New tax incentives and solutions in support of enterprises

With a view to creating a more competitive business and investment environment and luring more investors, a range of tax incentives have been recently introduced.

The Government on August 25 issued Resolution No. 63/NQ-CP providing a series of tax solutions aimed at helping enterprises deal with their difficulties and expand their operations.

Accordingly, the tax payment time limit will be extended up to 60 days for value-added tax (VAT) on imported machinery and equipment used to create fixed assets in case the total import value is at least VND 100 billion.

Enterprises will not have to pay corporate income tax on social welfare expenses for their workers.

For real estate transfer activities, individuals may choose to pay personal income tax at either 25 percent rate on earnings from each transfer or two percent of the selling price in each deal.

Moreover, taxpayers with income of up to VND 50 billion a year will have to declare VAT on a quarterly basis.

The resolution also sets forth tax solutions to surmount enterprises’ difficulties and troubles within the competence of the National Assembly.

For projects capitalized at least VND 200 billion and with capital disbursement period of up to 5 years from the date of being licensed, the preferential tax rate of 10 percent will be applied for a period of 15 years.

In addition, these investors will be exempted from corporate income tax for four years and 50-percent reduction of payable tax for subsequent seven years.

A corporate income tax rate of 20 percent will be applied during 2014-15 for agricultural enterprises employing at least 300 workers or those factoring harvested products from farmers outside difficulty-hit areas.

From January 1, 2016, the corporate income tax rate for these enterprises will be reduced to 17 percent.

On the same day, the Ministry of Finance also issued Circular No. 119/2014/TT-BTC amending a number of articles of seven circulars currently in force in order to simplify tax administrative procedures.

Accordingly, from September 1, enterprises will not be required to declare VAT on exported goods that have been returned by foreign customers.

Enterprises will be no longer required to have VND 1 billion worth of assets, machinery and equipment before being able to register for a tax deduction.

Enterprises will also not be obliged to submit as many documents and invoices to tax offices as at present. For example, for exported goods and services, they will no longer have to hold goods and service sales invoices enclosed with dossiers for VAT refund.

Furthermore, enterprises will not have to fill in invoices and declare VAT if they export machinery, equipment, materials and goods for borrowing or return.-

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