Vietnam: Conditions for enterprise income tax incentives

-  The enterprise income tax incentives are applicable to the enterprises that follow the regime for accounting and invoicing, and pay tax according to declarations.

- Enterprise income tax incentives for new project of investment are not applicable to division, merger, amalgamation, and conversion of enterprises, change of ownership, and other cases according to law.

- Enterprises must separate the incomes from the operations eligible for tax incentives from the incomes from the operations that are not eligible for tax incentives; if such incomes are not able to be separated, the income from the operations eligible for tax incentives shall be determined based on the ratio of the revenue from the operations eligible for tax incentives to the total revenue of the enterprise.

The tax rate of 20% and the tax incentives  are not applicable to:

- Incomes from transfer of capital, transfers of the right to contribute capital; incomes from the transfers of real estate, except for social housing; incomes from transfers of projects of investment, transfers of the right to participate in projects of investments, transfers of the right to explore and extract minerals; incomes from operations outside Vietnam;

- Incomes from the exploration and extraction of petroleum and other rare resources, and incomes from mineral extraction;

- Incomes from services subject to special excise duty according to the Law on Special excise duty;

- Other cases decided by the Government.

If an enterprise is eligible to multiple tax incentives for the same income at the same time, it may choose the most advantageous incentive.

View more details at the Law on the amendments to the Law on Enterprise Income Tax 2013 of Vietnam, effective from January 01, 2014.

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