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| Small-sized and micro enterprises would be subject to an annual CIT rate of 15-17 percent__Photo: VNA |
The Ministry of Finance (MOF) has proposed the reduction of corporate income tax (CIT) rates for small-sized and micro enterprises from current 20 percent to 15-17 percent, according to the latest draft revised Law on Corporate Income Tax.
As per the draft, income earned by a business in the year preceding the year in question would be used as a basis for determining applicable CIT rates.
Accordingly, any business with a total income of under VND 3 billion per year would be subject to an annual CIT rate of 15 percent. Businesses with a total income of between VND 3 billion and under VND 50 billion would pay CIT at the rate of 17 percent.
For newly established businesses, the Government would be in charge of providing specific regulations on total income for use as a basis for CIT application, according to the MOF.
It is important to note that the proposed tax rates of 15-17 percent would not be applicable to businesses being subsidiaries or affiliated companies whose parent businesses fail to meet the requirements on taxable revenues.
The MOF also suggests the application of the CIT rate of 10 percent for 15 years for new investment projects located in areas with difficult socio-economic conditions. Incomes generated by press agencies from press activities, excluding incomes from printed newspapers, would be subject to the CIT rate of 15 percent.
The CIT rate of 17 percent per year for a period of 10 years would be applicable to investment projects in commercial operation of technical facilities in support of small- and medium-sized enterprises and those on commercial operation of co-working space of startup businesses.
Noteworthily, the draft law introduces four additional categories of non-taxable corporate income for cases eligible for corporate income tax exemption, including (i) income generated from the transfer of carbon credits and the initial transfer of green bonds, (ii) income being direct financial support and compensation from the state budget, (iii) income being asset value differences arising in revaluation of assets for equitization, applicable to enterprises with their charter capital wholly owned by the State, and (iv) income generated by public non-business units from the provision of basic and essential public services.
The draft law is scheduled to be passed by the National Assembly in May 2025.- (VLLF)
