Corporate Income Tax

Policies name Corporate Income Tax
Legislation type Other document
Issue organization Vietnam Government
Field, industry Tax - Cost - Fees
Content

(For reference only)

I. Scope of application:

1. The corporate income tax is organized production and trading goods and services taxable income (hereinafter referred to as enterprises), including:

a) enterprises established and operating under the Enterprise Law, Investment Law, the Law on Credit Institutions, Insurance Business Law, Securities Law k swap , Petroleum Law, Commercial Law and documents normative legal under the form of joint-stock companies; Limited liability company; A partnership; Private enterprise; Law Office, Notary Office Circular; The parties to business cooperation contracts; The parties to the contract division of petroleum products, oil and gas joint ventures, joint operating company.

b) Unit of public service, non-public business of producing goods and services taxable income in all fields.

c) Organization was established and operating under the Cooperative Law.

d) The enterprise was established under the provisions of foreign law (hereinafter referred to as foreign enterprises) have a permanent establishment in Vietnam.

Permanent establishments of foreign enterprises is the basis of production and business through this facility, foreign enterprises to conduct all or part of the production and trading in Vietnam, including:

- Branch, executive office, factory, factories, transport, mining, oil, gas or other place of extraction of natural resources in Vietnam;

- Place building, construction, installation or assembly;

- Facility providing services, including consultancy services through employees or organizations, other individuals;

- Agents of foreign companies;

- Representative in Vietnam in the case of the authorized representative to sign the contract in the name of foreign enterprises or representative does not have authority to conclude contracts in the name of foreign enterprises, but often make the delivery goods or provision of services in Vietnam.

Where agreements on avoidance of double taxation which the Socialist Republic of Vietnam has signed with other provisions of the permanent establishment shall comply with the provisions of that Agreement.

e) Organization and other organizations referred to in points a, b, c and d, Clause 1 of this Article production business goods or services, taxable income.

2. Organization of foreign manufacturing business in Vietnam not under the Investment Law, Business Law or income arising in Vietnam corporate income tax under the guidance of the Ministry of Finance own. These organizations if the transfer of funds shall pay enterprise income tax under the guidance of Article 14 of Chapter IV of Circular No. 78/2014 / TT-BTC dated 18/06/2014.

 

II. Taxable income:

1. Taxable income includes income from production activities, trading of goods, services and income.

2. Other income includes:

a) Income from capital transfers include income from the transfer of part or all of the capital invested in the business, including the sale of corporate, securities transfer, transfer of capital contribution and the Other forms of capital transfer in accordance with the law;

b) Income from transfer of investment income from the transfer of the right to participate in investment projects, income from transfer of exploration, mining, mineral processing as prescribed by law; Income from transfer of property under the provisions of Article 13 and Article 14 of Decree No. 218/2013 / ND-CP;

c) Income from use rights, ownership of property, including income from intellectual property rights, income from technology transfer under the provisions of law;

d) Income from the transfer, lease or liquidation of assets (excluding real estate), which contains other valuable papers;

e) Income from interest on deposits, loans, foreign currency include: Interest on deposits at credit institutions, interest on loans in any form prescribed by law, including interest paid slow rate of repayment, credit guarantee fees and other fees in the loan contract; Income from the sale of foreign currencies; Foreign exchange gains or losses from revaluation of liabilities denominated in foreign currencies last financial year; difference exchange rate in the period (separate exchange differences arising during the construction investment to fixed assets formation of new businesses established that fixed assets have not yet come into production and business activities carried out under the guidance of the Ministry of Finance). For accounts receivable, loans denominated in foreign currencies arising in the period, the difference in the exchange rate of the accounts receivable, loans are the difference between the exchange rate at the time of withdrawal debt with the exchange rate at the time of recorded accounts receivable or the original loan;

e) Amounts advanced to the cost but not used or not used up by maturity setting up businesses that are not accounted adjustment costs;

g) bad debt has now recovered deleted;

h) debt to pay creditors can not be determined;

i) The remuneration of the business from the previous year had been omitted discovered;

k) The difference between the collection of fines, damages for breach of contract due to economic or reward good performance commitments under the contract (not including fines, compensation is reduced value of the project the investment period) minus (-) the penalty clause, to pay compensation for breach of contract as provided for by law;

l) grants in cash or in kind received;

m) The difference from revaluation of assets as prescribed by law to contribute capital, transfer of the split, merger, consolidation or transformation of enterprises.

