To: Supertex Knitting Co., Ltd. - Tan Lac
Tax Code: 5400520355Địa chỉ: Xóm Tân Tiến - xã Thanh Hối - huyện Tân Lạc - tỉnh Hòa Bình.
Address: Tan Tien Hamlet, Thanh Hoi Commune, Tan Lac District, Hoa Binh Province
The Tax Department of Hoa Binh Province has received Official Letter No. 79/CV-SPT-TL dated December 20, 2024, from Supertex Knitting Co., Ltd. (referred to as the Company) regarding corporate income tax (CIT) incentives. The Tax Department provides the following guidance:
According to Clause 4 and Clause 6 of Article 19 of Circular No. 78/2014/TT-BTC dated June 18, 2014, of the Ministry of Finance, guiding the implementation of Decree No. 218/2013/ND-CP dated December 26, 2013, of the Government on the Law on Corporate Income Tax, the regulations state:
“4. A preferential tax rate of 20% for a period of ten years (10 years) applies to:
Income from enterprises implementing new investment projects in areas with difficult socio-economic conditions as specified in the Appendix attached to Decree No. 218/2013/ND-CP of the Government.
Enterprises implementing new investment projects in preferential tax fields or areas from January 1, 2016, shall apply a preferential tax rate of 17%.
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The preferential tax rate applies continuously from the first year in which the enterprise has income from a new investment project eligible for tax incentives.”
According to Article 6 of Circular No. 151/2014/TT-BTC dated October 10, 2014, of the Ministry of Finance, guiding the implementation of Decree No. 91/2014/ND-CP dated October 1, 2014, which amends and supplements some provisions of various tax decrees:
“Article 6. Amendments and supplements to Clause 3, Article 20, Circular No. 78/2014/TT-BTC as follows:
“3. Exemption from tax for 2 years and a 50% reduction in tax for the next 4 years for income from new investment projects specified in Clause 4, Article 19, Circular No. 78/2014/TT-BTC dated June 18, 2014, and income of enterprises from new investment projects in industrial zones (except for industrial zones located in areas with favorable socio-economic conditions).”
According to Circular No. 96/2015/TT-BTC dated June 22, 2015, of the Ministry of Finance, which provides guidance on corporate income tax at Decree No. 12/2015/ND-CP dated February 12, 2015, of the Government, implementing the amended and supplemented provisions of several laws and decrees on tax:
In Clause 1, Clause 3 of Article 10 it is specified:
"Article 10. Amendments and supplements to some provisions of Article 18, Circular No. 78/2014/TT-BTC (already amended in Article 5 of Circular No. 151/2014/TT-BTC) as follows:
Amend Clause 3 of Article 18, Circular No. 78/2014/TT-BTC as follows: “3. Corporate income tax incentives and the 20% tax rate (including businesses subject to the 20% tax rate according to Clause 2, Article 11, Circular No. 78/2014/TT-BTC) shall not apply to the following incomes:
Income from capital transfer, transfer of capital contributions; income from the transfer of real estate (except for income from the business of social housing as specified in Point d, Clause 3, Article 19, Circular No. 78/2014/TT-BTC); income from the transfer of investment projects, transfer of investment rights, transfer of mining rights; income from production and business activities outside Vietnam. Income from exploration, mining, and exploitation of oil, gas, rare minerals, and income from mining activities. Income from business activities in services subject to excise tax as defined by the Law on Excise Tax.”
Implementation and guidance on tax incentives:
According to the regulations, the Company must self-determine the conditions for tax incentives, preferential tax rates, tax exemption periods, and tax reductions to self-declare and self-settle tax with the tax authority.
If the Company’s ongoing investment project meets the conditions as a new investment project (under the guidance of Clause 3, Article 10, Circular No. 96/2015/TT-BTC), located in an area with difficult socio-economic conditions as per the law, then the Company’s income from this new investment project will be eligible for preferential tax rates and tax exemptions and reductions as outlined above (a 17% preferential tax rate for 10 years, with 2 years of tax exemption and a 50% tax reduction for the next 4 years). No tax incentives apply to incomes specified in Clause 1, Article 10 of Circular No. 96/2015/TT-BTC.
The Tax Department of Hoa Binh Province responds for the Company to be informed and act accordingly.
See details here.