Vietnam: Income subject to enterprise income tax exemption

According to Decree No. 218/2013/NĐ-CP of Vietnam’s Government, income subject to enterprise income tax exemption include:

1. Income from farming, raising, aquaculture, salt production of cooperatives; income of cooperatives operating in the field of agriculture, forestry, fishery and salt industry done in areas with difficult or extremely difficult socio-economic conditions; the income of enterprise from the farming, raising, aquaculture in areas with extremely difficult socio-economic conditions; income from fishing activities.

2. Income from the performance of technical services directly serving agricultural exempted from tax includes: income from water irrigation and drainage services, plowing, harrowing, dredging of canals and ditches in the field; insect and diseases prevention services for crops, livestock; services of agricultural products harvest.

3. For income from the performance of the contract for scientific research and technological development, income from the sale of products made on trial and income from products made by new technology first applied in Vietnam. The tax exemption period must not exceed 01 year from the start date of revenue from the sale of products under the contract for scientific research and technological application, production on trial or by new technology.

4. Income from business and production activities of goods and services of enterprises having more than 30% of average number of employees as disabled, rehabilitated persons and HIV/AIDS sufferers.

5. Income from vocational training dedicated to the ethnic minorities, the disabled, underprivileged children, the objects of social evils, the persons under rehabilitation, the rehabilitated persons, drug users, HIV/AIDS sufferers. Where the vocational training school includes other subjects, the Exempt income is determined by the ratio between a number of ethnic minorities, the disabled, underprivileged children, the objects of social evils, the persons under rehabilitation, the rehabilitated persons, drug users, HIV/AIDS sufferers and the total learners of the establishment.

6. Income divided from capital contribution, share purchase, joint venture and economic association with domestic enterprises. After the party receiving the contributed capital, issuing stocks or performing the joint venture and association has paid tax under the provisions of the Law on corporate income tax, including the case where the party receiving the contributed capital, issuing stocks or performing the joint venture and association is enjoying preferential tax specified in Chapter IV of this Decree.

7. The grants received are used for educational activities, scientific research, culture, art, charity, humanity and other social activities in Vietnam.

8. Income from transfer of Certified Emission Reduction (CER) credit of enterprises first issued with Certified Emission Reduction (CER) credit, for the following transfers, the corporate income tax shall be paid as prescribed.

9. Income from performing the tasks assigned by the Vietnam Development Bank on development investment credit, export credit; income from credit activities for the poor and other subjects enjoyed preferential treatment policy of Vietnam Bank for Social Policies; income of one member limited liability companies managing the assets of Vietnamese credit Institutions; income from revenue-generated activities by performing the tasks assigned by the State of the State financial funds:Vietnam social insurance Fund, the deposit insurers, the health insurance Fund, the vocational training support Fund, the overseas employment support Fund of the Ministry of Labor, Invalids and Social Affairs, the famer support Fund, Vietnam legal aid Fund, the public-utility telecommunications Fund, the local development investment Fund, Vietnam environmental protection Fund, the credit guarantee Fund for small- and medium-sized enterprises, the cooperative development aid Fund, the poor women support Fund, the protection Fund for citizens and legal persons in overseas, the housing development Fund, the development Fund for small- and medium-sized enterprise, the national scientific and technological development Fund, the National technological innovation fund; Incomes from the performance of tasks which are assigned by the State of the housing and land development Fund and other funds of the State that are decided for the establishment by the Government and Prime Minister and operating under Vietnam's laws.

10. The undivided income of the establishments socializing the education, training, health and other socialized fields (including Offices of judicial expertise) is left for investment and development of those establishment as prescribed by specialized law on education – training, health and other socialized fields; the income formed from the undivided assets of cooperatives which are established and operating under the provisions of the Law on cooperatives.

11. Income from technology transfer under priority fields transferred to organizations and individuals in the areas with the extremely difficult socio-economic conditions.

View more details at Decree No. 218/2013/NĐ-CP of Vietnam’s Government, effective from February 15, 2014.

Ty Na

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