Tax and Finance Newsletter – June 2024

ACAC – Tax and Finance Newsletter, June 2024

30% Increase in the Statutory Base Salary from 1 July 2024, Together with a Series of Tax Deferral Policies Supporting Enterprises

At Anh Consulting and Auditing Co., Ltd. (ACAC), we place strong emphasis on keeping pace with regulatory developments and providing accurate professional knowledge to help businesses make effective financial decisions, remain compliant, and adapt flexibly in a changing policy environment.

June 2024 was a month with several wide-reaching policy developments: the Government issued a series of decrees deferring the deadlines for payment of taxes and land rental, while the Politburo concluded on a 30% increase to the statutory base salary effective from 1 July 2024 — a change that every enterprise must promptly factor into its payroll, social insurance, and related salary-based contribution calculations. ACAC’s June 2024 newsletter summarizes the most notable updates to help enterprises stay informed and adjust accordingly in a timely manner.

Tax Policy Guidance and Updates

Value-Added Tax (VAT) and Other Deferred Taxes

On 17 June 2024, the Government issued Decree No. 64/2024/ND-CP deferring the deadlines for payment of VAT, CIT, PIT, and land rental in 2024. Specifically: VAT for tax periods from May to September 2024 (or for Q2 and Q3 2024) is deferred by between 2 and 5 months depending on the period; provisionally paid CIT for Q2 2024 is deferred by 3 months; VAT and PIT arising in 2024 for business households and business individuals is deferred to no later than 30 December 2024; and 50% of the land rental payable for the second instalment of 2024 is deferred by a further 2 months from 31 October 2024. Enterprises eligible for deferral must still declare and file their tax returns on time as required; only the payment of the tax amount arising during the deferral period is deferred. In addition, Official Letter No. 2452/TCT-CS notes that where a foreign-invested enterprise leasing land under a lump-sum payment arrangement transfers the land use right and the assets attached to the land to an export-processing enterprise, this transaction is only eligible for the 0% VAT rate if the tax authority determines that, in substance, it constitutes a sub-leasing of the land use right in accordance with the Land Law, and the conditions relating to the contract, invoices, and bank payment documentation are fully satisfied. Official Letter No. 2502/TCT-DNL also provides specific guidance on how to make a supplementary declaration and carry forward unrefunded input VAT of a petroleum investment project into the production and business phase, for offset against the tax payable.

Corporate Income Tax (CIT)

Under Official Letter No. 2326/TCT-CS on CIT incentives for supporting industry products, an enterprise eligible for multiple different incentive levels may elect to apply whichever is most favorable. However, if an enterprise elects to receive the incentive applicable under the conditions for manufacturing supporting industry products (from the date it is issued an incentive certification by the Ministry of Industry and Trade), income from products not on the list of supporting industry products will no longer continue to enjoy the incentive previously applicable under the conditions for a new investment project in an industrial zone — enterprises should carefully consider this before making an election, in order to optimize their overall tax benefit.

Other Taxes

Official Letter No. 2589/TCT-CS notes, regarding the land rental reduction policy under Decision No. 25/2023/QD-TTg, that it applies only to the entities named on the Decision, the Land Lease Contract, or the Certificate of Land Use Right; applications for reduction submitted after 31 March 2024 will not be considered. Notably, on 17 June 2024 the Government issued Decree No. 65/2024/ND-CP deferring the deadline for payment of special consumption tax on domestically manufactured or assembled automobiles: the tax amount arising for tax periods from May to September 2024 is deferred to no later than 20 November 2024. The policy also applies to branches or dependent units engaged in automobile manufacturing or assembly that declare separately with their directly managing tax authority; branches without such activity are not eligible for the deferral.

Increase in the Statutory Base Salary, Regional Minimum Wage, and Pensions from 1 July 2024

On 21 June 2024, the Politburo issued Conclusion No. 83-KL/TW on salary reform and the adjustment of pensions and allowances, applicable from 1 July 2024. The main adjustments are: the statutory base salary increases from VND 1.8 million to VND 2.34 million (a 30% increase); the regional minimum wage increases by 6% compared to 2023; pensions and social insurance allowances increase by 15% (with a protective floor for persons who began receiving their pension before 1995); the preferential allowance for persons with meritorious service increases by 35.7% (from VND 2,055,000 to VND 2,789,000 per month); and the social allowance increases by 38.9% (from VND 360,000 to VND 500,000 per month). For state-owned enterprises specifically, salary reform under Resolution No. 27-NQ/TW will apply from 1 January 2025, to align with the enterprise financial year. This is a change with a direct impact on personnel costs, compulsory social insurance contribution levels, and related salary-based contributions — enterprises should promptly review and update their payroll systems before 1 July 2024.

Tightened Management of E-Commerce Taxation and Tax Debt Enforcement

On 4 June 2024, the General Department of Taxation issued Official Telegram No. 01/CD-TCT requesting provincial and municipal Tax Departments to comprehensively review and inspect the declaration, payment of tax, and use of e-invoices by organizations and individuals engaged in e-commerce, trading on e-commerce platforms, affiliate marketing, the provision of digital content, and, in particular, online business and livestream sales activities. The Official Telegram also requires the rollout, from 1 August 2024, of e-invoices generated from cash registers for golf courses and related service providers. On debt collection, Official Letter No. 2633/TCT-QLN clarifies the responsibility of commercial banks to provide taxpayer account information and to implement enforcement decisions to deduct funds from accounts: a bank that fails to make the deduction and transfer required under an enforcement decision within its period of validity will be subject to a penalty corresponding to the amount not deducted and transferred.

Transparency – Updates – Partnership

Through its monthly newsletter, ACAC aims not only to deliver authoritative information but also to help enterprises understand the practical impact of policy changes, enabling them to proactively adjust their financial strategies and risk management.

We believe that transparency, professional rigor, and timely updates form the foundation for the sustainable growth of Vietnam’s business community in this era of global integration.

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