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Decree 92 on exemption and reduction of taxes for enterprises and individuals impacted by COVID-19.

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Decree 92 on exemption and reduction of taxes for enterprises and individuals impacted by covid-19

On 27 October 2021, the Government issued Decree 92/2021/ND-CP providing detailed regulations on implementation of Resolution 406/NQ-UBTVQH15 dated 19 October 2021, regarding several measures to support enterprises and people suffering COVID-19 impacts. The Decree took effect on 19 October 2021.


Key points of the Decree include:

2021 Corporate Income Tax Reduction

Applicable subjects and revenue criteria

The applicable subjects are entities manufacturing and trading goods and services, including:

  • Enterprises established under Vietnam law;
  • Organisations established under the Law on Cooperatives;
  • Non-business units established under Vietnam law; and
  • Other entities are established under Vietnam law if they operate a business that generates income.

Which meet the following criteria:

i)    Having total revenue in 2021 not exceeding 200 billion VND; and
ii)   Having total revenue in 2021 lower than that of 2019.

The latter criterion does not apply to the subjects that are newly established, merged, consolidated, split up, or split off in the 2020 and 2021 tax periods.



Eligible entities will be entitled to a 30% reduction in Corporate Income Tax (CIT) payable for 2021.

The enterprise income tax period follows the calendar year. If an enterprise applies a financial year different from the calendar year, its income tax period follows the applicable financial years under Law on Corporate Income Tax and guiding documents.


Criteria for applicable revenue

Revenue for the CIT period includes revenue from the sale of goods, processing services, and provision of services of the company and its dependent units and business locations. It also includes revenue from business activities in the form of business cooperation contracts such as price subsidies, surcharges, and extras that enterprises are entitled to follow the provisions of the Law on Corporate Income Tax and its guiding documents, excluding sale deductions, revenue from financial activities and other incomes.

Where an enterprise is newly established, changes its form of enterprise, changes its form of ownership, consolidates, merges, splits up or splits off, dissolves, or goes bankrupt in the CIT period so it does not operate for a full 12 months, then its revenue in the period is determined by the actual revenue in the tax period, divided by the number of operating months in the tax period, multiplied by 12 months, with the result counted as a full month.

If the first tax period of a newly established enterprise is 2020 or the last tax period for an enterprise that changes its form of enterprise, changes its form of ownership, consolidates, merges, slips up or splits off, dissolution, goes bankrupt is 2022 and the operation time (in 2020 or 2022) is less than 3 months which is allowed to combine into the 2021 tax period, the applicable revenue and CIT only apply to the 12 months of the 2021 tax year.


CIT reduction determination

The CIT reduction in 2021 is calculated on the total income of the enterprise, including those specified in Clause 3, Article 18 of the Law on Corporate Income Tax. The reduction amount is based on the CIT payable for the 2021 tax period less any incentives that the enterprise is entitled to according to relevant regulations.


Application process

i)    Based on 2019 revenue and estimated revenues for 2021, the enterprise will self-calculate the CIT reduction when determining its quarterly provisional CIT and when finalising its annual CIT payable. Enterprises will declare the reduction using the forms in Appendix II in the Decree, in Circular 80/2021/TT-BTC dated 29 September 2021 and Decree 126/2020/ND-CP dated 19 October 2020.
ii)   When undertaking the 2021 CIT finalisation, any under/overpayment of quarterly provisional CIT compared to the finalised payable will be processed under the law on tax administration.

Where an enterprise is deemed not eligible for the 2021 CIT reduction through inspection, examination, or audit, or the payable amount is higher than the declared amount, it is required settle the outstanding tax. The enterprise will be subject to late payment penalties as well as other penalties for tax administration violations.

If an enterprise supplements the CIT declaration for the 2021 tax period, or according to the conclusion of an inspection, examination, and audit of the competent authorities, which results in:

  • An increase in payables: if the enterprise still satisfies the criteria for 2021 CIT reduction in this Decree, the additional amount will also be subject to the 30% reduction.
  • A decrease in payables: the overpaid tax will be processed according to relevant regulations.

Tax Exemption for Business Households and Individuals

Applicable subjects

The applicable subjects are business households and individuals who are residents and engage in all business activities in locations affected by COVID-19 in 2021.

The list of locations affected by COVID-19 will be issued by the Provincial People’s Committee, according to notifications in 2021 of the competent local authority related to the Covid-19 epidemic, including the suspending production and business activities for one or more business households and individuals doing business in the locality (including the blockade and social isolation of one or more areas in the locality).



Eligible business households and individuals are exempted from personal income tax (PIT), value-added tax (VAT), special consumption tax, natural resource tax, and environmental protection tax arising from production and business activities in Quarter 3 and Quarter 4 of 2021.

