When Are Fisheries Exploitation Activities Exempt from Corporate Income Tax?

Circular 117/2014/TT-BTC provides for the corporate income tax exemption applicable in the following cases:

- Exemption of corporate income tax for income from offshore seafood exploitation activities, income from logistics services directly serving offshore seafood exploitation activities; income from the building of new ships, upgrading fishing vessels with a main engine total capacity of 400CV or more to serve seafood exploitation activities.- Income from logistics service provision activities serving offshore seafood exploitation which is exempt from taxation includes: income from fuel and oil transportation activities; ice for seafood preservation; small repair materials for ships, fishing nets; fresh water, essential food supplies to be provided to Vietnamese fishing vessels engaged in offshore seafood exploitation.

According to Circular 117, businesses must separately account for income subject to tax exemption. In the event that separate accounting is not made, tax-exempt income shall be allocated based on the cost ratio of seafood exploitation activities, logistics services directly serving offshore seafood exploitation activities, and the building or upgrading of fishing vessels with a main engine total capacity of 400CV or more to serve seafood exploitation activities in the total cost of the entire enterprise (including management costs and sales costs) during the tax calculation period.

Notably, tax exemption does not apply to income from the liquidation of fixed assets that have been depreciated and accounted for as deductible expenses when determining taxable income (except for income from the sale of scrap and by-products related to seafood exploitation, logistics services directly serving offshore seafood exploitation, and the building or upgrading of fishing vessels with a main engine total capacity of 400CV or more to serve seafood exploitation).

View the full text of the regulations at Circular 117/2014/TT-BTC, which takes effect from August 21, 2014.

Thu Ba

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