When is the 10-year preferential corporate income tax rate of 17% applied in Vietnam?

When is the 10-year preferential corporate income tax rate of 17% applied in Vietnam?

Based on Article 13 of the Law on Corporate Income Tax 2008 (amended and supplemented by Clause 7, Article 1 of the Law on Amendments to the Law on Corporate Income Tax 2013, amended and supplemented by Clauses 5, 6, 7, and 8, Article 1 of the Law on Amendments to Laws on Taxation 2014, and supplemented by point a, Clause 4, Article 75 of the Investment Law 2020) regarding the preferential corporate income tax rate as follows:

Tax Rate Incentives

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3. A tax rate of 20% is applied for ten years for:

a) Income from new investment projects located in areas with difficult socio-economic conditions;

b) Income from new investment projects, including: production of high-grade steel; production of energy-saving products; production of machinery and equipment serving agricultural, forestry, fishery, and salt production; manufacture of irrigation equipment; production and refinement of animal, poultry, aquatic feed; development of traditional trades.

From January 1, 2016, income of enterprises stipulated in this clause is subject to a tax rate of 17%.

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Thus, there are 02 cases where the preferential corporate income tax rate of 17% for a period of 10 years is applied:

[1] Income from new investment projects located in areas with difficult socio-economic conditions.

[2] Income from new investment projects, including:

+ Production of high-grade steel;

+ Production of energy-saving products;

+ Production of machinery and equipment serving agricultural, forestry, fishery, and salt production;

+ Manufacture of irrigation equipment;

+ Production and refinement of animal, poultry, aquatic feed;

+ Development of traditional trades.

When is the 10-year preferential corporate income tax rate of 17% applied in Vietnam? (Image from the Internet)

When does the preferential corporate income tax rate period apply?

Pursuant to Clause 6, Article 13 of the Law on Corporate Income Tax 2008 (amended by Clause 7, Article 1 of the Law on Amendments to the Law on Corporate Income Tax 2013) regarding the period application of the preferential corporate income tax rate as follows:

Article 13. Tax Rate Incentives

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6. The preferential tax rate application period stipulated in this Article is calculated from the first year the new investment project of the enterprise generates revenue; for high-tech enterprises or agricultural enterprises applying high technology, it is calculated from the date of issuance of the certificate as a high-tech enterprise or an agricultural enterprise applying high technology; for high-tech application projects, it is calculated from the date of issuance of the certificate of high-tech application project.

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Thus, the preferential corporate income tax rate period is calculated from the first year the new investment project of the enterprise generates revenue.

Specifically, for high-tech enterprises or agricultural enterprises applying high technology, it is calculated from the date of issuance of the certificate as a high-tech enterprise or an agricultural enterprise applying high technology;

And for high-tech application projects, it is calculated from the date of issuance of the certificate of high-tech application project.

What is the latest list of areas with difficult socio-economic conditions in Vietnam for 2025?

The latest list of areas with difficult socio-economic conditions for 2025 is stipulated in Appendix III issued together with Decree 31/2021/ND-CP as follows:

See details of the latest list of areas with difficult socio-economic conditions for 2025 >>> HERE