Decree 218 guiding the implementation of the amended CIT law has just been issued, and is effective from 1 January 2014. The circular to implement this decree is still awaited. Some notable changes include:1. CIT rate reduced

• The standard CIT rate is reduced from 25% to 22% in 2014, and further reduced to 20% from 2016. For enterprises with total revenues of less than VND20 billion (equivalent to approximately US$1 million), the 20% rate will apply from 2014.

2. CIT incentives

• Large manufacturing projects (except for those manufacturing products subject to special sales tax or exploiting mineral resources) are eligible for CIT incentives if the projects meet either of the following criteria:

(i) having minimum investment capital of VND 6,000 billion, disbursed within 3 years after being licensed, and having minimum revenue of VND 10,000 billion/annum for at least 3 years after the first year of generating revenue; or

(ii) having minimum investment capital of VND 6,000 billion, disbursed within 3 years after being licensed, and using minimum 3,000 headcount for at least 3 years after the first year of generating revenue.

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