Types of corporate income tax period-exempt incomes in Vietnam

Types of corporate income tax period-exempt incomes in Vietnam (Internet image)

1. Types of corporate income tax period-exempt incomes in Vietnam

In Article 4 of the Law on Corporate income tax period 2008, the tax-exempt incomes are as follows:

-  Income from farming, breeding, cultivation and processing of agriculture and aquaculture products, salt production of cooperatives;

Income of cooperatives engaged in agriculture, forestry, aquaculture, or salt production in disadvantaged areas or extremely disadvantaged areas;

Income of companies from farming, breeding, cultivation and processing of agriculture and aquaculture products in disadvantaged areas;

Income from marine fisheries.

- Income from the application of technical services directly for agriculture.

- Income from the performance of contracts on scientific research and technological development, trial products and products turned out with technologies applied for the first time in Vietnam.

- Incomes from production and sale of goods and services of enterprises that have at least 30% of the employees are disabled people, detoxified people, suffers of HIV/AIDS, and have at least 20 employees, except for enterprises engaged in finance and real estate business.

- Income from job-training activities exclusively reserved for ethnic minority people, the disabled, children in extremely disadvantaged circumstances and persons involved in social evils.

- Incomes divided for capital contribution, joint venture or association with domestic enterprises, after corporate income tax period has been paid under the provisions of this Law.

- Received financial supports used for educational, scientific research, cultural, artistic, charitable, humanitarian and other social activities in Vietnam.

-  Incomes from the transfer of Certified Emissions Reductions (CERs) of enterprises issued with CERs.

2. Corporate income tax period in Vietnam

In Article 5 of the Law on Corporate income tax period 2008, the tax period is as follows:

- An enterprise income tax period is the calendar year or fiscal year, except the cases defined in Clause 2 of Article 5 of the Law on Corporate income tax period 2008.

- The enterprise income tax period upon each time of income generation applies to foreign enterprises specified at Points c and d, Clause 2, Article 2 of the Law on Corporate income tax period 2008.

3. Corporate income tax rates in Vietnam

In Article 10 of the Law on Corporate income tax period 2008, the corporate income tax rates are as follows:

- The enterprise income tax rate is 22%, except for the cases in Clause 2 and Clause 3 of Article 10 of the Law on Corporate income tax period 2008 and beneficiaries of tax incentives defined in Article 13 of the Law on Corporate income tax period 2008.

The cases to which the tax rate of 22% in this Clause shall apply the tax rate of 20% from January 01, 2016.

- Any enterprise of which the total revenue does not exceed 20 billion VND per year are eligible for the tax rate of 20%.

The revenue used as the basis for identifying enterprises eligible for the tax rate of 20% in this Clause is the revenue of the previous year.

- The rates of enterprise income tax on the exploration and extraction of oil and other rare resources in Vietnam range between 32% and 50% depending on each project and each business establishment.

Vo Ngoc Nhi

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