The exemption specified in this Decree does not apply to incomes from providing software products and services, digital information content products and services on entertainment, video games, digital movies, digital photos, digital music, and digital advertising.

Taxes paid by eligible business households and individuals in Quarter 3 and Quarter 4 of 2021 will be offset against tax obligations in the next period or refunded under relevant laws.


Exempted tax determination and application process

i)   If the tax authority is required to issue a notice of payment:

    • The tax authority will determine the exemption based on the tax payable of the months in Quarter 3 and Quarter 4 of 2021.
    • The tax authority promulgates a decision on tax exemption to each business household and individual according to Form No. 01/TBSMT-CNKD in Appendix II in the Decree.

ii)  If the tax authority is not required to issue a notice of payment:

    • Taxpayers will determine the exempted amount based on the tax payable according to their tax declaration. If the taxpayer declares tax yearly or by payment period (for property tax, private house construction, or declaration when incurs), the exempted tax is based on the actual revenue generated in Quarter 3 and Quarter 4 of 2021. If the actual income in Quarter 3 and Quarter 4 of 2021 is not indicated in contracts of providing goods/services, the amount will be determined according to the average monthly income upon the contract value.
    • Business households and individuals will determine the after-exemption tax payable to declare in the tax return and complete the form of determination of the exempted tax according to Form No. 01-1/PL-CNKD in AppendixII in this Decree to be submitted together with the tax return.

Value-Added Tax Reduction

Applicable subjects

VAT reduction applies to the following goods and services:

i)    Transport services (railway transport, water transport, aviation transport, other road transport); accommodation services; food and drink services; services of travel agencies, tour operators, and support services related to promotion and organisation of tours.

ii)   Publishing products and services; cinematographic services, production of television programmes, sound recording, and music publishing; works of art and composing services, arts, and entertainment; services of libraries, archives, museums, and other cultural activities; sports, recreation and entertainment services (excluding publishing software and goods and services produced and provided online).

Details of goods and services eligible for tax reduction are to comply with Appendix I of the List of goods and services eligible for value-added tax reduction promulgated together with this Decree.



VAT reduction is effective from 1 November 2021 to 31 December 2021 and determined as follows:

i)    Entities declaring VAT under the deduction method are entitled to a reduction of 30% in the VAT rate for applicable goods and services.

ii)   Entities declaring VAT under the direct method (payable VAT amount based on a percentage of revenue) are entitled to a 30% reduction to the respective rate for VAT calculation.


Application process

i)   For entities using the VAT deduction method:

When issuing a VAT invoice for the provision of goods and services subject to VAT reduction, the VAT rate line will be presented as “the prescribed tax rate (5% or 10%) x 70%”. It is then followed by the VAT amount and the total amount to be paid by the buyer.

Based on VAT invoices, the seller and the buyer will declare the reduced tax amount presented on the invoices as their output VAT and input VAT respectively.

ii)   For entities applying VAT direct method:

When issuing a sale invoice for the provision of goods and services subject to VAT reduction, the seller will write the full amount of goods and services before the reduction in the “Amount” column and write the after-reduction amount in the “Total amount” line. The seller will also concurrently note “reduced (amount) equivalent to 30% of the rate to calculate VAT according to Resolution 406/NQ-UBTVQH15” on the invoice.

If the entity engages in the provision of various goods and services, when issuing invoices, the entity will issue separate invoices for goods and services that are subject to VAT reduction.

Exemption for Late Payment Interest

Enterprises and organizations (including dependent units, business locations) incurring a loss for the 2020 tax period are exempted from penalties for late payment of taxes, land use fees and land rental fees in 2020 and 2021. This provision does not apply to cases where the late payment interest has been paid.


Exempted late payment determination

The tax authority and other relevant authorities managing taxes, land use fees, and land rental fees will determine the late payment amount in 2020 and 2021 of the taxpayers and issue a decision on exemption of late payment interest based on the tax management data.


Application process

i)   The taxpayer submits a written request for exemption from late payment interest, stating the loss incurred in the 2020 tax period according to Form No. 01/MTCN in Appendix II in this Decree, to the managing tax office and relevant authority managing land use tax and land rental directly, electronically or via post (with an original or certified copy of minutes of inspection decision where the entity was inspected).

ii)  The tax authority examines the losses of the entity in 2020 and issues the decision of late payment exemption for the eligible entity electronically, and publicly posted on the website of the tax authority within 15 working days from the receipt date of the request.


If you need any assistance with these or any other matters relevant for international investors in Vietnam, our experts are ready to work with your company to ensure you understand how the above will apply to your specific situation in Vietnam.


Contact our teams for expert support and further information on managing corporate compliance in Vietnam.

Thao Do, Accounting Director


Matthew LoureyManaging Partner


Updated on November 11, 2021

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