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1. What is the EIT?
Currently, there are no legal documents prescribe the specific definition of EIT. However, pursuant to the provisions prescribed in the Law on Enterprise income tax and other guiding documents, EIT can be understood in the simple way as follows:
EIT is the direct tax which has a direct effect on the taxable income of enterprises including incomes from production and services of goods and services in accordance with laws after the deduction of suitable and legal expenses relating to enterprise incomes.
The taxpayers of EIT are the organizations having incomes from goods production and service provision activities of enterprises prescribed by laws.
2. What is the rate of EIT?
|
No. |
Rate of EIT |
Applicable cases |
|
1 |
20% |
Enterprises established under laws of Vietnam having goods production and service provision activities (Except for the cases prescribed at the section 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12) |
|
2 |
32% -50% |
Activities of prospecting, exploring and exploiting oil and gas and other precious and rare natural resource in Vietnam (Except for the cases prescribed at the section 3, 4) |
|
3 |
50% |
Mines of mineral resources of platinum, gold, silver, tin, tungsten, antimony, gems and rare earths |
|
4 |
40% |
Mines with 70% or more of their assigned areas in localities with particularly difficult socio-economic conditions on the list of localities eligible for enterprise income tax incentives |
|
5 |
10% (Applied in 15 years) |
- Incomes of an enterprise from execution of new investment projects in extremely disadvantaged areas, economic zones or hi-tech zones; - New investment projects in the following areas: scientific research and technology development; application of high technologies given priority, environment protection... - Incomes of high-tech enterprises and agriculture enterprises applying high technologies. - Execution of new manufacturing projects (except for manufacturing of products subject to excise tax and mineral extraction projects) that satisfy any of the special criteria. - A new investment project for manufacture of products on the list of ancillary products given priority. - Execution of manufacturing projects, except for manufacturing of products subject to excise tax and mineral extraction projects in which investment is at least VND 12,000 billion... |
|
6 |
10% |
- Incomes of an enterprise's investment in the public sector fields such as education – training, vocational training, health care, culture, sports and environment. - An investment project on construction of social housing for sale, lease or lease purchase to the entities specified in Article 53 of the Law on Housing. - Incomes of a press agency from newspapers, including advertisements on newspapers; incomes of a publisher from publishing. - Incomes of an enterprise from: planting, caring and protection of forests; farming, husbandry, aquaculture in disadvantaged areas... - A cooperative from agriculture, forestry, aquaculture or salt production in areas other than disadvantaged areas or extremely disadvantaged areas. |
|
7 |
17% (Applied in 10 years) |
- New investment projects in disadvantaged areas - New investment projects in the following areas: production of high-class steel; production of energy-saving products; production of machinery and equipment serving agriculture, forestry, aquaculture or salt production; production of irrigation equipment... |
|
8 |
15% |
Enterprises from farming, husbandry, processing of agricultural and aquatic products in areas other than disadvantaged areas and extremely disadvantaged areas. |
|
9 |
17% |
Incomes earned by people's credit funds and microfinance institutions. |
|
10 |
EIT exemption for no more than 4 years and 50% reduction of CIT payable for no more than 9 subsequent years. |
- Incomes of an enterprise from execution of new investment projects in extremely disadvantaged areas, economic zones or hi-tech zones; - New investment projects in the following areas: scientific research and technology development; application of high technologies given priority, environment protection... - Execution of new manufacturing projects (except for manufacturing of products subject to excise tax and mineral extraction projects) that satisfy any of the special criteria. - A new investment project for manufacture of products on the list of ancillary products given priority. - Enterprises which make investment in the public sector fields such as education – training, vocational training, health care, culture, sports and environment. - High-tech enterprises and agriculture enterprises applying high technologies. |
|
11 |
EIT exemption for no more than 6 years and 50% reduction of EIT payable for no more than 13 subsequent years. |
- An investment project on construction of social housing for sale, lease or lease purchase to the entities specified in Article 53 of the Law on Housing. |
|
12 |
EIT exemption for no more than 2 years and 50% reduction of EIT payable for no more than 04 subsequent years. |
- Incomes of an enterprise from execution of new investment projects in extremely disadvantaged areas; - New investment projects in the following areas: production of high-class steel; production of energy-saving products; production of machinery and equipment serving agriculture, forestry, aquaculture or salt production; production of irrigation equipment, production of feeds for livestock and poultry; development of traditional trades. |
3. What are the deductible expenses for determining the taxable income of enterprises?
Pursuant to the Article 6, the Circular No. 78/2014/TT-BTC which is amended by the Circular No. 96/2015/TT-BTC, enterprises may deduct all expenses that fully satisfy the following conditions:
- Actual expenses arising in relation to production and business activities of enterprises;
- Expenses with adequate lawful invoices and documents as required by law.
- For expenses for purchase of goods or services with invoices valued at VND 20 million or more (VAT-inclusive prices) each, there must be non-cash payment documents;
- Not included in the non-deductible expenses for taxable income of enterprises such as: Fines from administrative violations; expenses which are offset by other funding sources; salaries, wages and bonuses payable of employers; remuneration paid to the founding members who are not directly involved in directing production and business...
Here are the details in the interest rate of EIT which is applied. Please call 1900.6192 for further support for any arising questions or problems.
