Vietnam: Income subject to corporate income tax from which activities? Do enterprises engaged in marine fisheries have to pay corporate income tax?
Do enterprises engaged in marine fisheries have to pay corporate income tax?
Pursuant to the provisions of Article 4 of the 2008 Law on Corporate Income Tax in Vietnam (amended and supplemented by Clause 3, Article 1 of the 2013 Law on Amendments to Law on Corporate Income Tax and Clause 2, Article 1 of the 2014 Law on Amendments of Tax Laws) on tax-exempt incomes as follows:
Tax-exempt incomes
1. Income from farming, breeding, cultivation and processing of agriculture and aquaculture products, salt production of cooperatives; income of cooperatives engaged in agriculture, forestry, aquaculture, or salt production in disadvantaged areas or extremely disadvantaged areas; income of companies from farming, breeding, cultivation and processing of agriculture and aquaculture products in disadvantaged areas; income from marine fisheries.
2. Income from the application of technical services directly for agriculture.
3. Income from the performance of contracts on scientific research and technological development, trial products and products turned out with technologies applied for the first time in Vietnam.
4. Incomes from production and sale of goods and services of enterprises that have at least 30% of the employees are disabled people, detoxified people, suffers of HIV/AIDS, and have at least 20 employees, except for enterprises engaged in finance and real estate business.
5. Income from job-training activities exclusively reserved for ethnic minority people, the disabled, children in extremely disadvantaged circumstances and persons involved in social evils.
6. Incomes divided for capital contribution, joint venture or association with domestic enterprises, after enterprise income tax has been paid under the provisions of this Law.
7. Received financial supports used for educational, scientific research, cultural, artistic, charitable, humanitarian and other social activities in Vietnam.
8. Incomes from the transfer of Certified Emissions Reductions (CERs) of enterprises issued with CERs.
9. Incomes from the performance of tasks of the Vietnam Development Bank, which are assigned by the State, in credit for development and export; incomes from granting credit to the poor and beneficiaries of policies of Vietnam Bank for Social Policies; incomes of state financial funds and other state funds serving non-profit purpose incomes of organizations, of which 100% charter capital is possessed by the State, that are established by the Government to settle bad debts of Vietnamese credit institutions.
10. Undistributed incomes of private organizations, which make investment in education, health, and other fields, that are kept to serve their development in accordance with the laws on education, health, and other fields; the incomes that form the undistributed assets of cooperatives established and operating in accordance with the Law on Cooperatives.
11. Incomes from transfer of technologies that are prioritized to be to organizations and individuals in localities facing extreme socio-economic difficulties.
Thus, enterprises engaged in marine fisheries are exempt from corporate income tax as prescribed above.
Vietnam: Income subject to corporate income tax from which activities? Do enterprises engaged in marine fisheries have to pay corporate income tax?
Income subject to corporate income tax from which activities?
Pursuant to the provisions of Article 3 of the 2008 Law on Corporate Income Tax in Vietnam (amended and supplemented by Clause 2, Article 1 of the 2013 Law on Amendments to Law on Corporate Income Tax and Clause 1, Article 1 of the 2014 Law on Amendments of Tax Laws) stipulating taxable incomes as follows:
- Taxable incomes include income from goods and service production and business activities and other incomes.
- Other incomes include: income from transfer of capital, transfer of the right to capital contribution; income from real estate transfer, transfer of construction projects, transfer of the right to participate in construction projects, transfer of the right to mineral exploration, mineral extraction, and mineral processing; income from the right to enjoyment of property, right to ownership of property, including income from intellectual property rights defined by law; income from transfer, lease, liquidation of assets, including valuable papers; income from deposit interest, loan interest, sale of foreign exchange; collection of debts that were cancelled; receipts from debts without creditors; incomes from business operation in previous years that were committed, and other incomes.
- With regard to Vietnamese companies making investments in the countries with which Vietnam have Double Taxation Agreement and transfer incomes exclusive of corporate income tax paid overseas to Vietnam, regulations of such Double Taxation Agreements shall apply. If investments are made in countries with which Vietnam has not had Double Taxation Agreements, and if corporate income tax incurred in such countries is lower than that imposed by the Law on Corporate income tax of Vietnam, the tax difference shall be paid.
How much is the corporate income tax rate?
Pursuant to the provisions of Article 10 of the 2008 Law on Corporate Income Tax in Vietnam (amended and supplemented by Clause 6, Article 1 of the 2013 Law on Amendments to Law on Corporate Income Tax) as follows:
Tax rate
1. The corporate income tax rate is 22%, except for the cases in Clause 2 and Clause 3 of this Article and beneficiaries of tax incentives defined in Article 13 of this Article.
The cases to which the tax rate of 22% in this Clause shall apply the tax rate of 20% from January 01, 2016.
2. Any enterprise of which the total revenue does not exceed 20 billion VND per year are eligible for the tax rate of 20%.
The revenue used as the basis for identifying enterprises eligible for the tax rate of 20% in this Clause is the revenue of the previous year.
3. The rates of enterprise income tax on the exploration and extraction of oil and other rare resources in Vietnam range between 32% and 50% depending on each project and each business establishment.
The Government shall elaborate and provide guidance on the implementation of this Article.
Thus, enterprises that are subject to corporate income tax must comply with the above tax rates.
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