Official Letter 300/TCT-CS 2025 on Corporate Income Tax Policy.

MINISTRY OF FINANCE GENERAL DEPARTMENT OF TAXATION _____________ No. 300/TCT-CS Regarding Corporate Income Tax Policy

SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ________________________ Hanoi, January 17, 2025

 

To: Tax Department of Hai Phong City.

The General Department of Taxation has received Official Letter No. 4372/CTHPH-TTHT dated November 1, 2024, from the Tax Department of Hai Phong City regarding the tax incentives for corporate income tax for supporting industrial products. On this matter, the General Department of Taxation provides the following opinion:

• According to Clause 5, Article 1 of Law No. 71/2014/QH13 dated November 26, 2014, amending and supplementing several provisions of tax laws (effective from January 1, 2015), it is stipulated:

"5. Add points (d) and (e) to Clause 1, Article 13 as follows:

(d) The income of enterprises from implementing new investment projects producing products listed in the priority development list of supporting industrial products, meeting one of the following criteria:

• Supporting industrial products for high technology as defined by the Law on High Technology;

• Supporting industrial products for the production of products in the sectors: textiles - apparel; leather - footwear; electronics - information technology; automobile assembly and manufacturing; mechanical engineering products, which, by January 1, 2015, have not yet been produced domestically or have been produced but must meet the technical standards of the European Union (EU) or equivalent.

The government shall issue regulations on the list of supporting industrial products that are prioritized for development as specified in this point."

• According to Article 4 of Circular No. 21/2016/TT-BTC dated February 5, 2016, of the Ministry of Finance guiding VAT declaration and corporate income tax incentives in accordance with Decree No. 111/2015/NĐ-CP dated November 3, 2015, of the Government on the development of supporting industries, it is stipulated:

"Article 4. Corporate Income Tax Incentives

Corporate income tax incentives apply to the income of enterprises from implementing supporting industrial product manufacturing projects from January 1, 2015, meeting the conditions specified in Law No. 71/2014/QH13 dated November 26, 2014, and related guiding documents, provided that the competent authority has issued a certificate of preferential treatment for the manufacturing of supporting industrial products (referred to as the preferential certificate).

The process and procedures for certifying incentives and post-implementation checks for projects manufacturing products in the priority development list of supporting industrial products shall follow the regulations in Circular No. 55/2015/TT-BCT dated December 30, 2015, of the Ministry of Industry and Trade.

The preferential certificate for the production of supporting industrial products is the basis for applying corporate income tax incentives. The incentive rate, the starting time of application, and the continuation of the incentives will follow the regulations of corporate income tax laws..."

• According to Clause 3, Article 10 of Circular No. 96/2015/TT-BTC dated June 22, 2015, of the Ministry of Finance (amending and supplementing Clause 5, Article 18 of Circular No. 78/2014/TT-BTC dated June 18, 2014, of the Ministry of Finance), it is stipulated:

"b) New investment projects eligible for corporate income tax incentives under the new investment category do not include the following cases:

• Investment projects resulting from splitting, dividing, merging, consolidating, or converting business forms in accordance with the law;

• Investment projects resulting from ownership changes (including cases where a new investment project is implemented but continues to inherit assets, business locations, or business activities of the previous enterprise; or the acquisition of an ongoing investment project).

Enterprises established or having investment projects due to changes in business form, ownership transfer, splitting, dividing, merging, or consolidating are entitled to inherit corporate income tax incentives for the previous business or project before the conversion, splitting, merging, or consolidation, provided they continue to meet the conditions for corporate income tax incentives."

• According to Articles 11 and 12 of Circular No. 96/2015/TT-BTC dated June 22, 2015, of the Ministry of Finance:

"Article 11. Amendments and Supplements to Some Provisions of Article 19 of Circular No. 78/2014/TT-BTC as follows:

1. Amend Clause 1, Article 19 of Circular No. 78/2014/TT-BTC as follows:

"1. The preferential tax rate of 10% for a period of fifteen (15) years applies to:

g) Income from the implementation of a new investment project producing products listed in the priority development list of supporting industrial products that meet one of the following criteria:

• Supporting industrial products for high technology as defined by the Law on High Technology;

• Supporting industrial products for the production of products in the sectors: textiles - apparel; leather - footwear; electronics - information technology; automobile assembly and manufacturing; mechanical engineering products, which, by January 1, 2015, have not yet been produced domestically or have been produced but must meet the technical standards of the European Union (EU) or equivalent."

...

Article 12. Amendments and Supplements to Some Provisions of Article 20 of Circular No. 78/2014/TT-BTC as follows:

1. Amend point a, Clause 1, Article 20 of Circular No. 78/2014/TT-BTC as follows:

"1. Exemption from tax for four years, and a 50% reduction in the amount of tax payable for the next nine years for:

a) Income from the implementation of an investment project as prescribed in Clause 1, Article 19 of Circular No. 78/2014/TT-BTC (amended and supplemented in Clause 1, Article 11 of this Circular)."

• According to Article 1 of Decree No. 57/2021/NĐ-CP dated June 4, 2021, of the Government supplementing point (g) of Clause 2, Article 20 of Decree No. 218/2013/NĐ-CP (as amended in Clause 20, Article 1 of Decree No. 12/2015/NĐ-CP) on corporate income tax incentives for supporting industrial product manufacturing projects:

"g) Enterprises with investment projects (new and expanded investments) producing products listed in the priority development list of supporting industrial products, implemented before January 1, 2015, and meeting the conditions for supporting industrial product manufacturing projects according to Law No. 71/2014/QH13, and having received a certificate of preferential treatment for manufacturing supporting industrial products from the competent authority, are entitled to corporate income tax incentives as follows:

g1) In cases where an enterprise has a supporting industrial product manufacturing project, and the income from this project has not yet received corporate income tax incentives, it will be entitled to the incentives from the tax period in which the competent authority issues the preferential certificate for the manufacturing of supporting industrial products;

g2) In cases where an enterprise has a supporting industrial product manufacturing project, and the income from this project has already received full corporate income tax incentives based on other preferential conditions (other than those for supporting industrial product manufacturing projects), it will be entitled to corporate income tax incentives according to the supporting industrial product manufacturing project conditions for the remaining period from the tax period in which the competent authority issues the preferential certificate for the manufacturing of supporting industrial products."

Based on the above regulations, the preferential certificate for the production of supporting industrial products is the basis for applying corporate income tax incentives for supporting industrial products. The timing of the corporate income tax incentives for supporting industrial products is based on the date the product receives the preferential certificate from the Ministry of Industry and Trade.

On July 30, 2024, the Ministry of Industry and Trade issued Certificate No. 5542/GXN-BCT confirming that products manufactured in the General Electric Hai Phong Co., Ltd project are included in the priority development list of supporting industrial products. In the case of the General Electric Hai Phong Co., Ltd project, if it generates income from producing supporting industrial products and meets the conditions for corporate income tax incentives for supporting industrial products, it will be entitled to incentives for income generated from the supporting industrial product manufacturing project for the remaining period according to the regulations.

The Tax Department of Hai Phong City is requested to base its tax obligations on legal provisions and the actual situation at the enterprise."

Recipients: As above; Deputy Director General Dang Ngoc Minh (for report); Departments: PC - TCT, KK&KTT; TCT Website; Archive VT, CS (3b).

On behalf of the GENERAL DIRECTOR For the Director of the Tax Policy Department DEPUTY DIRECTOR         Manh Thi Tuyet Mai

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