Enterprise assets are accounted for at cost assessment when determining deductible expenses specified in Article 9 of this Decree;

n) Income received from production, sales outside of Vietnam;

o) Other income, including income tax exemption provided for in Section 6, Paragraph 7 of Article 4 of Decree No. 218/2013 / ND-CP.

 

III. Taxable income earned in Vietnam of foreign enterprises defined in point c, d, Clause 2, Article 2 of the Law on corporate income tax is income received from Vietnam derived from the provision of services service, supply and distribution of goods, loans, royalties for organizations and individuals to Vietnam or to organizations and individuals doing business in Vietnam, irrespective of the place of business business.

Taxable income is defined in this paragraph does not include income from services performed outside the territory of Vietnam such as: Repair of vehicles, machinery, equipment abroad; advertising, marketing, promotion of investment and trade promotion abroad; broker selling goods and services broker to sell abroad; training abroad; divided charges postal service, international telecommunications to foreign parties.

Ministry of Finance and specific guidance on taxable income specified in this paragraph.

 

IV. Income tax exemption:

Income tax exemption shall comply with the provisions of Article 4 of the Law on corporate income tax and Paragraph 3 of Article 1 of the Law amending and supplementing a number of articles of the Law on Enterprise Income Tax.

1. Income from farming, animal husbandry, aquaculture, salt production cooperatives; income of the cooperative activities in the field of agriculture, forestry, fisheries, salt conducted in areas with economic conditions - social or geographical difficult economic conditions - especially social difficulties; business income from farming, animal husbandry, aquaculture in economic areas - especially social difficulties; income from fishing activities.

Income from farming, animal husbandry, aquaculture cooperatives and enterprises are exempt from tax under the provisions do not include income from processing and manufacturing products from farming, animal husbandry, aquaculture production. Cooperatives, enterprises must separately account income from farming, animal husbandry, aquaculture and the processing, manufacturing other to determine the number of corporate income tax exemption. Where no separate accounting, the income tax exemption is determined by the ratio of operating expenses are tax-free to the total cost of production and business establishments in the tax period.

Farming activities, livestock, aquaculture and cooperative enterprises in the province's economy - especially social difficulties and tax exemption is determined based on the level 1 code economics of the industry agriculture, forestry and fisheries regulations in the economic system of Vietnam.

Cooperative activities in the fields of agriculture, forestry, fisheries, salt cooperative response rate of supply of products and services to members as individuals, families, legal engaged in agricultural production, forestry, fisheries and salt under the provisions of the Law on Cooperatives and guidelines.

2. Income from the implementation of technical services directly serving agricultural tax exemption include: Income from services irrigation and drainage; plow, harrow the land, dredging canals and inland; Services pests, diseases of plants and animals; Services harvesting agricultural products.

3. For income from the performance of contracts for scientific research and technological development, income from the sale of products tested and the income from the production of products made from the new technology was first applied in Vietnam, the tax exemption period not exceeding 01 years from the date that the revenue from the sale of products under contract for scientific research and technological applications, production testing or production under the new technology.

4. Income from production activities, trading in goods and services of enterprises from 30% of the average worker in the years are disabled, detoxified, people with HIV / AIDS.

Business is business tax exemption is the average number of employees during the year from 20 people or more, not including businesses operating in the financial sector, real estate business.

