Vietnam: Summary of subjects eligible for CIT incentives, exemptions and reductions in 2020

Policies

No.

Entities

Notes

10% rate for 15 years

1

Incomes of the enterprise from execution of new projects of investment in extremely disadvantaged areas

Appendix of Decree No. 218/2013/NĐ-CP, economic zones, hi-tech zones, including concentrated IT zones established under the Prime Minister’s Decisions

2

Incomes of the enterprise from execution of new projects of investment in:

- Scientific research and technology development; application of high technologies given priority according to the Law on High Technologies of Vietnam;

- Cultivation of high technology, cultivation of high-tech enterprises; venture capital investment in development of high technologies on the list of high technologies given priority;

- Investment in construction, operation of facilities for cultivation of high technologies, cultivation of high-tech enterprises; investment in development of water plants, power plants, water supply and drainage system; bridges, roads, railroads, airports, seaports, air terminals, train stations, and other particularly important infrastructural works decided by the Prime Minister;

- Software production; manufacture of composite materials, light building materials, rare and valuable materials; production of renewable energy, clean energy, waste-to-energy process, development of biotechnology;

- Projects of investment in development of water plants, power plants, water supply and drainage system; bridges, roads, railroads, airports, seaports, air terminals, train stations must generate revenues or incomes from their operation in order to be given tax incentives.

Income from construction of such works of the construction enterprise is not given the aforesaid tax incentives.

3

Incomes of enterprises from execution of new projects of investment in environmental protection, including: manufacture of environmental pollution reduction devices, environment monitoring and analysis devices; pollution reduction and environmental protection; collection, treatment of wastewater, exhaust, solid wastes; recycling or wastes.

4

High-tech enterprises, agriculture enterprises applying high technologies as prescribed by the Law on High Technologies of Vietnam

5

Incomes of enterprises from execution of new projects of investment in manufacturing (except for manufacturing of products subject to special excise tax and mineral extraction projects) that satisfy any of the following criteria:

- The project’s initial capital is at least VND 6,000 billion disbursed within 03 years from the date of investment license according to regulations of law on investment, and the total revenue is at least VND 10,000 billion per year after not more than 3 years from the first year in which revenues are generated by the project (the enterprise must has a total revenue of at least VND 10,000 billion per year in the 4th year from the first year in which revenues are generated).

- The project’s initial capital is at least VND 6,000 billion disbursed within 03 years from the date of investment license according to regulations of law on investment, and project regularly has over 3,000 employees after not more than 3 years from the first year in which revenues are generated by the project (the enterprise’s annual average number of employees is at least 3,000 in the 4th year from the first year in which revenues are generated).

6

Incomes of an enterprise from execution of projects of investment in manufacturing (except for manufacturing of products subject to special excise tax and mineral extraction projects) whose capital is VND 12,000 billion or over, using high technologies that must be appraised in accordance with the Law on High Technologies, the Law on Science and Technology of Vietnam, and capital of which is disbursed within 05 years from the date of investment licensing

7

Incomes of an enterprise for execution of a new project of investment in manufacturing of products on the list of ancillary products given priority that satisfy any of the following criteria:

- Ancillary products are meant to support high technologies according to regulations of the Law on High Technologies of Vietnam;

- Ancillary products are meant to support manufacturing of: textile and garment; leather and footwear; electronics and IT products; manufacturing of cars; fabricating mechanics that, up to January 01, 2015, they cannot be manufactured in Vietnam or can be manufactured in Vietnam and satisfy technical standards of EU or equivalent standards.

