On guiding solutions on supporting damaged enterprises
|MINISTER OF FINANCE
|SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom – Happiness
|Official Letter No.: 6642/BTC-CST||Ha Noi, 21May 2014|
|Respectfully addressed to:||- People's Committees of provinces and centrally run cities;
- Department of Finance, Department of Taxation, Department of Customs.
To implement the directive of the Prime Minister at Notice No. 207/TB-VPCP dated 20 May 2014 of the Government Office regarding the Conclusion opinion of Prime Minister Nguyen Tan Dung on supporting and assisting affected enterprises to overcome the damages, early recover their production and business activities, Ministry of Finance requests Departments of Taxation, Departments of Customs of provinces and cities where enterprises were damaged by violations of law by some protesters to oppose China’s illegal placement of an oil drilling rig inside Vietnam’s territorial waters, to perform some following contents:
1. Tax and customs authorities:
- Coordinate closely with focal divisions appointed by provincial level People’s Committees (focal divisions) to solve problems related to administrative procedures; provide tax records, customs records and materials, documents stored in the tax authorities, customs authorities related to the determination of damaged value if any request of focal agencies or suggestion of damaged enterprises; support damaged enterprises recover lost tax records (tax filings, duty and tariff exemption and reduction, tax refund, records of tax payment extension etc.), customs documents (customs declaration, tax exemption and reduction, refund records etc.) and materials, documents for the determination of damaged value of affected enterprises.
- Send their officers to meet face-to-face with every affected company and coordinate with focal divisions to update the actual situation of affected enterprises, and guide the enterprises to follow relevant policies and regimes, also implement solutions to assist and support affected enterprises to overcome the damages, early recover their production and business activities at the Conclusion opinion of Prime Minister.
2. Extension of tax return filing, tax payment deadline and other payables to the state budget of affected enterprises:
a) Amount of extended tax:
- Amount of extended tax: the full amount of tax arisen prior to 30 April 2014, which has unpaid to the State budget, related to affected enterprises but not exceed the value of the damage. In case the value of the damage has not been determined, it shall base on their commitments to carry out the extension of tax payment.
- Such extension shall not exceed two years as from expiry date of tax payment. During such extension, delayed payment penalty on the amount of tax extended shall not be charged.
b) Dossier of application for tax payment extension includes:
+ Enterprise’s application for tax payment extension;
+ Inventory minutes of the value of damaged assets prepared by the enterprise or its competent representative, certified by focal division (photocopy). In case the inventory minutes is not available, it shall base on the enterprise's commitment for the value of damage to determine the amount of extended tax.
c) Filing time of dossier of application for the extension of tax returns and customs declaration
- For tax returns for the period of April 2014, filing time is extended to 20 June 2014.
Based on the list of damaged enterprises provided by focal division, the tax authorities shall determine enterprises are allowed to extend filing time of tax returns and inform them, a written proposal is not required.
- Extension of filing time applied for liquidation documents of processing contracts, maturity documents of tax exemption for produced goods for export, temporary import and re-export of damaged enterprises which fall due. Based on actual circumstances, Director of Customs Department decides the extension for filing liquidity documents up to 90 days after the deadline of liquidity.
d) Competence for deciding tax payment extension: The heads of tax authorities, who directly manage tax payers, issue decisions of tax payment extension.
Time limit for settlement: not later than 2 working upon the receipt of application from affected enterprises, tax authorities that directly manage tax collection shall issue the Decision of tax payment extension in the form number 02/GHAN issued under Circular No. 156/2013/TT-BTC dated 06 November 2013 of the Ministry of Finance.
3. Import and export duty exemption, reduction and tax refund and clearance of imported and exported goods:
a) Import and export duties exemption, reduction and tax refund:
- Amount of export, import duty is exempt or reduced equivalent to the amount of export and import duties of imported or exported goods that were damaged. In case enterprises paid export, import duties for damaged goods, they will get tax refund of paid amount of tax for damaged goods.
- Dossier of import and export duties exemption, reduction and refund includes:
+ Enterprise’s application for import and export duties exemption, reduction and refund for imported or exported goods that were damaged, showing the value of damaged goods and amount of duties requested forexemption, reduction and refund.
+ Inventory minutes of the value of damaged assets prepared by the enterprise or its competent representative, certified by a focal division (photocopy). In case the inventory minutes is not available, it shall base on the enterprise's commitment for the value of damage to determine the amount of exempt, reduced and refunded duty.
+ The customs dossier in accordance with Article 12 of Circular No. 128/2013/TT-BTC dated 10 September 2013 of the Ministry of Finance guiding customs procedures; customs inspection and supervision; export, import duty and duty management for exported, imported goods: 01 snapshot.
In case documentation, accounting books and so on are burnt, lost, it shall use records in customs offices or base on the enterprise's commitment to review exemption or reduction for enterprises.
