On 11 January 2022, Resolution No. 43/2022/QH15 on Fiscal and Monetary Policies for Supporting Socio-economic Recovery and Development Program ("Resolution No. 43/2022") was approved by the National Assembly of the Socialist Republic of Vietnam.
The objectives of Resolution No. 43/2022 are to stimulate the rapid recovery of production activities, prioritise certain sectors, and strive to achieve these goals set out in the 2021-2025 plans: (i) maintain an average GDP growth of 6.5-7% per year, ensuring public debt levels are lower than the allowable threshold permitted under Resolution No. 23/2021/QH15; (ii) restrict the urban unemployment rate to below 4%; and (iii) maintain a stable macroeconomic environment.
A number of policies have since been implemented to support the objectives of Resolution No. 43/2022. A combination of fiscal policies targeting a reduction of Value Added Tax ("VAT") rate in 2022 from 10% to 8% (i.e., a 2% reduction) with certain exclusions have been introduced. In addition, expenses relating to donations and sponsors in support of proactive COVID-19 efforts have been allowed to be included as deductible expenses for the purpose of calculating an enterprise’s taxable income in 2022. To implement these initiatives, Decree 15/2022/ND-CP ("Decree 15/2022") prescribing tax exemption and reduction came into force on 1 February 2022. It deals with VAT reduction on goods and services currently subject to 10% VAT (Article 1), and expenses from donations that are allowed to be deducted for purposes of determining taxable income (Article 2).
For more information including the implications of this development, click here to read our Legal Update.