5. Income from training activities dedicated to ethnic minorities, people with disabilities, children in especially difficult circumstances, objects of social evils, who are addiction, detoxified, the HIV / AIDS. Where vocational training institutions including other objects shall be exempt from the income tax is determined by the ratio between the number of ethnic minorities, people with disabilities, children in especially difficult circumstances, object currency social problems, who are detoxified and after detoxification, people with HIV / AIDS compared to the total number of base learners.

6. Income from operations divided capital contribution, share purchase, joint ventures and economic links with businesses in the country, after the capital contributions, issuing stock, joint venture, association have to pay tax under provisions of the Enterprise Income Tax Law, including cases where the contribution of capital, issuance of shares, joint ventures and associated tax incentives under the provisions of Chapter IV of Decree No. 218/2013 / ND CP.

7. Grants received for use in education, scientific research, culture, art, charity, humanitarian and social activities in Vietnam.

Where organizations receive funding grants used for improper purposes, they must pay corporate income tax calculated on the improper use of tax period incurred using the wrong purposes.

Organizations receiving funding provided for in this subsection is an organization established and operated in accordance with the law, comply with the provisions of the law on accounting and statistics.

8. Income from transfer of emission reductions (CERs) for the first time by now certified emission reductions; the transfer next time corporate income tax payment as prescribed.

9. Income from performing the tasks assigned by the State of Vietnam Development Bank for investment and development credits, export credit; Income from operations for poor credit and other objects of the Bank's policy of social policy; income of a limited liability company member asset management of credit institutions Vietnam; Income from operations with revenues perform duties assigned by the State of the State Finance Fund: Fund for Social Insurance of Vietnam, organized Deposit Insurance, Health Insurance Fund, the Fund supports vocational training, Fund to support employment abroad under the Ministry of Labour - Invalids and Social Affairs, the Foundation supports farmers, fund legal aid Vietnam, public telecommunications fund, investment fund local development, environmental protection funds in Vietnam, the Credit Guarantee Fund for Small and Medium Enterprise Support Fund Cooperative Development Fund support poor women, hedge-fund citizens and legal entities abroad, Housing Development Fund, the Fund development of small and medium-sized enterprises, scientific development funds and national technology, technology innovation fund countries; Income from performing the tasks assigned by the State Land Development Fund and other funds of the State operates for profit purposes by the Government, the Prime Minister decided to establish and operate in accordance with the law .

10. The undistributed income of social establishments in the field of education - education, health and other sectors of society (including the Office of judicial expertise) leave to invest Development facility under the provisions of law which specialized in education - education, health and social sectors of the other; income distribution formed undivided assets of the cooperative was established and operating under the provisions of the Law on Cooperatives.

11. Income from transfer of technology transfer priorities for organizations and individuals in areas with economic conditions - especially social difficulties.

V. tax bases

Based taxable income is taxable and tax period. Enterprises are selected according to the tax period of the calendar year or fiscal year, but must notify the tax authorities before implementation.

 

VI. Determination of taxable income

1. Taxable income for the tax period shall be determined as follows:

Taxable income

=

Taxable income

-

Income tax exemption

+

The losses carried forward as prescribed

2. Taxable income is defined as follows:

Taxable income

=

Revenue

-

Deductible expenses

+

The other income

Now there are many business taxable income from manufacturing operations, business income is the total of all business activities. In case if any business losses, the losses to be offset taxable income of the business enterprise income from self-selection. Income remaining after clearing applicable income tax rate of corporate business income also.

 

VI. Determination of loss and loss transfer

1. Loss incurred during the tax period is the difference negative (-) of taxable income excluding losses carried forward from the previous year shall be determined according to the formula prescribed.

2. Enterprises with losses may be carried forward to the following year losses, the losses are deducted from taxable income. Time is continuous switching losses not exceeding 5 years from the year following the year incurred.

3. Loss from operations of real estate transfer, assign projects, transfer of right to participate in investment projects (except for project exploration and mining) was performed after offsetting income taxable activity or compensated according to the provisions, if there are losses and losses from business operations transfer of exploration and mining losses are transferred to the next year on the taxable income of such activities, time constant loss carry no more than 5 years from the year following the year incurred.

