Corporate income tax reduction comes into effect
Resolution 116/2020/QH14 granting a reduction of 30 per cent on corporate income tax (CIT) for eligible enterprises officially came into effect on Monday.
The tax cut is a major effort to help companies overcome the negative impacts of the COVID-19 pandemic. — baobinhduong.vn
The policy is a major effort to help companies overcome the negative impacts of the COVID-19 pandemic on business operations.
Under the resolution, all enterprises, co-operatives, agencies and organisations established under Vietnamese law and generating income of no more than VND200 billion (US$8.58 million) a year are eligible. The 30 per cent reduction is only applicable to income generated in 2020.
Enterprises formed in 2020 are required to distribute revenues according to real time business operation during the year.
According to the Ministry of Finance, by the end of 2019, Viet Nam had a total of 760,000 firms in operation and 97 per cent of which are small- and medium-sized enterprises, playing an irreplaceable role in economic development and social stability in Viet Nam.
The Ministry also estimates a loss of approximately VND23,000 billion in State revenues due to the CIT reduction programme. However, it lends a helping hand to businesses facing difficulties amid the pandemic, while facilitating business recovery and enhancing competitiveness. — VNS