Vietnam: Tax, Land Rental Payment Deadlines and 2% VAT Reduction Extended till End of 2024

The Vietnamese government is easing financial pressures by extending tax and land rental deadlines and prolonging the 2% VAT reduction on certain goods and services through the end of 2024. The experts at ECOVIS AFA VIETNAM provide a detailed overview of these recent measures, which impact various tax and land rent obligations.

On 17 June 2024, the Government recently issued Decree No. 64/2024/ND-CP (Decree 64) extending the payment deadlines for Value Added Tax (VAT), Corporate Income Tax (CIT), Personal Income Tax (PIT) and land rent in 2024. Then, on 30 June 2024, the Government also issued Decree No. 72/2024/ND-CP (Decree 72) extending the 2% VAT reduction on certain goods and services for the second half of 2024.

1. VAT (excluding import VAT)

1.1. Extension of VAT payment deadline

The Government has extended the tax payment deadline for VAT payable (including the amount allocated to local governments at provincial level) of the tax period from May to September 2024 for monthly VAT returns and the second quarter of 2024, the third quarter of 2024 for quarterly VAT returns of businesses and organisations eligible for the extension.

The extension period is five months for VAT of May 2024, June 2024, and the second quarter of 2024, four month extension for VAT of July 2024, three month extension for VAT of August 2024, two month extension for VAT of September 2024 and the third quarter of 2024. The extension period is calculated from the end of the VAT payment deadline in accordance with the provisions of the tax management law.

Enterprises and organizations are eligible for an extension to declare and submit monthly and quarterly VAT declarations in accordance with current legislation, but are not required to pay the VAT due on the VAT declaration.

1.2. Extension of 2% VAT reduction

On 28 December 2023, Decree 94/2023/ND-CP was issued, in accordance with Resolution No. 110/2023/QH15, and implemented a 2 percent VAT reduction on goods and services that were taxed at 10% VAT, with certain exceptions.

Under Decree 72, the Vietnamese government has extended the VAT reduction to the end of 2024 but has not expanded the scope of goods and services eligible for the reduced tax rate. The Decree 72 included a comprehensive list of goods and services excluded from the 2% VAT reduction, detailing specific product codes and HS codes. This was to be effective from 01 July 2024 to 31 December 2024.

Sectors excluded from the 2% VAT reduction are telecommunications, IT, finance, banking, insurance, real estate, metals, prefabricated metal products, refined petroleum, chemical products, and products and services subject to special consumption tax.

2. CIT

With regard to corporate income tax, the government has extended the deadline for the payment of the quarterly advance payment of corporate income tax for the second quarter of 2024 for businesses and organizations eligible for the above-mentioned extension.

The extension period is three months from the end of the corporate income tax payment deadline according to the provisions of the tax management law.

3. VAT and PIT of household businesses and individual businesses

The government has extended the deadline for the payment of the amount of tax due in 2024 for business households and individual business owners operating in the specified economic sectors and fields.

Business households and individual business owners must pay the extended tax amount under this clause by 30 December 2024.

4. Land rental

The deadline for the payment of 50% of the land rent payable in 2024 (the amount payable in the second period of 2024) has been extended for businesses, organizations, households, and individuals eligible for the extension who are leasing land directly from the State in the form of annual land rent payments on the basis of a decision or contract by a competent State authority.

The extension period is two months from 31 October 2024.

This Decree will be effective from the date of signing until 31 December 2024.