 

VII. Revenue

1. Turnover for calculating taxable income is the total amount of sales, cash processing, service provision, including price subsidies, surcharges, additional enterprise is entitled, irrespective of collection or no money is collected.

For now declare and pay value added tax deduction method, revenue taxable corporate income tax revenue has no added value. For now declare and pay value added tax under the direct method on value, revenue increased corporate income tax calculation including value added tax.

2. The time of revenue recognition for the calculation of taxable income for the goods sold is the time of transfer of ownership or rights to use goods to the buyer.

The time for determining turnover for calculating taxable income for services is time to complete the service delivery to the buyer or time billing service providers.

3. Turnover for calculating taxable income for some cases be specified as follows:

a) For goods sold on installment payments is determined by the price paid once the goods, not including interest amortization, deferred;

b) For goods and services used for exchange, internal consumption (excluding goods and services used to continue the process of production and business enterprises) are determined by the price of products, goods or services of the same type or equivalent at the time of exchange, internal consumption;

c) For goods processing activities are proceeds of machining operations including wages, cost of fuel, power, auxiliary materials and other expenses for the processing of goods;

d) With respect to rental properties, golf course operations, business services that customers pay in advance for many years is the amount the lessee of property, purchased service contract paid periodically. If the lessee of property, the purchase of prepaid services for many years, the turnover for calculation of taxable income allocated to the five prepaid or determined by revenue paid once. Where now is the time tax incentives, the determination of tax incentives should be based on the total corporate income tax payable for the year of prepaid division (:) to collect some years ago ;

e) For credit operations, financial leasing activities are loan interest, rental income on finance receivables arising in a tax period;

e) With respect to the entire transport freight revenue passengers, cargo, baggage incurred during the tax period;

g) For electricity, clean water is the amount invoiced value added;

h) For business insurance, reinsurance receivables amount of written premiums; Free agency services (including damage assessment, consideration of compensation, require the third party reimbursement, compensation handle 100%); reinsurance costs; reinsurance commissions and other charges on insurance business minus (-) the refund or reduction of insurance, reinsurance costs, refunds or reduced reinsurance commissions.

Where insurance contracts, revenue for the calculation of taxable income is the original premium revenue is allocated in proportion to the insurance contract does not include value added tax.

For insurance contracts agreed to pay each period, revenue for the calculation of taxable income is the amount receivable arising in each period;

i) For the construction, installation is the value of the work, work items or volume of construction works, installation was commissioned.

Where the construction and installation of which the supply of materials, machinery, equipment, turnover tax calculation does not include the value of raw materials, machinery and equipment;

k) For operations in the form of business cooperation contracts without establishing a legal entity:

- Where the parties to business cooperation contracts division business results in sales of goods and services, revenue is taxable income of each party is divided according to the contract;

- Where the parties to business cooperation contracts division business results in profit after tax, the revenue to determine taxable income is the sale of goods and services contracts;

l) For the casino business, games with prizes, betting business is the proceeds from this activity, including excise tax minus (-) the amount paid bonuses to customers;

m) For securities trading revenues from brokerage services, securities trading, securities underwriting, securities investment consulting, investment fund management, fund certificate issuance, service organize markets and securities services as prescribed by law;

n) For search operations, exploration and exploitation of oil and gas is the total sales of oil and gas contract in a fair transaction tax period;

o) For derivative financial services as the proceeds from the provision of financial services derivative made in the tax period;

 

VIII. The expenses are deducted and not be deducted when determining the taxable income

1. Unless specified expenses, business expenses are deducted if any meet the following conditions:

a) actual expenses incurred in relation to production, sales of businesses .

b) Expenses have enough bills, vouchers as prescribed by law.

c) For every purchase goods and services from each worth twenty million or more must have documents of non-cash payment.