10% tax over the entire operating period

1

Incomes of enterprises investment in the public sector fields such as education – training, vocational training, healthcare, culture, sports, environment, and judicial expertise

2

Incomes of publishing houses from publication activities in accordance with the Law on Publication of Vietnam

3

Incomes of press agencies from printed newspapers (including advertisements on printed newspapers) in accordance with the Press Law of Vietnam

4

Incomes of enterprises from the implementation of projects on investment and trading in social houses for sale or lease to or hire-purchase by the subjects specified in Article 53 of the Law on Housing of Vietnam

5

Incomes of enterprises from planting, cultivating, protecting forests; farming, husbandry, aquaculture in disadvantaged areas; forestry in disadvantaged areas; production, propagation and cross-breeding of plant varieties, animal breeds; production, extraction, and refining of salt except for salt production prescribed in Clause 1 Article 4 of Decree 218/2013/NĐ-CP; investment in post-harvest preservation of agriculture products; preservation of agriculture products, aquaculture products, and foods, including direct investment in preservation and lease of preservation equipment

6

Incomes of cooperatives engaged in agriculture, forestry, fisheries or salt production and not located in geographical areas with difficult or particularly difficult socio-economic conditions

15% tax

1

Incomes of enterprises from farming, husbandry, processing of agriculture and aquaculture products in areas other than disadvantaged areas and extremely disadvantaged areas

20% for ten (10) years

1

Incomes of enterprises from the implementation of new investment projects in geographical areas with difficult socio-economic conditions

Appendix to the Government’s Decree 218/2013/NĐ-CP

2

Incomes from enterprises from the implementation of new investment projects on production of hi-class steel, energy-conserving products, machinery and equipment for agriculture, forestry, fisheries and salt production, irrigation and drainage equipment, livestock and aquatic animal feed; and development of traditional crafts and trades (including building and development of traditional handicraft production, farm produce and food processing and production of cultural products)

Enterprises implementing new investment projects in the fields or geographical areas eligible for the tax incentives specified in this Clause will enjoy the tax rate of 17% from January 1, 2016

The preferential tax rate of 20% is applicable throughout the operation duration

1

People’s credit funds, cooperative banks and micro-finance institutions

Upon the expiration of the duration of application of the tax rate of 10% specified at Point a, Clause 1 of this Article, people’s credit funds, cooperative banks and micro-finance institutions newly established in geographical areas with particularly difficult socio-economic conditions specified in the Appendix to the Decree 218/2013/NĐ-CP, may switch to apply the tax rate of 20%. From January 1, 2016, they may switch to the tax rate of 17%.

Tax exemption for 4 years and 50% tax reduction for the next 9 years

1

Incomes of enterprises from execution of projects of investment eligible for 15% rate for 15 years

Projects of investment prescribed in Clause 1 Article 19 of Circular No. 78/2014/TT-BTC

2

Incomes of enterprises from the implementation of new investment projects in the socialized fields in geographical areas with difficult or particularly difficult socio-economic conditions

Projects of investment prescribed in the Appendix to Decree 218/2013/NĐ-CP

Tax exemption for 4 years and 50% reduction of payable tax amounts for 5 subsequent years

1

Incomes of enterprises from the implementation of new investment projects in the socialized fields in geographical areas outside the list of those with difficult or particularly difficult socio-economic conditions

Projects of investment prescribed in the Appendix to Decree 218/2013/NĐ-CP

Tax exemption for 2 years and 50% reduction of payable tax amounts for 4 subsequent years

1

Entities eligible for 20% rate for 10 years

Entities specified in Clause 4 Article 19 of Circular No. 78/2014/TT-BTC

2

Incomes of enterprises from the implementation of new investment projects in industrial parks (except industrial parks in urban districts of special-grade or centrally run grade-I urban centers and those in provincial grade-I cities)

Other cases of tax reduction

1

Production, construction or transportation enterprise that employs between 10 and 100 female laborers who account for more than 50% of its total regular employees or regularly employs over 100 female laborers who account for more than 30% of its total regular employees

Reduction of payable CIT equivalent to actual additional expenses for female laborers as guided in Item a, Point 2.9, Clause 2, Article 6 of Circular No. 78/2014/TT-BTC if they can separately account such expenses

2

Enterprises that employ ethnic minority laborers

Reduction of payable CIT equivalent to actual additional expenses for ethnic minority laborers as guided in Item b, Point 2.9, Clause 2, Article 6 of Circular No. 78/2014/TT-BTC if they can separately account such expenses

3

Enterprises that transfer technologies in the prioritized fields to organizations and individuals in geographical areas with difficult socio- economic conditions 

50% reduction of payable CIT calculated on incomes from technology transfer