The Ministry of Finance issued Circular 96/2015/TT-BTC on 22 June guiding changes set out in Decree 12/2015 and amending previous CIT Circulars, i.e. 78/2014, 119/2014 and 151/2014. Circular 96 is effective from 6 August and applies for tax year 2015 onwards.

In case a company’s financial year is not a calendar year, there are various transitional provisions.

Notable changes include:

1. CIT incentives

• New investment projects included in the list of industrial support products prioritized for development (i.e. the list currently promulgated under Decision 1483/QĐ-TTg dated 26/08/2011) are entitled to a 10% CIT rate for 15 years, 4 years CIT exemption and 9 years CIT reduction if they meet one of the following conditions:

– The products support the high technology sector; or
– The products support, inter alia, the garment, textile and footwear, IT and automobile sectors, and are not produced domestically as at 1 January 2015, or if produced domestically, they do meet the quality standards of the EU or equivalent.

• The incentive regime is also amended to align with the Law on Investment, by allowing investment projects to access any more favorable tax incentives available under an amended or new law on CIT for the remaining project period, from tax year 2015. This entitlement is specifically applicable to the following cases:

– Expansion projects licensed or implemented during the period from 2009 to 2013 which were not entitled to any CIT incentives previously.
– Investment projects commencing operations in industrial zones during the period from 2009 to 2013 which were not entitled to any CIT incentives previously.
– Investment projects located in areas which were not previously designated as encouraged.

Please click PwC Vietnam Newsbrief_Circular 96 guiding Decree 12 and amending various_ Circulars on CIT_EN for more information and PwC Vietnam Newsbrief_Circular 96 guiding Decree 12 and amending various_ Circulars on CIT_VIE for Vietnamese version.

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