- Competence for deciding duty exemption or reduction: Directors of Customs Departments of provinces and cities where affected enterprises import or export goods shall issue decisions of import and export duty exemption, reduction. In case the location where affected enterprises import or export goods is different to the location where losses occurred, the customs authorities where the loss occurred is responsible for coordinating with the customs authorities where the enterprises import or export goods to carry out export, import duty exemption or reduction.
After issuing the decision of duty exemption, customs authorities shall refund paid import duty to enterprises equivalent to amount of exempt import duty or effect the clearing of duty as required by enterprises.
b) Clearance of imported and exported goods:
Customs authorities allow clearance of imported and exported goods of affected enterprises with unpaid duties. In case the inventory minutes of the value of damaged assets is not available, it shall base on the enterprise's commitment for customs clearance.
5. Value added tax withholding or refund:
Tax authorities allow input value added tax withholding or refund for damaged goods and services that are not compensated by insurance companies. In case documentations, invoices are lost, it shall use tax records in tax offices to solve for enterprises.
- In case enterprises have sent VAT declarations, documentations and invoices to tax authorities: Tax authorities shall base on VAT declarations (accompanying invoices of goods and services purchased) to settle VAT withholding, refund for enterprises as prescribed.
- In case input documentations and invoices that have not declared, but burnt, lost or damaged:
+ Enterprises make a list of units (sellers) who provide goods and services for them, but not declared input withholding that invoices have lost, burnt or damaged. Enterprises must commit the accuracy of the information shown on the list.
+ Tax authorities support the enterprises to request those units (domestic) to send copies of the invoices to enterprises so that they can declare tax withholding. For tax payment documentations burnt, lost or damaged at the import stage, enterprises can request Customs authorities to provide copies or confirm the amount of paid tax as a basis to declare for tax withholding.
+ Tax authorities that directly manage the enterprises contact Tax authorities that directly manage the sellers to determine if the seller has declared output invoices for those transactions, the enterprises shall be allowed to declare input invoices respectively for tax withholding or refund accordance with the regulations of law.
6. Corporate income tax:
Enterprises are allowed to declare on deductible expenses when determining taxable income for the value of the damage that is not compensated or not within scope of compensation and borrowings interest cost for additional charter capital to recover damage results. For the cost of damage that is not compensated or not within scope of compensation, specific performance as follows:
- The value of damage certified by insurance units (or by focal division in the absence of insurance) after deducting compensation amount (if any) and recoverable value (if any), shall be regarded as deductible expenses when determining taxable income. Particularly fixed assets that are damaged, but repaired for further use, the cost that enterprises spent to repair the fixed assets shall be recognized as an increase of original cost of such assets for depreciation (not included in deductible expenses).
- Dossier for determining the value of loss includes:
+ Inventory minutes of the value of damaged assets prepared by the enterprise or its competent representative, certified by focal division (copy). In case the inventory minutes is not available, it shall base on the enterprise's commitment
+ Claim documents for damages accepted by insurance companies (if any)
+ Documents define compensation responsibilities of organizations and individuals (if any).
7. Special consumption tax reduction:
Implement cutting up to 30% of the payable special consumption tax for 2014, but not in excess of the value of the damaged assets after compensation.
- Amount of payable special consumption tax for 2014 that is the basis to determine amount of reduced tax is the amount of special consumption tax for taxable goods damaged which have been declared for special consumption tax.
- Dossier of application for tax reduction implemented under the guidance of Article 46 of Circular No. 156/2013/TT-BTC dated 06 November 2013 of the Ministry of Finance. Minutes determining the value of damage certified by insurance units (or by focal division in the absence of insurance). In case such minutes is not available, it shall base on the enterprise's commitment for tax reduction and carry out post-inspection after such minutes is available.
8. Land, infrastructure rental exemption or reduction:
Based on Minutes of damaged value, Department of Taxation coordinates with local appropriate authorities to advise People's Committees of provinces and centrally run cities in order to decide the exemption or reduction of land rents for damaged enterprises.
In case of companies taking damages to any rented infrastructure that associated with the land use right, Department of Taxation shall work with infrastructure business companies, damaged enterprises to determine the amount of infrastructure rent that damaged enterprises have to pay for infrastructure business companies; land rent exemption or reduction of infrastructure business companies is equivalent to the amount of infrastructure rent that damaged enterprises get exemption or reduction.
Infrastructure business companies is responsible for withholding infrastructure rent of the damaged enterprises equivalent to the land rent exemption or reduction.
9. On a monthly basis, Department of Taxation, Department of Customs are responsible for reporting results implemented in month under Notice No. 207/TB-VPCP dated 20 May 2014 of the Government Office to Ministry of Finance, People's Committees of provinces and centrally run cities , General Department of Taxation, General Department of Customs before the 10th day of subsequent month.
Any problem arises in the process of implementation, relevant agencies are required to inform Ministry of Finance for prompt settlement. /.