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Tax incentives apply to investment projects in specific sectors and areas with different socio- economic conditions as well as those in high-tech zones and economic zones in order to encourage the development of the economy, technology, and education of these regions. The tax incentives are as follows:

Tax Incentives for Government-Encouraged Sectors – Category A 

Preferential CIT rates

Additional incentives Applicable to:

17% applicable

for 10 years

CIT exemption for up to 2 years and 50% CIT reduction for up to 4 subsequent years

  • Enterprises’ incomes from the implementation of new investment projects in areas with difficult socio-economic conditions;
  • Enterprises’ incomes from the implementation of new investment projects, including manufacture of high-grade steel; energy- saving products; machines and equipment for agricultural, forest and fishery production and salt making and irrigation equipment; production and refining of livestock, poultry and aquatic feeds; and development of traditional trades and occupations

10% applicable

for 15 years

CIT exemption for up to 4 years and 50% CIT reduction for up to 9 subsequent years

  • Newly established companies in regions included on the government- issued list of geographical areas with extremely difficult socio- economic conditions, economic zones, high-tech zones;
  • Newly established companies investing in the high tech sector, producing software, engaging in scientific research and technology development, or investing in the development of infrastructure;
  • Incomes of hi-tech enterprises and hi-tech agricultural enterprises;
  • Enterprises’ incomes from the implementation of new investment projects in production sectors (excluding projects to include commodities subject to exercise tax, and mining projects). Projects must satisfy one of the following criteria:
    • Having investment capital of at least VND 6 trillion (US$258,000) to be disbursed within three years after being granted the permission for first-time investment and having a total annual turnover of at least VND 10 trillion (US$430,275) within 3 years after the year it begins earning turnover;
    • Having investment capital of at least VND 6 trillion to be disbursed within 3 years after being granted the permission for first-time investment and employing more than 3,000 workers within 3 years after the year it begins earning turnover

10% tax rate

CIT exemption for up to 4 years and 50% CIT reduction for up to 9 subsequent years

  • Incomes of enterprises operating in educational training, vocational training, health care, culture, sports, and environmental industries
 
  • Enterprises’ incomes from the implementation of projects on investment in social housing for sale, lease or, purchase for the entities;
  • Press agencies’ incomes from printed newspapers, including advertising on printed newspapers in accordance with the Press Law; publishing agencies’ incomes from publishing activities
  • Enterprises’ incomes from forest planting, tending and protection, agriculture, forestry, and aquaculture in areas with difficult socio- economic conditions; production, multiplication, and crossbreeding of plant varieties and animal breeds, making, exploiting, and refining of salt, except for salt making by cooperatives; investment in the preservation of post-harvest agricultural products, aquatic products, and food;
  • Incomes of cooperatives from agricultural, forestry, fishery, and salt making activities outside areas with difficult socio economic conditions or areas with extremely difficult socio-economic conditions, except for incomes of cooperatives that are exempt from CIT prescribed in Decree 218/2013/ND-CP

 

The preferential CIT rates above are applied from the first year the enterprise has turnover. The additional incentives of CIT exemption or reduction are applied from the first year in which the enterprise has taxable income. If an enterprise does not have taxable income in the first three years from the first year it has turnover, the tax exemption and reduction will apply starting from the fourth year. In addition to tax incentives, tax reductions may be available for enterprises engaging in manufacturing, construction, and transportation activities, which employ numerous female or ethnic minority staff members.

 

 

 

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