Shall enterprises executing investment projects for manufacturing environmental monitoring equipment in Vietnam be exempt from tax for 4 years?

Shall enterprises executing investment projects for manufacturing environmental monitoring equipment in Vietnam be exempt from tax for 4 years?

According to Point a, Clause 1, Article 16 of Decree 218/2013/ND-CP:

Tax exemption and reduction

1. Tax exemption for 4 years, reduction of 50% of tax payable for the next 9 years for:

a) Income of enterprise from performing new investment projects is specified in Clause 1, Article 15 of this Decree;

...

Referring to Point c, Clause 1, Article 15 of Decree 218/2013/ND-CP:

Incentive tax rate

1. Incentive tax rate of 10% within 15 years applied to:

...

c) Income of enterprises from performing new investment projects in the field of environmental protection including: Production of equipment of environmental pollution treatment, environmental monitoring and analysis equipment; environmental treatment and protection; collection and treatment of wastewater, waste gas, solid waste, recycling and re-use of waste;

...

The tax incentive policies for enterprises executing investment projects for manufacturing environmental monitoring equipment in Vietnam are as follows:

- Tax exemption for 4 years, 50% reduction of 50% in the payable tax amount for the next 9 years;

- Imposition of the preferential tax rate of 10% for 15 years.

Shall enterprises executing investment projects for manufacturing environmental monitoring equipment in Vietnam be exempt from tax for 4 years? (Image from the Internet)

What does income not eligible for corporate income tax exemption in Vietnam include?

According to Clause 2, Article 19 of Decree 218/2013/ND-CP (supplemented by Clause 17, Article 1 of Decree 12/2015/ND-CP), income not eligible for corporate income tax exemption in Vietnam includes:

- Incomes from capital transfer, transfer of capital contribution right; income from real estate transfer, except for incomes from investment and business of social housing specified at Point d, Clause 2, Article 15 of Decree 218/2013/ND-CP; incomes from transfer of investment project, transfer of right to participate in investment, transfer of right to explore and mine minerals; incomes received from the business and activities outside Vietnam;

- Incomes from the search, exploration and extraction of oil, gas and other rare natural resources and incomes from the mining of minerals;

- Incomes from services business subject to excise tax under the provisions of the Law on excise tax 2008;

- Other incomes specified in Clause 2, Article 3 of Decree 218/2013/ND-CP not related to the business and production activities entitled to incentive tax ( in case of meeting the preferential conditions on fields and industries specified in Article 15 and 16 of Decree 218/2013/ND-CP);

- Concessional corporate income tax prescribed in Clause 1, Clause 4 of Article 4, Article 15, and Article 16 of Decree 218/2013/ND-CP shall not apply to incomes of enterprises from projects of investment in trading, services outside economic zones, hi-tech zones, industrial parks, and regions eligible for tax incentives.

What are the places for tax payment by enterprises in Vietnam?

According to Article 12 of Decree 218/2013/ND-CP:

 

Place of tax payment

1. Enterprises shall pay their tax at locality where their head offices are located. Where the enterprises have their production establishment of dependent accounting in provinces and centrally run cities different from locality where their their head offices are located, the amount of tax calculated shall be paid at the place of head office and place of production establishment;

The amount of income tax the enterprise shall pay in the provinces and centrally run cities where their production establishment of dependent accounting are located is determined by the amount of tax the enterprises shall pay in a period multipled (x) by the rate between the expenses incurred production establishment of dependent accounting with the enterprises’ total expenses.

The payment of tax specified in this Clause does not apply to works, works items or construction establishment of dependent accounting;

The decentralization, management and use of revenue on corporate income tax shall comply with the provisions of the Law on the State Budget.

2. The dependent accounting units or overall sector accounting enterprises having their income in addition to the main business activities shall pay tax in provinces or cities where there are those business activities;

3. The Ministry of Finance guides the place to pay tax specified in this Article;

Thus, the places for tax payment by enterprises in Vietnam are stipulated as follows:

- Enterprises shall pay their tax at locality where their head offices are located.

- Where the enterprises have their production establishment of dependent accounting in provinces and centrally run cities different from locality where their their head offices are located, the amount of tax calculated shall be paid at the place of head office and place of production establishment;

- The dependent accounting units or overall sector accounting enterprises having their income in addition to the main business activities shall pay tax in provinces or cities where there are those business activities.