Taxpayers who suffer damage due to typhoons and their aftermath are considered to have experienced material losses from natural disasters, calamities, or unexpected accidents.
Residents and businesses affected by Typhoon Yagi will receive exemptions, reductions, and extensions for corporate income tax and value-added tax (VAT), according to tax authority guidelines.
Yagi causes severe damage to northern provinces/cities in Vietnam.
Under the Tax Administration Law, taxpayers who suffer damage due to typhoons and their aftermath are considered to have experienced material losses from natural disasters, calamities, or unexpected accidents.
In a recent notice to 26 local tax departments in northern provinces, the General Department of Taxation announced that affected businesses, households, and individuals will receive VAT, special consumption tax, natural resources tax, and non-agricultural land use tax reductions or exemptions.
Specifically, businesses can include losses from natural disasters as deductible expenses when calculating taxable income. Similarly, affected households are eligible for support, but this does not exceed the equivalent of one month's average salary.
Additionally, taxpayers can receive a tax payment extension of up to two years; fines for administrative violations and late payment penalties will be waived, and deadlines for submitting documents will be extended.
Businesses producing goods subject to special consumption tax can receive a reduction of up to 30% of the tax due for this year, not exceeding the value of the assets damaged after compensation. For natural resources tax, individuals and businesses will be assessed for exemptions or reductions based on the extent of the damage. If tax has already been paid, it will be refunded or credited to the next period. For non-agricultural land use tax, a 50% reduction is available if the damage amounts to 20-50% of the taxable value.
Additionally, businesses and individuals may be eligible for a personal income tax reduction based on the extent of the damage, but not exceeding the tax due.
The General Department of Taxation has instructed local tax authorities to expedite administrative procedures for affected individuals and businesses. Authorities are also tasked with assisting taxpayers in recovering tax records, documents, and evidence to assess damage value.
Typhoon Yagi and its aftermath have affected 26 northern provinces and Thanh Hoa, which account for over 41% of the country’s GDP and 40% of the population. The storm has caused approximately VND40 trillion (US$1.62 billion) in damage, leading to a 0.15% reduction in GDP this year. Around 257,000 houses, 1,300 schools, and numerous infrastructure projects have been destroyed or damaged, with 305 levee incidents, primarily involving major levees.
In addition to tax relief, several banks have also introduced support policies, including reduced interest rates for those affected by the typhoon.
Ngoc Mai