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팝업레이어 알림

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  • Tax Base and Foreign Income

    A profit-seeking enterprise with its head office in Vietnam is subject to income tax on its worldwide income. This is true even if the profit-seeking enterprise is a joint venture or a wholly-owned subsidiary of a foreign company. Enterprises with a tax base in Vietnam can claim foreign tax credit for taxes paid abroad on income derived outside Vietnam by branches or agents of a Vietnam-based enterprise. The credit may only be used to offset foreign tax paid in Vietnam and may not exceed the incremental tax liability that would result if the foreign-source income were added to the Vietnam taxable income and taxed at the applicable domestic rate. Profit-seeking enterprises with head offices outside Vietnam, such as branches of foreign companies, are considered non-resident for tax purposes. Such enterprises are subject to income tax only on their Vietnam-source income.

    Income Tax Rate

    The common corporate tax rate for Vietnam companies is 20%. However, for the companies that meet the conditions for the corporate income tax incentives, the applied tax rate can be less than 20% (depend on the specific cases). The lowest tax rate relates to tax incentives can be 10%.  

    Tax incentives

    Corporate income tax incentives in Vietnam includes:

    • Enterprises having investment projects eligible for corporate income tax incentives for being engaged in the fields eligible for investment incentives, incomes from these fields and incomes from the liquidation of waste materials and scraps of products in these fields, exchange rate differences directly related to turnover from and expenses for these fields, demand deposit interests and other directly related incomes are also eligible for corporate income tax incentives.
    • Enterprises having investment projects eligible for corporate incentives for being located in geographical areas eligible for investment incentives (including also industrial parks, economic zones and hi-tech parks), incomes eligible for corporate incentives are all incomes from their production and business activities in such geographical areas, except:
      • Incomes from transfer of capital, transfer of capital contribution right; incomes from transfer of real estate, incomes from transfer of project of investment, transfer of right to participate in project of investment, transfer of right to explore, process minerals; incomes from business and production activities conducted outside Vietnam.
      • Incomes from the exploration and extraction of petroleum and other rare resources and incomes from mineral extraction.
      • Incomes from services subject to special excise duty according to the Law on Special excise duty.
    • The tax incentives are applied for enterprises can be the tax rate incentives or tax exemption, tax payable reduction. A profit enterprise can get one of the above tax incentives or all of them. It is depend on the specific cases.
    • Tax incentives for new project:

      The new investment projects will be applied the tax incentives if they meet the conditions mentioned in the current tax regulations. For example:
      Tax exemption for 2 years and a 50% reduction of payable tax amounts for 4 subsequent years are applicable to incomes from the execution of new projects of investment in industrial parks

    • Projects of expansion investment mentioned at this Point must satisfy one of the following criteria:
      • The historical cost of fixed assets added when the project is completed and commissioned is at least VND 20 billion, for expanded investment projects in the fields eligible for enterprise income tax incentives or VND 10 billion, for expanded investment projects in geographical areas with difficult or particularly difficult socio- economic conditions
      • Cost of fixed assets increases by at least 20% of the cost before investment.
      • The design capacity after expansion investment is at least 20% higher than the design capacity stated in the techno-economic study report prior to the initial investment.
    • Tax incentives for expansion project

      If satisfying one of the three conditions prescribed at this Point, enterprises having investment projects that develop the operating investment projects such as expansion of production scale, increase of capacity and renewal of production technology (commonly referred to as projects expansion investment) in the fields or geographical areas eligible for EIT incentives under Vietnam’s tax regulation. are optional to enjoy EIT incentives for their operating projects for the remaining duration (including tax rate and tax exemption or tax reduction duration (if any)) or apply tax exemption or tax reduction duration for additional incomes brought about by the expansion investment (not eligible for preferential tax rates) equalling to the tax exemption or tax reduction duration applicable to projects of new investment in the same geographical area or field eligible for EIT incentives. If the enterprises choose to enjoy EIT incentives for their operating projects for the remaining duration, projects of expansion investment must belong the fields or geographical areas eligible for EIT incentives under the tax regulation.

