On 11 March 2020, the Ministry of Finance issued a draft Decree to defer certain tax payments to support businesses that are effected are impacted by Covid-19. The final draft is intended to be submitted to the Government for approval shortly, after feedback and comments have been sought from the community.
Applicable beneficiaries of the draft Decree
The draft Decree intends to provide tax deferrals to a range of enterprises, individuals and household businesses that undertake the following business activities:
- Those involved in production activities covering:
- agricultural, forestry and fisheries sectors;
- production and processing of food, textile & garments, and footwear;
- production of rubber products;
- production of electronic products and computers; and
- automobile manufacturing and assembling (except for cars with nine seats or fewer).
- Those operating in service sectors covering
- transport sectors (railway, road, waterway, aviation, warehousing and supporting activities for transportation);
- accommodation and catering services; and
- travel agents, tour businesses and support services related to tour promotion and organisation.
- Small and super small enterprises defined by regulations of the Law on Supporting Small and Medium Enterprises.
Extended deadline for corporate VAT payments
VAT payments for companies will be delayed by 5 months from their current deadlines, with companies still required to submit and file VAT returns in accordance with current filing deadlines.
- Companies that file VAT on a monthly basis will have their VAT payments for March, April, May and June 2020 deferred.
- Companies that file VAT on a quarterly basis will have their VAT payments for Quarter 1 and Quarter 2 deferred.
Deferrals also apply to most dependent branches where they file separate VAT returns.
Extended deadlines for household businesses and individuals for PIT & VAT
For household businesses and individuals in the specified sectors/business activities, the payment deadline for VAT and PIT will be extended until 15 December 2020.
Annual land rental fee deferral
The first payment for 2020 annual land rental fees, where these payments are paid directly to the State, will be deferred for 5 months, where the land is used for the specified sectors/business activities.
Those wishing to take advantage of the above are expected to formally request from the authorities.
Further specifics on the above will be released when the draft Decree progresses further.