Vietnam’s policies on CIT exemption for innovative entrepreneurship enterprises in Ho Chi Minh City

Vietnam’s policies on CIT exemption for innovative entrepreneurship enterprises in Ho Chi Minh City
Nguyễn Thị Diễm My

On February 2, 2024, the Government of Vietnam promulgated Decree No. 11/2024/ND-CP on reasonable interests and profits, payment methods, and settlement of investment projects applying BT contracts; exemption from corporate income tax and personal income tax in Ho Chi Minh City.

Vietnam’s policies on CIT exemption for innovative entrepreneurship enterprises in Ho Chi Minh City 

- Innovative entrepreneurship enterprises, scientific and technological organizations, innovative centers, and intermediary organizations for innovative entrepreneurship support (collectively called "enterprises") with revenues from innovative entrepreneurship operations in Ho Chi Minh City shall be exempted from CIT for such revenues.

Enterprises exempted from CIT shall meet the regulations of the People’s Council of Ho Chi Minh City on prioritized fields and criteria, conditions, and contents of innovative entrepreneurship operations. 

The tax exemption period is 5 years from the time enterprises have CIT payable generated from innovative entrepreneurship operations in Ho Chi Minh City during the effective period of Resolution No. 98/2023/QH15. After the expiry date of Resolution No. 98/2023/QH15, if the tax exemption period prescribed in this Clause has not expired, enterprises shall carry out the implementation until it expires. 

Enterprises in tax exemption period or subject to CIT exemption under other exemption conditions different from regulations in this Decree may choose to be exempted from tax according to other tax exemption conditions or this Decree for the remaining period. 

- During the effective period of Resolution No. 98/2023/QH15, organizations with revenues from transferring capital contributions or rights to contribute capital to innovative entrepreneurship enterprises in Ho Chi Minh City shall be exempted from CIT for such revenues.

Innovative entrepreneurship enterprises in Ho Chi Minh City prescribed in this Clause shall meet the regulations of the People’s Council of Ho Chi Minh City on prioritized fields and criteria, conditions, and contents of innovative entrepreneurship operations. 

Revenues from transferring capital contributions and rights to contribute capital prescribed in this Clause are revenues from transferring a part or the whole of capital contributions and rights to contribute capital to innovative entrepreneurship enterprises in Ho Chi Minh City (including cases of enterprise sale), excluding revenues from transferring shares, bonds, fund certificates, and other securities as per regulation.

In the case of selling a whole one-member limited liability company owned by an organization in the form of capital transfer associated with real estate, declare and pay CIT according to real estate transfer operations.

- If an enterprise carries out many business and production operations, it shall determine and keep the business account of revenues from operations exempted from tax prescribed in this Article according to CIT laws. 

- Enterprises shall declare and pay taxes according to tax administration laws. 

Decree No. 11/2024/ND-CP comes into force as of February 2, 2024. 

Regulations on CIT and PIT exemption prescribed in Article 13 and Article 14 of Decree No. 11/2024/ND-CP shall be applied as of the effective date of Resolution No. 98/2023/QH15 (August 1, 2023). 

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