Vietnam: What are the CIT rates applicable to entities in Phu Quoc island?

Vietnam: What are the CIT rates applicable to entities in Phu Quoc island? (Illustrative photo)

Circular 10/2007/TT-BTC stipulates the CIT policies applicable to domestic and foreign entities in Phu Quoc island as follows:

- Investment projects of domestic and foreign entities to establish new business establishments in Phu Quoc island shall apply a CIT rate of 10% throughout the project duration; CIT exemption shall apply for 04 years from the time taxable income is generated; and a reduction of 50% in payable tax shall apply for the next 09 years.

- The CIT rate applicable to business establishments investing in new production lines, scale expansions, technological innovations, ecological environment improvements, and production capacity enhancements shall comply with current laws on CIT.

- CIT on income from land use right transfers and land lease transfers shall comply with current laws on CIT.

- To be eligible for CIT incentives, entities having investment projects in Phu Quoc island must submit a copy of the Business Registration Certificate (for domestic enterprises) or the Investment License (for foreign-invested enterprises) to the tax authorities where the enterprise declares and pays tax. CIT incentives only apply to business establishments that fully implement accounting policies, invoices, and receipts registered, and make tax payments as declared.

- During their operations, after finalizing with tax authorities and incurring losses, enterprises are allowed to carry forward the losses to subsequent years to offset against taxable income in accordance with current laws.

- Enterprises bear the responsibility for notifying the tax authorities where they declare and pay taxes about the duration of CIT exemption and reduction as specified in this section.

Details can be found at Circular 10/2007/TT-BTC effective from March 07, 2007.

Ty Na

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE