CORPORTE INCOME TAX (CIT)
The standard CIT rate is fixed at 20% (effective from Jan.1st 2016), while the CIT rate applied to the mining and petroleum activities is in range of 32 ~ 50%.
Preferential CIT rate (5% ~ 17%) is generally applicable from the first revenue – generation year, except hi-tech enterprises or projects.
CIT holiday is generally available from the first profit – making year or the fourth revenue-generation year, where applicable, except high-tech enterprises.
Large manufacturing project: CIT rate of 10% applied for 15 years.
Encouraged projects, activities
|– Investment projects in the areas of with specially – difficult socio-economic conditions, EZ, Hi-tech Park; Hi-tech projects, Hi-tech enterprises, R & D.
– Water plant, power plant; Recycled energy; Manufacture of software, composite material, light building material, rare & prestigious material; Supporting industries in priority for development (textile & garment, leather & footwear, electronics– information technology, automobile, mechanics) meeting the European standard or equivalent; Biotechnology.
– Environmental protection projects; Development of especially vital infrastructures.
– Manufacturing investment projects with capital scale from VND 6,000 billion and being disbursed within 03 years from the date of investment licensing, and no later than 03 years from the year generating revenue must meet one of the following conditions:
· Using over 3,000 fulltime employees
· Making at least a revenue of VND 10,000 billion/year
|* CIT rate of 10% applicable for a period of 15 years
* CIT exemption of 4 first years, then CIT rate of 5% applicable for 9 subsequent years.
|Specially – preferential investment projects include:
· Innovative and creative center, R & D center with total investment capital of from VND 3,000 billion; National innovative and creative center established under the Decision of the PM.
· Investment projects under the list of the specially -preferential businesses having total investment capital of from VND 30,000 billion, and being disbursed at least VND 10,000 billion within 03 years.
|* CIT rate from 5% ~ 10% applicable for from 15 ~ 37.5 years
* CIT exemption duration not exceeds 6 years.
* Period of reduction of 50% of preferential CIT not exceeds 13 years
|– Income of enterprises from activities of: Farming, husbandry, processing of agriculture and aquaculture products in areas with difficult socio-economic conditions; Producing animal breed, plant varieties; Salt refinering.||* CIT rate of 10% applicable for entire project life|
|– Income of enterprises working in farming, husbandry, processing of agriculture and aquaculture products.
|* CIT rate of 15%|
|– Projects in areas with difficult socio-economic conditions, in IZs (not including IZs in favorable area).
– Processing animal feed; Manufacture of equipment and machinery servicing agriculture and aquaculture activities; Power saving products; Hi-quality steel.
– Traditional handicraft industries.
|* CIT rate of 17% applicable for a period of 10 years
* CIT exemption of 2 first years, then CIT rate of 8.5% for 4 subsequent years.
|– Socialization activities in the sectors of education and training, vocational training, culture, medical health, sports and environment, judicial expertise.||* CIT rate of 10% applicable for entire project life
* CIT excemption of 4 first years; then CIT rate of 5% applicable either for 9 subsequent years (project implemented at dis-advantageous areas) or for 5 subsequent years for other areas.
Phase 1: Investment license: 15 business days è 15 days
Note: The investment incentive is not applicable to investment projects implemented in preferential areas, or with a large scale of VND 6,000 billion or more in field of mining, or producing or business in goods, services subject to special excercise tax, except automobile industry, production of boats and aircrafts; Building commercial housing (Paragraph 5 Article 15 Law on Investment No.61/2020).
Areas with specially – difficult socio-economic conditions, areas with difficult socio-economic conditions, busines subject to specially -preferential or preferential are regulated in the Decree No.31/2021 guiding the implementation of the Investment Law No.61/2020.
Investment Promotion Centre – South Vietnam
Department of Information & Document