Decree 15/2022/ND-CP guiding tax exemption and reduction policies under Resolution No. 43/2022/QH15
On 28 January 2022, Government issued Decree 15/2022/ND-CP (“Decree 15”) stipulating tax exemption and reduction policies under Resolution 43/2022 of the National Assembly on fiscal and monetary policies under the Socio-Economic Development and Recovery Program. Some keypoints of Decree 15 are summarized below:
Reducing Value Added Tax (“VAT”) applied in 2022:
- Reducing 2% in VAT rate, applicable to groups of goods and services currently subject to the 10% tax rate of businesses that calculate VAT using the credit method. The new VAT rate for these goods and services is 8%.
- Businesses that calculate VAT using direct method of percentage on revenue are entitled to 20% reduction of the percentage rate to calculate VAT when issuing invoices for goods and services eligible for tax reduction.
- The VAT reduction does not apply to some groups of goods and services such as telecommunications, financial activities, banking, securities, insurance, real estate, prefabricated metal and metal products, mining products (excluding coal mining), goods and services subject to excise tax, information technology, etc.
Goods and services not eligible for VAT reduction are detailed in the Appendix of the Decree. Decree 15 also stipulates the order and procedures for implementation as well as invoice requirements for goods eligible for VAT reduction.
Expenses that are deductible when determining taxable income (“CIT”):
- Businesses and organizations which are CIT payers, when determining the taxable income of the tax period 2022, are allowed to include in the deductible expenses the expenses for supporting or sponsorship in cash and in kind for Covid-19 prevention and control activities in Vietnam through certain organizations specified under Decree 15, including, the Central Committee Vietnam Fatherland Front at all levels, medical facilities, armed forces units, units, organizations authorized by state agencies, etc.
- Dossier to determine expenditures for support and sponsorship includes: Minutes of confirmation of support or sponsorship following Form No. 02 of Decree 15 or document (in paper or electronic form) certifying the support or sponsorship with the signature and seal of the representative of the business or organization being the support or sponsorship unit and the representative of the receiving unit; accompanied by legal invoices and documents as prescribed by law of supports or sponsorships in cash or in kind.