Official Letter 718/CTBDI-TTHT on Corporate Income Tax Incentives.
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GENERAL DEPARTMENT OF TAXATION
Binh Dinh Tax Department
No. 718/CTBDI-TTHT
Regarding Corporate Income Tax Incentives
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SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
Binh Dinh, February 27, 2025
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To:
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Fujiwara Binh Dinh Co., Ltd.
Address: 53 Dang Van Ngu, Hai Cang Ward, Quy Nhon City, Binh Dinh Province
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The Binh Dinh Tax Department has received Official Letter No. 1002-03/CV-FUJI dated February 10, 2025, from Fujiwara Binh Dinh Co., Ltd. regarding “Interest on Savings Receiving Corporate Income Tax Incentives During the Period the Business Enjoys Incentives.”
Regarding this issue, the Binh Dinh Tax Department provides the following opinions:
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According to Clause 2, Article 10 of Circular No. 96/2015/TT-BTC dated June 22, 2015, by the Ministry of Finance, enterprises with investment projects eligible for corporate income tax incentives due to meeting investment sector and investment area conditions are as follows:
“2. Amendment of Clause 4, Article 18 of Circular No. 78/2014/TT-BTC as follows:
“4. Enterprises with investment projects eligible for corporate income tax incentives due to meeting the conditions of preferential investment sectors and investment areas will be entitled to incentives as follows:
a) Enterprises with investment projects eligible for corporate income tax incentives due to meeting the preferential investment sector conditions, the income from the preferential investment sectors, including income from the liquidation of scrap, by-products of products from the preferential investment sector, exchange rate differences directly related to revenue and costs of the preferential investment sector, interest from demand deposits, and other directly related income, will also be eligible for corporate income tax incentives.
b) Enterprises with investment projects eligible for corporate income tax incentives due to meeting preferential investment area conditions (including industrial zones, economic zones, high-tech zones) will have all income generated from production and business activities in the preferential area eligible for corporate income tax incentives, except for the income specified in Points a, b, and c of Clause 1 of this Article.”
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According to Clause 1, Article 10 of Circular No. 96/2015/TT-BTC dated June 22, 2015, by the Ministry of Finance, corporate income tax incentives will not be applied in the following cases:
“1. Amendment of Clause 3, Article 18 of Circular No. 78/2014/TT-BTC as follows:
“3. Corporate income tax incentives and the 20% tax rate (including enterprises subject to the 20% tax rate under Clause 2, Article 11 of Circular No. 78/2014/TT-BTC) will not apply to the following income:
a) Income from capital transfer, transfer of capital contributions; income from real estate transfer (except for income from investment in social housing as stipulated in Point d, Clause 3, Article 19 of Circular No. 78/2014/TT-BTC); income from investment project transfers, rights to participate in investment projects, and rights to explore and exploit minerals; income from activities outside Vietnam.
b) Income from searching, exploring, exploiting oil, gas, and other rare resources, and income from mining activities.
c) Income from providing services subject to special consumption tax under the Special Consumption Tax Law.”
Based on the regulations mentioned above, if the enterprise has an investment project eligible for corporate income tax incentives due to meeting the investment area conditions (Nhon Hoi Economic Zone), the interest earned from bank deposits generated from production and business activities within the investment project in the Nhon Hoi Economic Zone will also be eligible for corporate income tax incentives.
The Binh Dinh Tax Department provides this response to Fujiwara Binh Dinh Co., Ltd. for your information and implementation.
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Recipients:
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ON BEHALF OF THE DIRECTOR OF THE TAX DEPARTMENT
DEPUTY DIRECTOR
Tran Huu Danh
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See details here.