Tax Alert - Decree 57 on CIT Incentives to Supporting Industries
June 2021 | KPMG in Vietnam
According to the provisions of Law No. 71/2014/QH13 dated 26 November 2014 (“Law 71”), which took effect from 1 January 2015, income from new investment projects engaged in the manufacturing of products of ‘encouraged supporting industries’ are eligible for the highest available corporate income tax (“CIT”) incentives, which include: a CIT rate of 10% for 15 years, 4 years of CIT exemption and a 50% reduction of payable tax for the 9 subsequent years. As there is no transitional provision, investment projects that are engaged in manufacturing of supporting industry (SI) products that were implemented before 1 January 2015 are not entitled to the CIT incentives as per Law 71. In order to ensure equality in investment incentives for supporting industry (“SI”) projects implemented before 1 January 2015, the Government has issued Decree 57/2021/ND-CP dated 4 June 2021, allowing the extension of the CIT incentive scheme to SI projects (including both new investment projects and expanded investment projects) implemented before 1 January 2015.
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