On 04 June 2021, the Government released Decree 57/2021/ND-CP (“Decree 57”), amending Decree 12/2015/ND-CP (“Decree 12”) regarding Corporate Income Tax (“CIT”) incentives for projects manufacturing prioritised supporting industry products (hereinafter referred to as "SI projects").
Decree 57 allows enterprises with investment projects (new investment and expansion investment) manufacturing products belonging to the List of prioritised supporting industry products, satisfying the conditions of SI projects according to Law 71/2014/QH13 and granted with a Certificate of CIT incentives for manufacturing prioritized supporting industrial products by a competent authority (“Certificate”) to enjoy CIT incentives for such SI projects, including those starting before 01 January 2015. Specifically:
- An enterprise having an SI project for which no CIT incentives have been applied shall be entitled to CIT incentives applicable to SI project from the tax period when the Certificate is granted.
- An enterprise having an SI project, incomes from which fully enjoyed or are currently enjoying CIT incentives under the other preferential conditions (instead of being as for an SI project), shall be entitled to CIT incentives applicable to such SI project for the remaining time from the tax period when the Certificate is granted. The remaining time is determined by the total period of CIT incentives entitlement applicable to SI project minus the number of years of tax exemption, the number of years of 50% tax reduction and the number of years of applying the preferential CIT rate that were used for satisfying other preferential conditions.
Previously, Decree 12 and guiding circulars only stipulated CIT incentives for SI projects implemented from 01 January 2015.
Decree 57 takes effect from 04 June 2021 and is applied retroactively. Specifically, if applying Decree 57 (including the cases where the tax audit or tax inspection has been carried out), an enterprise can reduce its CIT amount and the corresponding late interest payment (if any), it can request its managing tax authority to adjust the CIT payable per declared or per tax audit/tax inspection and the corresponding late interest payment (if any).
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