The Government issued Decree 91/2014/ND-CP (“Decree 91”) on 1 October 2014, amending current Decrees on Corporate income tax, Value added tax, Personal income tax and tax administration. Decree 91 will take effect from 15 November 2014, except for the provisions relating to CIT which will retrospectively apply for the 2014 tax year. Decree 91 reiterates and provides further guidance on the tax changes approved by the Government under Resolution 63 (please refer to our NewsBrief dated 29 August 2014).

1. Corporate income tax (“CIT”)
CIT incentives

• For enterprise entitled to tax incentives during the period 2009-2013, any additional profit derived from regular increases in machinery and equipment during this period are entitled to the same CIT incentives as the existing project for the remaining period.

Decree 91 is silent on how to define “regular” increase in machinery and equipment and how the new guidance applies to periods which have been subject to tax audit and assessed additional CIT due to expansion projects.

• For investment projects where the initial investment certificate application outlined multiple stages, profits derived from the subsequent investment stages (if carried out in line with the registered timeline) are entitled to the same CIT incentives as the first stage.

• The industrial zones qualifying for CIT incentives is expanded to include urban districts which have been established from rural districts from 1 January 2009 of Ho Chi Minh, Ha Noi, Hai Phong, Da Nang, Can Tho and provincial cities type 1.

• Alternative CIT incentives for companies whose CIT incentives based on export criteria were terminated as a result of Vietnam’s WTO commitments which were previously guided under Decree 122/2011/NDCP are repeated in Decree 91. However, it is indicated in Decree 91 that alternative preferential CIT rate and exemption/ reduction could be elected separately.

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