TAX ALERT JULY 2020
In this July Newsletter, we would like to introduce to our customer's new policies related to tax, labor, and other regulations including:
- Time to increase the family deduction when calculating Personal Income Tax
- Adjusting the ceiling of interest on loans of enterprises with associated transactions
- 50% discount on registration fees for domestically manufactured and assembled cars
- Law on ManagementTax Notice No. 38/2019/QH14 dated June 13, 2019
1. Time to increase the family deduction when calculating Personal Income Tax
On June 2, 2020, the National Assembly Standing Committee issued Resolution No. 954/2020/UBTVQH14 adjusting the deduction for personal income tax circumstances. The resolution takes effect from July 1, 2020, and applies from the tax period 2020.
Accordingly, the deduction for family circumstances specified in the Law on Personal Income Tax is adjusted as follows:
– The deduction for taxpayers is 11 million VND/month (equivalent to 132 million VND/year);
– The deduction for each dependent is 4.4 million VND/month.
2. Adjustment of the ceiling of interest on loans of enterprises with associated transactions
On June 24, 2020, the Government issued Decree No. 68/2020/ND-CP amending and supplementing Clause 3, Article 8 of Decree No. 20/2017/ND-CP stipulating tax administration for enterprises. Associated transaction.
Accordingly, amending the regulations on the total deductible interest expense when determining the taxable income of enterprises with associated transactions as follows:
– Total interest expense (after deducting deposit interest and loan interest) incurred in the deductible period when determining taxable incomedoes not exceed 30% of the total net profit from business activities during the period plus interest expenses (after deducting deposit and lending interests) incurred during the period plus depreciation expenses incurred during the period.
– Subjects not subject to this regulation of controlling interest expenses: Credit institutions according to the Law on Credit Institutions; To organize insurance business according to the Law on Insurance Business; Official Development Assistance (ODA) loans; Government's concessional loans for the Government's borrowing of foreign loans to enterprises; Loans to implement the national target program (new rural program and sustainable poverty reduction); Loans to invest in programs and projects implementing the State's social welfare policies.
Decree 68/2020/ND-CP takes effect from June 24, 2020, and applies to the 2019 corporate income tax period. At the same time, businesses are allowed to submit additional declarations of tax finalization declarations. CIT for the years 2017 and 2018 to determine the interest expense, the corresponding tax payable before January 1, 2021.
3. 50% discount on registration fees for domestically manufactured and assembled cars
On June 28, 2020, the Government officially issued Decree No. 70/2020/ND-CP stipulating that the first-time registration fee collection rate will be reduced by 50% for cars, trailers, or semi-trailers. Towed by cars and similar vehicles manufactured and assembled in the country until the end of December 31, 2020.
Accordingly, from June 28 to the end of December 31, 2020, the registration fee for domestically manufactured and assembled cars is equal to 50% of the fee specified in Decree No. 20/2019/ND. - CP. Specifically, the registration fee for cars, trailers, or semi-trailers towed by cars and similar vehicles is 1%. Particularly for passenger cars with 09 seats or less, the first registration fee is paid at the rate of 5%…
4. Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019
The XIV National Assembly promulgated the Tax Administration Law 2019 No. 38/2019/QH14 dated June 13, 2020, which comprehensively amended and supplemented tax management issues compared to the 2006 Law on Tax Administration and the Law on Tax Administration. Amendment 2012. In which, for the first time, issues arising in practice were legalized, but only regulated in legal documents at the level of Circulars or Decrees such as related transactions, e-invoices, agents. Tax…
Have a good day!