The government on the 4th approved “EITI”) for projects producing prioritized industrial supporting products (“PMPSIP”) as set out in Decree 218 detailing and guiding the implementation of the 1997 Corporate Income Tax Act (“LOCIT”).
1. Conditions for applying for EITI
According to Article 20.2 (g) of Decree 218, companies are entitled to tax breaks if they meet the following conditions:
(i) have investment projects that manufacture products that are on the list of prioritized industrial supporting products for development that were carried out before January 1, 2015;
(ii) meet the conditions of the PMPSIP in accordance with the law amending and supplementing a number of articles of the Tax Law No. 71/2014 / QH13 of November 26, 2014;
(iii) Have received Certificates of Incentive Production of Industrial Supportive Products (“CIPSIP”) from the Competent Authorities.
2. Cases of application of EITI
(i) is not yet eligible for the EITI, the EITI will apply from the tax period granted to CIPSIP.
(ii) has already enjoyed all of the EITIs under other preferential rates (in addition to the preferential rates for PMPSIP), the EITI will be applied for the remaining time from the tax period granted to CIPSIP.
(iii) EITI enjoys other preferential terms (in addition to the preferential terms for PMPSIP), the EITI will apply from the tax period granted to CIPSIP.
3. Determination of the remaining preferential time according to paragraphs 2. (ii) and 2 (iii)
The incentive period is determined by the EITI period, which is the PMPSIP minus the number of years of tax exemption, the number of years of tax relief and the number of years of taking advantage of incentives under other preferential conditions. Special:
(i) The remaining period of tax exemption is the period of tax exemption under the terms of the PMPSIP, minus the period of tax exemption for which incentives have already been granted under other preferential conditions;
(ii) the remaining tax relief period is the tax relief period under the other preferential incentive conditions, minus the tax relief period already benefiting from other preferential incentives;
(iii) The remaining period of validity of the preferential tax rate corresponds to the duration of the tax incentives under the conditions of the use of incentives under other preferential conditions, minus the time of the already used tax incentives under other preferential conditions.
Decree 57 came into force on June 4, 2021.
DISCLAIMER
This article is NOT intended as legal advice. Readers are advised to hire a qualified lawyer if they wish to seek legal advice. VCI Legal assumes no responsibility in the event that a reader, after reading this article, interprets / applies the regulations without engaging a qualified lawyer. We are of course very happy to be accepted and contacted via (Email protected) if you have any questions.