Tax exemption and reduction durations in Vietnam

Tax exemption and reduction durations in Vietnam

Hi DMS Lawyers in Vietnam, We are planning to set up a company in Vietnam to do business in a tax incentive area, but we are not clear about the term (duration) of tax exemption and reduction applicable in Vietnam. I would like DMS Lawyers in Vietnam advices us on that issue. Thanks,

Hi, DMS Lawyers in Vietnam answer to your enquiry as follows:

1. Tax exemption for 4 years and 50% reduction of payable tax amounts for 9 subsequent years are applicable to:

a/ Incomes of enterprises from the implementation of new investment projects specified the law;

b/ 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 as specified by law.

2. Tax exemption for 4 years and 50% reduction of payable tax amounts for 5 subsequent years  are applicable to:

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 as specified by law.

3. Tax exemption for 2 years and 50% reduction of payable tax amounts for 4 subsequent years are applicable to:

Incomes from the implementation of new investment projects specified 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-Irban centers and those in provincial grade-I cities).

4. The tax exemption or reduction duration specified in this Article shall be counted consecutively from the first year an enterprise has taxable income from a new investment project eligible for tax incentives. If an enterprise has no taxable income for the first 3 years, counting  from the first year it has turnover from a new investment project, the tax exemption or reduction duration shall be counted from the fourth year.

5. The tax exemption or reduction year shall be determined according to the tax period. The tax  exemption or reduction. 

Legal basis:

Article 20 Circular No 78/2014/TT-BTC dated June 18, 2014

Tax exemption and reduction durations in Vietnam

  DMS Law firm in Vietnam
Director
(Signed)
Lawyer Do Minh Son 

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