The Ministry of Finance issued Circular 151/2014/TT-BTC (“Circular 151”) on 10 October 2014 guiding Decree 91/2014/ND-CP (“Decree 91”) regarding various changes on Corporate income tax, Value added tax, Personal income tax and tax administration. Circular 151 will take effect from 15 November 2014, except for the provisions relating to CIT which will apply for the 2014 tax year.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 and that do not constitute a new investment project and/or an expansion project are entitled to the same CIT incentives as the existing project for the remaining period. However, such treatment will apply from the 2014 tax year onwards (i.e. no retrospective application is allowed).

• For investment projects where the initial investment certificate application outlined multiple stages, if the stages are carried out in line with the timeline initially registered or subsequently extended based on approval from the competent authorities, each stage is entitled to the same CIT incentives as the first stage for the remaining period from 2014 onwards. No retrospective application is allowed.

• 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.

•For companies whose exported orientated CIT incentives were repealed as a result of Vietnam’s WTO commitments, Circular 151 allows affected companies to separately apply the most favorable preferential CIT rate and the most favorable exemption/ reduction.

This entitlement can be applied retrospectively. No penalty will be imposed in relation to revision of the CIT declaration. Any CIT overpayment resulting from the revision can be refunded or offset against future tax liabilities.

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