 |
| Planting indigenous trees in Tuyen Hoa district, Quang Binh province.__Photo: Ta Chuyen/VNA |
The Ministry of Finance is proposing amendments to the Law on Corporate Income Tax, offering exemption on corporate taxes on income from green bond interest and carbon credits.
These amendments are designed to better protect the environment and promote sustainable development in line with the global trend of using tax policies to incentivize environmentally friendly practices.
Carbon credits provide an economic incentive for reducing greenhouse gas emissions by allowing organizations or countries to trade in emissions permits. This market-based approach encourages emission reductions in a cost-effective manner and promotes sustainable development.
Vietnam's 2020 Law on Environmental Protection, effective as from January 1, 2022, includes regulations on carbon credits and exchange and transfer mechanisms. These regulations provide a legal framework for the implementation and management of carbon credit activities in the country. By setting out supporting policies and mechanisms, the State aims to encourage the development of carbon market and promote environmental protection efforts.
In addition to carbon credits, the Law on Environmental Protection also addresses the issue of green bonds.
The Ministry of Finance (MoF) has assessed the potential impact of tax exemption for interest income from green bonds and green bond transfer income. It is estimated that if successful issuance of green bonds were to occur, with a scale of 0.17- 0.5 percent of the bond market size, the amount of corporate income tax exempted would be approximately VND 100 billion-300 billion (USD 4 million-12 million). __(VLLF)
