Proposed to Reduce Corporate Income Tax to 15 – 17%

The Ministry of Finance is drafting a report submitting to the Government on the implementation of Resolution 35/2016 of the Government on a number of solutions to remove difficulties and tax obstacles for small and medium enterprises.

Accordingly, the Ministry is expected to submit two plans to prepare for comments of the Parliament at the 2nd Session (October 2016). In which, there are two options. Option 1 is applying the general tax rate of 17% from January 1st 2016 until the end of 2020 for small and medium enterprises. Option 2 is applying the general tax rate of 15% from January 1st 2016 to 2020. The general tax rate which is currently applied is 20%.

In addition, the Ministry of Finance also proposed the plan to reduce the corporate income tax for newly established start-up businesses with investment projects in the fields of preference or in underdeveloped areas, rural areas: applying tax rate of 10% in 15 years; tax exemption for 4 years and reduce 50% of the tax payable in the next 9 years for new projects.

Concerning the handling of the tax debt, deferred payment and fines, the Ministry of Finance proposed debt relief but must ensure equality among economic sectors, non-discrimination; remove the deferred payment for cases caused by force majeure that does not have the money to pay tax; remove tax debt, deferred payment and fines for companies that were dissolved, bankruptcy, business individuals are dead or missing.

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