2. Expenses not be deducted when determining the taxable income shall comply with the provisions of Clause 2, Article 9 of the Law on corporate income tax and Paragraph 5 of Article 1 of the Law amending and supplementing a number of articles of the Law on Income Tax now, some cases of non-deductible expenses are defined as follows:

a) Expenses not meet the conditions specified, unless the value of the damage caused by natural disasters, epidemics, fire and other cases of force majeure without compensation.

The value of losses due to natural disasters, epidemics, fires and other unforeseen circumstances no compensation is determined by the total value of losses minus (-) the value of an insurer or organizations others must pay compensation in accordance with law;

b) The cost of business management by foreign enterprises allocated to a permanent establishment in Vietnam exceeded calculated by the following formula:

The cost of business management, the company overseas allocated to a permanent establishment in Vietnam during the tax period

=

The taxable turnover of a permanent establishment in Vietnam in the tax period

x

Total cost management business in foreign companies in the tax period.

Total income of the company abroad, including sales of the permanent establishment in the other countries in the tax period

c) The excess expenditure under the provisions of law provisions;

d) The depreciation of fixed assets is not stipulated by the Ministry of Finance .

e) The cost accruals to not comply with the provisions of law.

p) The expenses of business: banking, insurance, lottery, stock and some special operations as prescribed by the Ministry of Finance;

q) Cash late payment in accordance with the provisions of the Law on Tax Administration;

 

IX. Tax rate:

1. The rate of corporate income tax is 22%, except for enterprises subject to 20% tax rate and the tax rate from 32% to 50% of the specified object and tax incentives under the provisions .

As of 01 May 01 2016, the case subject to 22% tax rate specified in this paragraph tax rate of 20%.

2. Enterprises established and operating under the provisions of the law of Vietnam, including cooperatives, business units engaged in production and trading of goods and services with a total turnover of 20 billion years Council tax rate is 20%.

Total revenue for the year as a basis for businesses eligible for the tax rate of 20% specified in this paragraph is the total sales of goods and services provided by businesses of the preceding year.

3. The rate of corporate income tax for search operations, exploration and exploitation of oil and gas and other precious resources in Vietnam from 32% to 50%. For search operations, exploration and exploitation of oil and gas, based on the location, condition and volume of petroleum exploitation, the Prime Minister decided to specific tax rates to suit each project, each body business at the request of the Minister of Finance. For the platinum mining resources, gold, silver, tin, wonfram, antimony, gems, rare earth tax rate is 50%, in the case of mines with 70% or more of allocated land in areas with socio-economic conditions particularly difficult in the list of localities preferential enterprise income tax attached to this Decree shall be subject to corporate income tax rate is 40%.

 

X. Tax calculation method

1. The corporate income tax payable for the tax period's taxable income (x) the tax rate; cases now have to pay income tax on income generated abroad shall be deducted from income tax has been paid, but not exceeding the amount of tax payable enterprise prescribed by the Income Tax Act now.

2. The corporate income tax payable for the transfer of property by transferring income from private property (x) at the rate of 22%, from 01 January 01, 2016 the tax rate is 20% .

3. For now defined at point c, d, Clause 2, Article 2 of the Law on corporate income tax, corporate income tax payable shall be prorated% on sales of goods and services in Vietnam Men, as follows:

a) Services: 5%, separately managed service restaurants, hotels, casinos: 10%; cases providing services associated with goods, commodities are 1%; case can not be separated value of the goods to the value of 2% service;

b) Supply and distribution of goods in Vietnam in the form of import and export in place or under the terms of international trade (Incoterms) is 1%;

c) royalties of 10%;

d) Rental of aircraft (including engine leasing, aircraft spare parts), Ship of 2%;

e) Rent rig, machinery, equipment, vehicles (except for the provisions in this paragraph Point d) is 5%;

e) The interest shall be 5%;

g) Transfer of securities, foreign reinsurance is 0.1%;

h) Derivative financial services is 2%;

i) Construction, transportation and other activities is 2%.

