New Decree Introduces Preferential CIT Rate
Companies with investment projects which meet certain conditions will now be entitled to a favourable rate of Corporate Income Tax (“CIT”), following the introduction of a new Decree earlier this month.
The conditions are set out in Decree No. 57/2021/ND-CP (“Decree 57”). Issued on 4 June, Decree 57 took immediate effect and supplements Article 20.2(g) of Decree No. 218/2013/ND-CP (amended by Decree No. 12/2015/ND-CP) on favourable CIT applied to ancillary production projects.
Companies with an investment project – including new or expanded projects – that meet the following three conditions are entitled to a favourable CIT rate. This applies to companies which: (1) manufacture products contained in the List of Ancillary Products preferable for development and implementation before 1 January 2015; (2) meet the conditions of an ancillary production project as outlined in Law No. 71/2014/QH13, and; (3) have been issued with a ‘Certificate of Producing Ancillary Products’. The details are as follows:
- Companies which have an ancillary production project but have not benefitted from favourable CIT will be entitled to the favourable rate for the tax period for which it was issued with a ‘Certificate of Producing Ancillary Products’;
- Companies with an ancillary production project who have benefitted from favourable CIT for reasons other than ancillary production shall be entitled to favourable CIT for the remaining period. This will be calculated from the tax period during which the enterprise was issued with the Certificate of Producing Ancillary Products, and;
- Companies with an ancillary production project whose is income is benefitting – at the moment – from favourable CIT for reasons other than ancillary production will be entitled to favourable CIT for the remaining period. This will be calculated from the tax period in which it was issued with the Certificate of Producing Ancillary Products.
For more information about Corporate Income Tax, and how to benefit from Decree 57, just contact our team on: contact@apflpartners.com
