General incentive policies (Pursuant to the Amended Law on the Corporate Income Tax No 32/2013/QH13 dated 19 June 2013, came into effect from 1st January 2014, Decree No. 218/2013/ND-CP dated 26th December, 2013 detailed regulating and guiding to implement some articles of Law on Corporate income Tax).
- Projects are not listed in the incentives field: corporation income tax rate is 22 % applied from 1st January 2014 to 31st December 2015 and after that shall be 20 % applied from 1st January 2016 to the expired date of the project and the project shall not be exempted or reduced income tax.
- Enterprises having a total annual turnovers but not exceeding VND 20 billion shall enjoy the income tax rate of 20 %.
I. Tax exemption
1. The corporate income tax rate is 10% for 15 years, the project is exempt from income tax within 04 years since the taxable income and reduce 50% of payable tax amount within the next 9 years, including:
Enterprise’s income from implementing new projects in the fields of: science and technology development; apply high – tech ( named in the high – tech lists to be given priority as regulated in the Law on high technology); incubating high – tech businesses; high risk investment for high – tech development (named in the high – tech lists to be given priority as regulated in the Law on high technology); invest in developing water supply plant, power plant, waste drainage system; bridge, transportation roads and railways; airport, seaport and river-port; airport station, railway station and other particular important infrastucture decided by Prime Minister; production of software products, composite materials; lightweight building materials, rare materials, renewable energy, clean energy, energy from waste disposal; development of biotechnology.
Project on producing software products is in the list of software products and satisfy the process of producing software as regulated by Law.
- Enterprise’s revenue from implementing new project in the field of environment protection, including: producing environment polluted settling equipment; monitoring and environment analysis equipment; polluted treatment and environment protection; collect, waste water treatment, solid wastes, recycle materials, re-use waste materials.
- High - technology enterprises, agriculture enterprises apply high – technology.
(Note: For projects belongs to incentive fields above has large scale and high or new technology or need to particularly attract, the time apply incentive tax rate can be prolonged but the total time apply the rate of 10% is not exceed 30 years)
New projects in the field of manufacturing sector (except projects producing products that enjoy the particular consumption tax rate and projects of exploiting mineral sources) satisfy one of two criteria as follow:
+ Project which has investment capital of minimum VND 6 trillion, capital disbursement does not exceed 3 years from the date of issuance Investment Certificate and has minimum revenue of VND 10 trillion per year, at least after 3 year since the year of earning revenue;
+ Project which has minimum investment capital of VND 6 trillion, capital disbursement does not exceed 3 years from the date of issuance Investment Certificate and using over 3000 workers.
The number of workers are full – time workers, not including part – time workers and short-term contract workers (under 10 years).
2. Apply the tax level of 10% to some income articles:
- Enterprise’s revenue from implementing socialization activities in the fields of education and training, vocational training, health, cultural, sport and environment.
(The list of patterns, criteria, scales and standards of enterprise which implementing socialization activities regulated by Prime Minister)
- Enterprise’s revenue from implementing the project on social housing investment for sale, rent, lease purchase applied to the objects defined in article 53 of Law on housing.
Social house are constructed by State, Corporate or individual from all economic sectors and satisfy all criterias on staying, selling price, renting price, lease purchasing price, objects; buying, renting and lease purchasing conditions as regulated by Law on housing and the application of tax level of 10% is not depend on time of signing selling, renting or lease purchasing contract.
3. The corporate income tax is 20% in 10 years, the project is exempt from income tax in 02 years since the date of taxable income and reducing 50% in the next 04 years (From 1st January 2016, such tax rate shall be 17%) to be applied to new projects including: producing of high – grade steel, energy saving products, machinery and equipment for agriculture, forestry, fisheries and salt production; irrigation equipment, food for poultry, cattle, aquaculture; developing traditional industries;
The time apply incentive tax rate is counted from the first year enterprise get revenues from its new project; for high – tech enterprises, agriculture enterprises applied high – tech, the time apply incentive tax is counted from the date of being recognized as high – tech enterprises; for project which applied high – tech, the time apply incentive tax is counted from the date of issuance Certificate of high-tech appliance.
4. Exempt corporate income tax within 04 years and reduce 50% of payable tax amount within the next 9 years for:
Enterprises which project in the fields of enjoying incentive corporate income tax as regulated in the amended Law on Corporate income Tax, and now expand its production scale, enhance productivity, renew production technology will enjoy incentive tax as the remain time of the existing project (if any) or enjoy tax exemption, tax reduction for additional income due to expanding investment if satisfy one of three criteria below (Tax exemption and reduction time for additional income due to expanding the project equal to the time applied to new project in the same location and priority fields):
+ The original price of fixed assets increased when the project come into operation from at least VND 20 billion for the expanding projects in the fields of enjoying incentive corporate income tax as regulated in the amended Law on Corporate income tax.
+ The density of original price of fixed assets have to increase from at least 20% compare to the total original price of fixed assets before implementation of investment.
+ The design capacity have to increase from at least 20% compare to the previous before implementation of investment.
In case the enterprise is operating when expansion is made in the field of enjoying incentive tax, but does not satisfy one of three criteria above will enjoy the incentive tax level as the remaining duration of the existing project (if any)
The tax exemption or reduction time is being applied from the year of expansion project come into production and gain revenue; in case there is no payable tax in the 3 beginning years, since the first year gaining revenue from expanding project then the tax exemption or reduction time is being applied the fourth year.
II. Tax reduction:
Production, construction and transportation Enterprise using from 10 to 100 female workers, and the number of female workers account for over 50% of total regular workers or regular using over 100 female workers and the number of female workers accounted for over 30% of total enterprise’s regular workers will be reduced corporate income tax as equal to additional costs for female workers, including: career training, healthcare, feeding – up allowances for female workers after giving birth; salary and allowances for the time female workers stop working after giving birth.