 

XI. Tax incentives:

1. Tax preferential 10% within 15 years for:

a) The income of enterprises from implementing new investment projects in the areas of economic conditions - especially social problems defined in the Appendix attached to Decree No. 218/2013 / ND-CP, economic zones, high-tech areas, including information technology area focus was established by decision of the Prime Minister;

b) The income of enterprises from implementing new investment projects in the following fields: Scientific research and technological development; High-tech applications in the list of high-tech investment and development priorities in accordance with the Law on high technology; High-tech incubators, business incubators tech; venture capital for high-tech development in the list of high-tech development priorities in accordance with the law of the high-tech; construction investment - business incubators high-tech business incubators tech; investment in the development of water plants, power plants, water supply and drainage systems; bridges, roads and railways; airports, seaports, river ports; airports, railway stations and infrastructure projects particularly important due to the Prime Minister for decision; production of software products; production of composite materials, construction materials, light, rare materials; production of renewable energy, clean energy, energy from waste incineration; development of biotechnology.

c) income from business carried out new investment projects in the field of environmental protection, including: manufacturing equipment handling environmental pollution, monitoring equipment and environmental analysis; pollution treatment and environmental protection; collection and treatment of waste water, waste gas, solid waste; recycling and reuse of waste;

d) high-tech enterprises, agricultural enterprises tech applications.

e) income from business carried out new investment projects in the manufacturing sector (excluding projects produced goods subject to excise tax, the mining project) meets one of the following criteria :

- Project scale minimum investment of 6 trillion disbursed no later than 3 years after the investment is licensed and has minimum total revenue reached 10 trillion / year later than 3 year from revenue.

- Project scale minimum investment of 6 trillion disbursed no later than 3 years after the investment is licensed and used over 3,000 employees within the first 3 years from revenue .

Number of employees specified in point is the number of employees has signed a contract employee working full time, excluding part-time workers and contract workers under 01 year term.

2. Apply the 10% tax rate on incomes below:

a) The income of enterprises from implementing social activities in the field of education - education, vocational training, health, culture, sports and the environment.

b) Income from operations Publishing Publisher accordance with the provisions of Law Publishing;

c) Income from operations reported in (including advertising in print) of a press agency under the provisions of the Press Law;

d) The income of the business from the implementation of investment projects - the social housing business for sale, lease, hire purchase for the objects specified in Article 53 of the Housing Act.

e) Income from business: planting, care and protection; farming agriculture, forestry and fisheries in economic areas - social difficulties; manufacturing, human resources and breeding of plants and animals; manufacturing, mining and production of refined salt salt unless prescribed; investment to preserve agricultural harvest, preservation of agricultural, fisheries and food;

e) The income of the cooperative activities in the field of agriculture, forestry, fisheries, salt not in the economic - social problems and economic areas - especially social difficulties.

3. The tax rate of 20% in ten years time applies to:

a) The income of enterprises from implementing new investment projects in the areas of economic conditions - social difficulties;

b) The income of enterprises from implementing new investment projects: Production of high-grade steel; producing energy-saving products; manufacturing machinery and equipment for agriculture, forestry, fishery and salt; production and irrigation equipment; production, refining animal feed, poultry, seafood; development of traditional industries.

Enterprise implementation of new investment projects in the field of geographical tax incentives prescribed at Points a, b of this Clause 01 from 01 January 2016 the tax rate of 17%.

4. 20% tax rate on people's credit funds and micro-finance institutions and 01 from 01 months in 2016 the tax rate is 17%.

6. Time preferential tax rate prescribed by the continuity from the first year of business with revenues from new investment projects; for high-tech enterprises, agricultural enterprises tech applications shall be the date is recognized as high-tech enterprises, agricultural enterprises tech applications; projects for high-tech applications is calculated from the date of certification projects high-tech applications.

 

XII. Tax exemption or reduction

1. Exemption 4 years, 50% of the tax payable in the next 9 years for:

a) The income of enterprises from implementing new investment projects according to regulations;

b) The income of enterprises from implementing new investment projects in the areas of socialization implemented in areas with economic conditions - social difficult or extremely difficult prescribed.

