Tax exemption and reduction of corporate income tax are prescribed and guided in Law No. 32/2013/QH13 amending and supplementing the Law on corporate income tax as follows:
1. Tax exemption for 4 years, 50% reduction of payable tax for the next 9 years for:
a) Incomes of enterprises from the implementation of new investment projects specified in Clause 1, Article 15 of this Decree;
b) Incomes of enterprises from implementing new investment projects in the field of socialization implemented in geographical areas with difficult or extremely difficult socio-economic conditions specified in the attached Appendix. this Decree.
2. Tax exemption for 4 years, 50% reduction of payable tax for the next 5 years:
Tax exemption for 4 years, 50% reduction of payable tax for the next 5 years for enterprises’ incomes from implementing new investment projects in the field of socialization in localities not on the list of conditional geographical areas socio-economic difficulties or extreme difficulties specified in the Appendix issued together with this Decree.
3. Tax exemption for 2 years and 50% reduction of payable tax for the next 4 years:
Tax exemption for 2 years and reduction of 50% of payable tax for the next 4 years for incomes from the implementation of new investment projects specified in Clause 3, Article 15 of this Decree and incomes of enterprises from project implementation new investment in industrial parks (except for industrial parks located in areas with favorable socio-economic conditions).
Areas with favorable socio-economic conditions specified in this Clause are urban districts of special-class cities, grade-I cities directly under the central government, and grade-I cities directly under the province; in case the industrial park is located in both favorable and unfavorable areas, the determination of tax incentives for industrial parks shall be based on the area with a larger area of the industrial park. The determination of special-class and grade-I cities specified in this Clause shall comply with the Government’s regulations on urban classification.
4. Tax exemption and reduction period:
The tax exemption and reduction period specified in this Article shall be calculated continuously from the first year of having taxable income from the new investment project entitled to tax incentives, in case there is no taxable income for the first three years, From the first year there is revenue from the new investment project, the tax exemption or reduction period is counted from the fourth year. The tax exemption and reduction period for hi-tech enterprises and hi-tech agricultural enterprises specified in Clause 1 of this Article is counted from the time of being recognized as hi-tech enterprises or applied agricultural enterprises. high technology.
In case, in the first tax period that the enterprise’s new investment project has a period of production and business activities eligible for tax exemption or reduction of less than 12 (twelve) months, the enterprise may choose to enjoy tax exemption. , tax reduction for new investment projects right in that tax period or register with tax authorities the time to start tax exemption or reduction from the next tax period.
5. Enterprises with investment projects to develop investment projects
Enterprises with investment projects to develop investment projects are operating in the fields and areas eligible for corporate income tax incentives under this Decree to expand production scale, increase capacity, and innovate. If a production technology meets one of the three criteria specified in this Clause, it may choose to enjoy tax incentives according to the project in operation for the remaining time (if any) or be exempted from or reduced tax on the part of the production technology. additional income generated by expansion investment. The tax exemption or reduction period for additional income due to investment expansion specified in this Clause is equal to the tax exemption or reduction period applicable to new investment projects in the same geographical area or incentive sector. Corporate income tax.
The expansion investment project specified in this Clause must satisfy one of the following criteria:
- The additional historical cost of fixed assets when the investment project is completed and put into operation reaches a minimum of 20 billion VND, for an expansion investment project in the field eligible for corporate income tax incentives under the provisions of law. This Decree or from VND 10 billion for expansion investment projects implemented in areas with difficult or extremely difficult socio-economic conditions in accordance with the law on corporate income tax;
- The proportion of the cost of fixed assets increased by at least 20% compared to the total cost of fixed assets before investment;
- Design capacity increased by at least 20% compared to the designed capacity before investment.
In case an operating enterprise invests in upgrading, replacing or renovating the technology of an operating project in the fields or geographical areas eligible for tax incentives under the provisions of this Decree but fails to meet one of the three criteria: For the purposes specified in this Point, the tax incentives shall be applied according to the projects in operation for the remaining time (if any).
In case an enterprise chooses to enjoy tax incentives under the expanded investment category, the additional income resulting from the expansion investment shall be accounted separately; In case it is not possible to do separate accounting, the income from expansion investment activities is determined according to the ratio between the historical cost of fixed assets newly invested and put into use for production and business to the total cost of fixed assets of the enterprise.
The tax exemption or reduction period specified in this Clause is counted from the year the expansion investment project is completed and put into production and business with income; in case there is no taxable income in the first three years, from the first year of revenue from the expansion investment project, the tax exemption or reduction period is counted from the fourth year.
Tax incentives specified in this Clause do not apply to cases of investment expansion due to mergers, acquisitions of enterprises or investment projects in operation.
Tax reduction for other cases
1. Manufacturing, construction and transportation enterprises employ from 10 to 100 female employees, of which female employees account for more than 50% of the total number of employees who are regularly present or employ more than 100 female employees on a regular basis. in which the number of female employees accounting for more than 30% of the total number of employees regularly present of the enterprise is entitled to a reduction in corporate income tax equal to the additional expenditure for female employees, including:
- Expenses for vocational retraining;
- Cost of salaries and allowances (if any) for teachers who teach at kindergartens and kindergartens organized and managed by enterprises;
- Expenses for additional medical examination during the year;
- Expenses for allowances for female employees after giving birth. Pursuant to the provisions of the law on labor, the Ministry of Finance shall coordinate with the Ministry of Labor, War Invalids and Social Affairs in specifying the level of allowances specified in this Clause;
- Wages and allowances for the time when female employees are entitled to take leave after childbirth or breastfeeding according to the regime but still work.
2. Enterprises employing ethnic minorities are entitled to a reduction in corporate income tax equal to the additional expenditure on ethnic minority employees for vocational training, housing support, and social insurance. , health insurance for ethnic minorities in case they have not been supported by the State according to the prescribed regime.
3. Enterprises that transfer technology in the fields of priority transfer to organizations and individuals in geographical areas with difficult socio-economic conditions are entitled to a 50% reduction in corporate income tax on the portion of the enterprise income tax. income from technology transfer.
