ENTERPRISES ENTITLED TO 30% CORPORATE INCOME TAX CUT

Resolution 116/2020 of the National Assembly on 30% reduction of corporate income tax (CIT) in 2020 officially took effect from August 3, 2020.

Previously, at a National Assembly gathering on June 19, the resolution was adopted with 442 votes of aye on a total of 446 votes.

Beneficiaries include enterprises established under the law of Vietnam; entities established under the Law on Cooperatives; non-business entities established under the law of Vietnam; and other entities engaged in production and trade of commodities and services established under the law of Vietnam.

The 30% CIT reduction is applied to all incomes that meet tax cut conditions specified in the resolution, not excluding incomes ineligible for incentives under the Law on Corporate Income Tax such as income from real estate transfer, capital transfer, mining income and income from services subject to special consumption tax.

The CIT reduction is only applied to income generated in 2020 and the total revenue value does not exceed VND200 billion in the year. Entities within this scope are considered to be vulnerable to the negative impacts of Covid-19.

In case they are established in 2020 (the tax period in 2020 is less than 12 months), it is necessary to base on actual revenue value in 2020.

The Ministry of Finance is also urgently gathering comments on the draft decree of the Government detailing the implementation of the National Assembly's Resolution on CIT reduction in 2020 for enterprises, cooperatives and non-business entities.

The draft decree specifies some contents like a 30% reduction of payable income tax on revenue of not more than VND200 billion in 2020 or tax authorities are not required to notify the business of accepting tax reduction unless they are ineligible.

Source: VCCI


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