2. Exemption 4 years, 50% of the tax payable in the next 5 years for corporate earnings from implementing new investment projects in the field of social mobilization in areas not on the list of areas with economic conditions - social difficult or extremely difficult prescribed.

3. Exemption 2 years and 50% of the tax payable in the next 4 years on income from investment projects implemented new rules of business and income from the implementation of new investment projects in the industry (except industrial park located in conditions - economic and social advantages).

Areas with conditions - social and economic advantages stipulated that the urban districts of special grade municipality directly under the central type I and grade I provincially; case of industrial parks located across geographical areas and areas favorable to unfavorable, the determination of tax incentives for industrial bases in areas with industrial area larger. The identification of special grade, type I specified in this paragraph shall comply with the Government's regulations on urban classification.

4. Time for tax exemption or reduction provided for in this Article shall be continuous from the first year of taxable income from the investment of new tax incentives, the absence of taxable income in three years first, since the first year of revenue from new investment projects, the period of tax exemption or reduction is calculated from the fourth year. Time for tax exemption or reduction for high-tech enterprises, agricultural enterprises tech applications from the time they are recognized as high-tech enterprises, agricultural enterprises tech applications.

Where, in the first tax period that the new investment projects of enterprises engaged in production time, business tax exemption or reduction of less than 12 (twelve) months, the selected business tax exemption reduction for new investment projects that tax period or immediately register with the tax authorities start time tax exemption or reduction from the next tax period.

5. Enterprises with investment projects development projects active in the field of geographical preferential enterprise income tax under the provisions expanding the scale of production, improve productivity, technological innovation production if they meet one of three criteria, shall be selected tax incentives under the project is active for the remaining time (if any) or tax exemption or reduction for the income tax increase by expanding investment brings. Time for tax exemption or reduction of income due to increased investment in expanding prescribed by the time the tax exemption or reduction applies to new investment projects in the same area, the field of tax incentives business income.

The investment project to expand prescribed must meet one of the following criteria:

- Cost of fixed assets increased when completed investment projects in operation at least 20 billion for investment projects in the fields extend preferential enterprise income tax as prescribed or 10 billion for the expansion of investment projects carried out in areas with economic conditions - social difficult or extremely difficult under the provisions of the law on corporate income tax;

- The proportion of original cost of fixed assets increased by at least 20% of the total original cost of fixed assets before investing;

- Design capacity increased by at least 20% of design capacity before investing.

Where businesses are investing activities upgrade, replace, technological innovation of the project is active in the fields and areas under the provisions of tax incentives that do not meet one of three criteria shall, tax incentives comply with the active project for the remaining time (if any).

Where businesses tax incentives select entrants to invest in expanding the share of income increased due to expanded investment is accounted for separately; absence of separate accounting, the income from investing activities extend determined by the ratio between the original cost of fixed assets investment was put into use for the production and trading of the total original cost of fixed assets of the business.

Time for tax exemption or reduction under the provisions are in expansion projects completed and put into production, sales income; the absence of taxable income in the first three years, since the first year revenue from investment projects to expand the tax holidays, tax reduction is calculated from the fourth year.

Tax incentives under the provisions do not apply to the case of investment expanded by merging or acquiring businesses or projects are operating.

 

XIII. Reduction for other cases

1. An enterprise manufacturing, construction, transport use from 10 to 100 women workers, including laborers and women account for over 50% of all workers have regular or frequent use over 100 women workers the number of female workers accounted for over 30% of the total workforce of the business often reduced corporate income tax by an additional number of women employees, including:

a) Expenses for re-training;

b) Salaries and allowances (if any) to the teacher at the nursery, kindergarten by business organization and management;

c) Read more in health care;

d) Allowances for female workers after childbirth. Pursuant to the provisions of labor law, the Ministry of Finance in collaboration with the Ministry of Labour - Invalids and Social Affairs shall specify the allowances specified in this paragraph;

e) The salary and allowances payable to time female workers leave after childbirth, maternity leave under the regime but still working.

