A factory damaged by Typhoon Yagi. — Photo chinhphu.vn

The General Department of Taxation (GDT) has sent a document to 26 tax departments outlining solutions to support organisations, individuals and businesses suffering losses due to Typhoon Yagi and related flooding.

The GDT asked the tax departments of provinces and cities where organisations, individuals and businesses suffered damage from the typhoon and post-storm floods to provide guidance to taxpayers.

The department is also looking into law provisions on tax exemptions, reductions, extensions and other tax policies for taxpayers affected by natural disasters.

According to the GDT, business households and individuals just need to submit a request for an extension no later than September 30 to receive a tax payment extension. Tax payment extensions are considered based on the taxpayer's request for a period of no more than two years from the tax payment deadline, on a case-by-case basis.

In addition, taxpayers are exempted from late payment interest in cases of force majeure. Taxpayers who are fined for administrative tax violations and who suffer damage in cases of force majeure are also exempted from fines, although the maximum total amount of fines exempted must not exceed the value of the damaged assets and goods.

The amount of tax eligible for a tax payment extension is the amount of tax owed up to the time the taxpayer encounters a natural disaster, disaster, epidemic, fire or unexpected accident, but it cannot exceed the value of the material damage after compensation and insurance amounts, according to regulations.

If the dossier is legal, complete and follows the prescribed form, the tax authority will notify the taxpayer in writing of the tax payment extension within 10 working days from the date of receipt of the complete dossier. If the dossier is incomplete, the authority will notify the taxpayer in writing within three working days from receipt.

Hà Nội to provide tax exemptions and reductions for Yagi victims

The Hà Nội Tax Department will also deploy policies to extend, exempt and reduce taxes in case of natural disasters to remove difficulties for businesses and taxpayers affected by Typhoon Yagi.

Taxpayers who encounter difficulties due to natural disasters, fires, accidents or serious diseases that affect their ability to pay taxes will be considered for a personal income tax reduction corresponding to the level of damage but not exceeding the tax amount payable.

Producers of goods subject to a special consumption tax who encounter difficulties due to natural disasters or unexpected accidents will also receive tax reductions. The tax reduction is determined based on actual loss, but must not exceed 30 per cent of the tax payable in the year the loss occurs.

Input value-added tax on goods and services used for production and trading is fully deductible, including uncompensated value-added tax on lost value-added tax goods.

Regarding corporate income tax, in case an enterprise has expenses related to the value of losses due to natural disasters, epidemics, fires and other force majeure cases that are not compensated, this expense is included in deductible expenses when determining taxable income.

Resource taxpayers who encounter natural disasters, fires or unexpected accidents that cause damage to declared and tax-paid resources will be considered for exemption or reduction of tax payable on the lost resources. In case tax has been paid, the tax amount paid will be refunded or deducted from the natural resources tax amount payable in the following period.

Taxpayers who suffer losses in force majeure cases will be exempt from fines due to administrative violations of tax administration. The maximum total penalty exemption amount must not exceed the value of damaged assets and goods, after deducting the insured and compensated value. Taxpayers who suffer losses in force majeure cases will be exempted from interest on late payments.

Taxpayers who are unable to submit tax returns on time due to natural disasters will be directly extended by the head of the managing tax agency.

Tax payment extension is considered based on the taxpayer's request in cases of physical damage directly affecting production and business due to force majeure. The tax payment extension period must not exceed two years from the tax payment deadline date. — VNS