statement, it is only allowable to defer the remaining payable CIT under the 2019’s annual report and it is not exceeding 20% of the CIT payable for the whole year according to the annual report. With regard to CIT declared in the first and second quarters of 2020 eligible for the deferral, it does not include CIT declared and paid whenever it is incurred on income from real estate transfer.
Relating to deferral of payment for land rental, it is only applicable to establishments that directly lease land of the State in the form of annual payment of land rents engage in business lines or business sectors specified in Article 2 of Decree No. 41/2020/ND-CP and conduct production and business activities as well as earn revenue in 2019 or 2020. In case revenue is not generated in both of the years 2019 and 2020, they are not eligible for the deferral under Decree No. 41/2020/ND-CP.
With regard to affiliates of small and micro enterprises eligible for deferral of tax payment, they have to declare the number of employees, revenue, capital according to the figures declared by the enterprises.
If an application for deferral of tax payment which has been sent electronically has errors, the enterprise shall send the additional hard copy of application together with the written explanation of the changed information to the tax authority.