Which incomes of an enterprise shall be entitled to the corporate income tax exemption by the laws of Vietnam?

Corporate income tax (“CIT”) directly affects the business of an enterprise, thus knowing which incomes shall be entitled to CTI exemption o plays an important role.

Through this article, BLawyers Vietnam would like to which incomes are entitled to CIT exemption and application dossiers and orders to request a CIT exemption.

I. Incomes being entitled to CIT exemption

According to current regulations, when having an income falling into 12 following cases, enterprises shall be entitled to CIT exemption:

  1. Incomes from cultivation, animal husbandry, and aquaculture in extremely difficult socio-economic areas; income from fishing activities.
  2. Incomes from performing technical services directly serving agriculture such as irrigation services; tilling services; services to prevent pests and diseases for plants and animals, etc.
  3. Incomes from the performance of contracts on scientific research and technological development. Enterprises are exempt from CIT during the contract performance, but not exceeding 03 years from the date of starting to have revenue from the performance of this contract. For income from selling products made from new technologies applied for the first time in Vietnam, enterprises are entitled to CIT exemption for up to 05 years from the date of revenue from selling products.
  4. Incomes from production and trading of goods and services with 30% of the average number of employees in the year or more who are disabled people, people after detoxification, and people with HIV/AIDS. However, enterprises need to meet the following conditions: (a) having an average number of employees in the year of 20 or more; and (b) not operating in the financial, and real estate business fields.
  5. Incomes from vocational training activities exclusively for ethnic minorities, people with disabilities, children in extremely difficult circumstances, subjects of social evils, people undergoing detoxification, people after detoxification, and people with HIV/AIDS.
  6. Income from capital contribution, share purchase, joint venture, and economic association with domestic enterprises.
  7. The grant received is used for educational, scientific, cultural, artistic, charitable, humanitarian, and other social activities in Vietnam.
  8. Income from the transfer of the emission reduction certificate for the first time of the enterprise granted the emission reduction certificate.
  9. Income from performing the tasks assigned by the State for the Vietnam Development Bank in the activities of development investment credit and export credit; income from credit activities for the poor and other policy beneficiaries of the Vietnam Bank for Social Policies; income of one-member limited liability companies managing assets of Vietnamese credit institutions; income from activities with revenues from performing State-assigned tasks of State financial funds.
  10. The undivided income of the establishment performing socialization (including the Office of Judicial Expertise) is left to invest in the development of that establishment.
  11. Income from technology transfer in the fields of priority transfer to organizations and individuals in areas with extremely difficult socio-economic conditions.
  12. Income of the bailiff’s office (except income from activities other than bailiff activities) during the pilot implementation period in accordance with the law on civil judgment enforcement.

II. Dossiers and orders to be entitled to CIT exemption

To be entitled to a CIT exemption, businesses need to prepare dossiers including:

(i) Tax declaration; and

(ii) Documents related to the determination of exempted tax amounts.

After preparing the mentioned-above dossiers, the enterprise shall submit them to the tax administration authority. Within 30 – 40 days from the date of receipt of a full dossier, the tax administration authority will issue a decision on CIT exemption for the enterprise.

Should you have any questions about the above contents, please revert to BLawyers Vietnam at consult@blawyersvn.com. We are more than happy to hear from you!

Date: 26 June 2022

Writer: Tuyen Pham

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