2. Enterprise employer ethnic minorities are reduced corporate income tax by an additional number of workers from ethnic minorities to job training, housing assistance funds, social insurance , health insurance for ethnic minorities in the case has not been supported by the State in accordance with regulations.

3. Do you now perform technology transfer in the field of transfer priority for organizations and individuals in the area of economic conditions - social difficulties, 50% of corporate income tax calculated on the income from technology transfer.

 

XIV. Conditions apply preferential enterprise income tax

1. Enterprises have separate accounting of income from manufacturing operations, business preferential enterprise income tax (including preferential tax rates or tax exemption or reduction); case revenues or expenses can not be deducted separately account the revenues or expenses that are deducted determined by the ratio between the cost or revenue minus production activities, business deals tax relief on the total deductible expenses or revenues of the business.

2. Do not apply preferential enterprise income tax for incomes below:

a) Income from capital transfer, transfer of capital contribution; Income from transfer of property, excluding income from business investment in social housing regulation th eo; Income from transfer of investment projects, transfer of participating projects, transfer of exploration and mining; Income received from manufacturing operations, business outside of Vietnam;

b) Income from operations search, exploration and exploitation of oil, gas, and other scarce resources income from mining activities;

c) Income from business services subject to excise tax under the provisions of the Law on excise duty;

d) Other income under the provisions unrelated to the activities of production and business tax incentives.

3. In the same time, if now enjoy more preferential tax rates vary for the same income, enterprises are choosing to apply the most favorable tax incentives.

4. During the preferential enterprise income tax, if the tax year but now does not satisfy one of the conditions of tax incentives specified in paragraph 7, 8 and Clause 12, Article 1 of the Law on amendments and supplementing a number of articles of the Law on corporate income tax, the tax year are not entitled to tax incentives that have to pay tax at the rate of 22% and now has a total turnover of 20 billion years prescribed payment of the tax rate of 20%. As of 01 January 2016 01 common tax rate is 20%.

For investment projects, case after 03 years since it was licensed investment (excluding be delayed due to objective reasons in the stage of clearance and settlement of administrative procedures of state agencies or by natural disaster, fire agency investment certificate approval, reporting to the Prime Minister for approval) or fourth year in revenue from the project's investment business does not meet the conditions are not entitled to preferential corporate income tax, and now have to declare and pay the amount of corporate income tax was declared preferences of the previous year (if applicable) in accordance with the law and are not considered wrong declaration in accordance with the law on tax administration. During the preferential enterprise income tax, if any taxable year but now does not satisfy one of the conditions in which tax incentives are now no preferential enterprise income tax.

5. The new investment tax incentives project is done first or independent investment projects are carried out, except in the following cases:

a) Investment projects created from the split, merger, consolidation or transformation of enterprises in accordance with law;

b) investment project formed from the conversion of the owner (including the cases where new investment projects but still inherit property, business location, business lines of business to old continuous production business).

New investment projects are entitled to tax under the provisions of state agencies have been authorized to issue investment licenses or certificates of investment. In case of investment projects in the country have invested less than 15 billion Vietnam and not in the list of investment field conditions associated with the establishment of new businesses, the records to identify investment projects is certificate of business registration.

Related documents:

  • Enterprise Income Tax Law No. 14/2008 / QH12 dated 03/6/2008
  • Law amending and supplementing a number of articles of the Law on Corporate Income Tax 32/2013 / QH13 dated 06/19/20 13
  • Decree No.   218/2013 / ND-CP   of the Government dated 12.26.2013. (Detailed regulations and guidelines for implementation of some articles of the Law on Corporate Income Tax)
  • Circular No.   78/2014 / TT-BTC   dated 18/06/2014 of the Ministry of Finance. (Guide Decree No. 218/2013 / ND-CP guiding the implementation of the CIT Law).