What are tasks and solutions to stimulate economic growth of Vietnam under Resolution 158? What are regulations on CIT incentive policy applied for investment projects in areas with difficult socio-economic conditions in Vietnam?

What are tasks and solutions to stimulate economic growth of Vietnam under Resolution 158?

On November 12, 2024, the National Assembly passed Resolution 158/2024/QH15... Download on the socio-economic development plan for 2025.

Based on point 3.2, Article 3 of Resolution 158/2024/QH15... Download, the tasks and solutions to stimulate economic growth are stipulated as follows:

- Continue to conduct a proactive, flexible, prompt, effective, synchronized, and harmonious monetary policy that is tightly integrated with a reasonably expansive fiscal policy, focusing on priorities along with other policies.

- Implement strong, decisive, and prompt solutions to dismantle institutional obstacles, quickly rectify bottlenecks to accelerate the disbursement of public investment funds right from the beginning of 2025, especially for national important projects, key works, and national target programs. Increase decentralization and delegation, enhance the accountability of leaders in decision-making on investment policies and projects, ensuring a focus on priorities and avoiding dispersion and fragmentation. Withdraw projects not implemented according to approved plans, firmly cut and remove any unnecessary, inefficient projects. Among these, prioritize allocating resources from both central and local government budgets to implement projects connecting provinces, regions, and national and international connections, especially those linking economic hubs and localities that are growth poles. Localities should actively balance their resources to invest in regional connection projects within the province's scope under the spirit "local decision, local implementation, local responsibility."

- Continue to innovate traditional growth drivers (investment, consumption, export), strongly promote new growth drivers (digital economy, green economy, circular economy, knowledge economy, sharing economy, and nighttime economy...).

- Strengthen financial discipline and fiscal management; strictly manage state budget revenue, ensuring correct, sufficient, and prompt collection; rigorously save expenses, particularly recurrent expenditures, to increase investment in strategic infrastructure development; control budget deficits and public debt within safe, reasonable limits while studying and considering utilizing the room for public debt and deficits to mobilize additional resources for development.

- Strongly develop the domestic market, promote exports, and continue to reduce logistics costs through strategic infrastructure improvement.

- Intensify trade promotion, expand and diversify supply chains, production chains, and export/import markets aligned with enhancing product quality, engage more deeply and broadly in regional and global supply chains; effectively exploit new markets, Halal markets, striving for sustainable trade surplus.

See more at Resolution 158/2024/QH15... Download

What are tasks and solutions to stimulate economic growth of Vietnam under Resolution 158? (Image from the Internet)

What are regulations on CIT incentive policy applied for investment projects in areas with difficult socio-economic conditions in Vietnam?

According to clause 4, Article 19 of Circular 78/2014/TT-BTC, regulations are as follows:

Preferential Tax Rates

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4. A preferential tax rate of 20% for a period of ten (10) years applies to:

a) Income from enterprises implementing new investment projects in areas with difficult socio-economic conditions as specified in the Appendix issued with Decree No. 218/2013/ND-CP of the Government of Vietnam.

b) Income from enterprises implementing new investment projects: production of high-grade steel; production of energy-saving products; manufacturing of machinery and equipment for agricultural, forestry, fishery, and salt production; manufacturing of irrigation equipment; production and refinement of feeds for livestock, poultry, and aquatic animals; development of traditional trades (including building and developing traditional craft industries, processing agricultural food products, cultural products).

Enterprises implementing new investment projects in the preferential tax fields and areas stipulated in this clause from January 1, 2016, shall apply a tax rate of 17%.

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Simultaneously, based on clause 3, Article 20 of Circular 78/2014/TT-BTC, amended by Article 6 of Circular 151/2014/TT-BTC, as follows:

Tax Exemption and Reduction Preferences

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3. Exemption from tax for 2 years and a 50% reduction in payable tax for the subsequent 4 years for income from implementing new investment projects stipulated in Clause 4, Article 19 of Circular No. 78/2014/TT-BTC dated June 18, 2014, by the Ministry of Finance and income from enterprises implementing new investment projects in industrial parks (except those located in areas with favorable socio-economic conditions).

Areas with favorable socio-economic conditions specified in this clause are inner districts of special-grade cities, grade-I cities under central authority, and grade-I cities under provincial authority, excluding districts of special-grade cities, grade-I cities under central authority, and grade-I cities under provincial authority newly established from districts from January 1, 2009. In cases where the industrial park is located in both favorable and non-favorable areas, the determination of tax incentive for the industrial park is based on the actual location of the investment project on the ground.

The classification of special-grade and grade-I urban areas prescribed in this clause is carried out under Decree 42/2009/ND-CP dated May 7, 2009, by the Government of Vietnam on urban classification and any amended documents to this Decree (if any).

Thus, corporate income tax incentive policies for investment projects in areas with difficult socio-economic conditions will include:

- Investment projects in areas with difficult socio-economic conditions are eligible for a preferential tax rate of 20% for ten years (10 years).

- Investment projects in areas with difficult socio-economic conditions will be exempt from taxes for 2 years and receive a 50% reduction in payable tax for the next 4 years.

Which enterprises are eligible for corporate income tax incentives in Vietnam?

According to clause 1, Article 18 of Circular 78/2014/TT-BTC, regulations on the conditions to apply corporate income tax incentives are outlined as follows:

Conditions for Applying Corporate Income Tax Incentives

1. Corporate income tax incentives only apply to enterprises that perform accounting, invoicing, documentation, and pay corporate income tax by declaration.

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Thus, corporate income tax incentives apply only to enterprises that perform accounting, invoicing, documentation, and pay corporate income tax by declaration.