    Annual offshore remittance of profits

    • Foreign investors may annually remit abroad profits they are shared or earn from their direct investment in Vietnam at the end of a fiscal year after enterprises in which they make investment have fulfilled financial obligations towards the Vietnamese State under law and submitted audited financial statements and enterprise income tax finalization declarations of that year to managing tax offices.
    • The foreign organization investors can get the tax exemption for the profit distributed and  transferred from the subsidiary located in Vietnam. Because the Vietnam subsidiary paid the corporate income tax.

    Loss Carryforward

    Enterprises that suffer a loss after making tax finalization may carry forward continuously the whole loss to subsequent years’ taxable incomes (taxable incomes exclusive of tax-exempt incomes). The maximum duration for loss carry-forward is 5 consecutive years, counting from the year following the year the losses arise.

    Enterprises may temporarily clear their losses of a year against taxable incomes of the quarters of the following year upon making quarterly declarations for temporary tax payment and officially carry forward these losses in the following year after making annual tax finalization declarations.

    Enterprises that have a loss arising in a certain quarter of a fiscal year may carry forward such loss from this quarter to the following quarters of that fiscal year. When making enterprise income tax finalization, enterprises shall determine the loss of the whole year and continuously clear the whole loss against their taxable incomes of the years following the year when the loss arises in accordance with the above regulations.

    Enterprises shall determine by themselves losses to be cleared against taxable incomes on the above principle. In the loss carry-forward duration, newly arising losses (excluding losses carried forward from the previous period) may be fully carried forward for not more than 5 consecutive years, counting from the year following the year the losses arise.

    When the tax authority examines and inspects enterprise income tax finalization detects a loss amount which an enterprise is allowed to carry forward is different from the loss amount determined by the enterprise itself, the loss amount allowed to be carried forward shall be determined based on the competent agency’s conclusion, and fully carried forward for not more than 5 consecutive years, counting from the year following the year the losses arise.

    Past the 5-year time limit, arising losses not yet fully carried forward are not allowed to be cleared against the following years’ incomes.

    Filing of Tax Returns

    According to business result, the taxpayers shall make the temporary payment of CIT not later than 30th day of the quarter following the quarter in which tax is incurred; they shall not submit the provisional CIT declaration quarterly. Year – end corporate income tax payment is due to the 90th day of the first quarter of the following year. This is the due date of yearly corporate income tax declaration.

    Summary of Income Tax for Company

    Entity Type Almost companies and branches Enterprises of petroleum prospecting, exploration and exploitation  The prospecting, exploration and extraction of precious and rare natural resources
    Income Tax Rate 20% 32% - 50%. Depend on the decision of the Ministry of Finance   40% - 50% Depend on the area

  • Hong Kong Office

    : Unit 706, 7/F, South Seas Centre Tower 2, No.75 Mody Road, Tsim Sha Tsui East, Hong Kong / Tel:(852)3913-9500 / Fax:(852)2170-1919

  • Singapore Office

    : 3 Shenton Way #16-08 Shenton House Singapore 068805 / Tel: (65)6542-2309 / Fax : (65)6221-4376

  • Vietnam Hanoi Office

    : 13F, Charmvit Tower, 117 Tran Duy Hung Street, Cau Giay District, Hanoi, Vietnam / Tel:(84)34-8218-444

  • Vietnam Ho Chi Minh City Office

    : 15th Floor R.1508, Vincom Center Tower, 72 Le Thanh Ton Street, Ben Nghe Ward District 1, Ho Chi Minh city

  • Korea Office

    : 100, Cheonggyecheon-ro, Jung-gu, Seoul, Republic of Korea / Tel : (82)70-7436-5844 / Fax : (82)2-713-0056

  • Taiwan Office

    : 18F-2, No.163, Sec. 1, Keelung Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C) / Tel : (886)988-057-215

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