Ministry of Finance proposes tax incentives for SMEs and start-ups
Small- or medium-sized enterprises with an annual turnover of VND 20 billion or less would be likely to enjoy an incentive corporate income tax (CIT) of 17 percent for four years from January 1, 2017, through December 31, 2020, instead of the current 20 percent.
This is highlighted in a draft resolution recently prepared by the Ministry of Finance on tax measures to help businesses overcome difficulties and promote the development of the business community.
Accordingly, the criterion for identifying an enterprise entitled to 17-percent CIT would be turnover earned by such enterprise in the latest year.
Under the draft, this tax incentive would not be applicable to gains from capital or capital contribution right transfer; income from transfer of property (except social houses); income from transfer of investment projects and rights to participate in investment projects; income from transfer of mineral exploration and mining rights; income from production and business activities outside Vietnam; income from exploration and exploitation of oil, gas and other precious natural resources and mining activities; and income from provision of services subject to excise tax under law.
The draft also offers a 17-percent CIT rate to start-up businesses that develop innovative products for the 2017-20 period.
In addition, during 2017-20, enterprises earning profits from transfer of real estate, investment projects or rights to participate in investment projects would be allowed to offset their losses from their production or business operations with such profits.
Those implementing investment projects on provision of software services would enjoy the CIT rate of 10 percent for 15 years, CIT exemption for four years, and 50 percent CIT reduction for the subsequent nine consecutive years.
The Ministry also plans to clear tax debts totaling VND 8 trillion for taxpayers whose firms were dissolved or fell bankrupt before January 1, 2014.
The draft resolution is expected to be passed at the second session of the 14th National Assembly and come into force from the beginning of 2017.