Following the devastation caused by Typhoon No. 3, the General Department of Taxation issued a directive on September 13, 2024 (Circular No.4062/TCT-CS) outlining support measures for organizations, individuals, and businesses impacted by the typhoon and subsequent floods.
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Photo 1:Guide to tax reduction policies for households and individual businesses affected by natural disasters _Hotline: 0972118764
Pursuant to the Prime Minister's Directive No. 92/CD-TTg dated September 10, 2024, on focusing on post-disaster recovery efforts, and in order to implement the guidance therein, the General Department of Taxation hereby requests the Tax Departments in provinces and cities where organizations, individuals, and businesses have suffered losses due to Typhoon No. 3 and subsequent flooding to implement the following tax reduction guidelines for affected households and individual businesses:
Based on the legal provisions stipulated in Article 5 of the Personal Income Tax Law 2007 regarding personal income tax reductions, Article 9 of the Special Consumption Tax Law 2008, Clause 1 of Article 9 of the Natural Resources Tax Law 2009 regarding exemptions and reductions of natural resource tax, as well as Articles 80, 81, 82 of the Tax Administration Law 2019; Articles 52, 53, 54, 55, 64 of Circular No. 80/2021/TT-BTC and Circular No. 80/2021/TT-BTC governing cases where tax authorities grant tax exemptions or reductions, as well as procedures, documents, timeframes, and results of tax exemption or reduction applications.
According to the aforementioned regulations, in cases where households and individual businesses face difficulties due to natural disasters, they will be eligible for reductions in the following taxes:
(1) Personal income tax will be reduced in proportion to the level of damage incurred, but not exceeding the amount of tax due;
(2) The reduction in special consumption tax will be determined based on the actual losses caused by natural disasters or unforeseen accidents, but not exceeding 30% of the tax due for the year in which the loss occurred and not exceeding the value of the damaged assets after any compensation (if any);
(3) Natural resource tax will be reduced in proportion to the amount of natural resources lost; if the tax has already been paid, a refund will be granted or the amount will be credited against the natural resource tax due in the subsequent period.
The aforementioned tax reduction policies aim to alleviate the tax burden and help affected households and individuals recover quickly from natural disasters, stabilize their production and business activities, and contribute to economic recovery in severely affected areas.
Note: Households and individual businesses shall submit tax reduction applications as prescribed in Articles 53, 54, and 55 of Circular 80/2021/TT-BTC to the competent tax authority. Within 30 days (or 40 days in cases where on-site verification is required), from the date the tax authority receives a complete application, it shall issue a decision on the tax exemption or reduction, or issue a written notification stating the reasons for the denial of the tax reduction. Tax reduction applications must be submitted in accordance with the prescribed procedures and deadlines for the tax authority to consider and decide.
Therefore, the General Department of Taxation has issued guidelines for local tax departments to implement tax reductions for households and individual businesses affected by natural disasters, in accordance with the provisions of the law. The tax reductions include reductions in personal income tax, special consumption tax, and natural resource tax based on the level of damage incurred, but not exceeding the amount of tax due.
Official Letter No. 4062/TCT-CS issued on September 13rd, 2024.
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