The Ministry of Finance said that according to Clause 4, Article 15 of the Law on Corporate Income Tax, newly established enterprises from business households as prescribed in Clauses 2 and 3, Article 10 will be exempted from corporate income tax for 2 consecutive years from the time taxable income arises.

In implementing the provisions of the Law on Corporate Income Tax, the Ministry of Finance proposes: Enterprises specified in Clauses 2 and 3, Article 10 of this Decree newly established from business households (including individual businesses converting to enterprises) are exempted from corporate income tax for 2 consecutive years from the time of taxable income.

Clauses 2 and 3, Article 10 of the draft decree clearly state: The tax rate of 15% applies to enterprises with total annual revenue not exceeding 3 billion VND. The tax rate of 17% applies to enterprises with total annual revenue over 3 billion VND but not exceeding 50 billion VND.

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Proposal to exempt corporate income tax for the first two years for enterprises converted from households and individual businesses. Photo: Nam Khanh.

The tax exemption period is calculated continuously from the first year the enterprise has taxable income; in case there is no taxable income in the first 3 years, from the first year of revenue, the tax exemption period is calculated from the fourth year.

In case the first tax period of an enterprise has a tax-exempt operating period of less than 12 months, the enterprise can choose to enjoy tax exemption immediately in that tax period or register with the tax authority the tax exemption period starting from the next tax period.

In case an enterprise registers for a tax exemption period in the next tax period, it must determine the tax payable for the first tax period to pay to the state budget according to regulations.

After the tax exemption period specified in this clause, in case an enterprise implements an investment project in a tax-incentive industry, trade or location, it will continue to enjoy the corresponding incentives (preferential tax rates and tax exemptions and reductions) as prescribed in Articles 16, 17 and 18 of the Decree.

After the tax exemption period and tax incentive period (if any) prescribed in this clause expire, enterprises shall apply the corporate income tax rate prescribed in clauses 2 and 3, Article 10 of the Decree.

Business households and business individuals must meet the conditions for registration and operation according to the provisions of law, and have at least 12 consecutive months of production and business operation from the date of first issuance of the business registration certificate.

Enterprises eligible for tax exemption and incentives under this provision must be enterprises registering for business for the first time. This policy does not apply to newly established enterprises whose legal representative (except in cases where this person is not a capital contributing member), general partner, or person with the highest capital contribution has participated in business activities in a similar role at an enterprise that is operating or has been dissolved within 12 months from the date of establishment of the new enterprise.

Allowances, subsidies, and income exempt from personal income tax Salaries and wages are income subject to personal income tax (PIT), but there are also some allowances and subsidies that are not subject to tax.

Source: https://vietnamnet.vn/ho-kinh-doanh-chuyen-len-doanh-nghiep-duoc-uu-dai-gi-2421603.html