From 01/01/2016: the Corporate Income Tax rate of 20% will be applied

On 26/12/2013, the Government issued Decree No. 218/2013/ND-CP regulating in detail and guiding on the implementation of the Law on Corporate Income Tax (CIT).

Accordingly, from 01/01/2016, all subjects who currently are applied the CIT rate of 22% will officially be applied the tax rate of 20%. The CIT of 20% for People’s credit fund and microfinance organizations will decrease to 17%.

Before that, the CIT rate applies to all business is still 22%. Especially, the CIT of 20% will apply to business which has annual total revenue of no more than VND 20 billion (including cooperatives, manufacturing entities, trading goods and services entities). Accordingly, the basis to identify whether the business subjected to the CIT rate of 20% mentioned above is their last year total revenue.

The CIT rate from 32% to 50% is applied to the exploration, exploitation of oil, gas and valuable resources in Vietnam. In detail, the 40% or 50% CIT rate apply to resources mines (including: platinum, gold, silver, tin, wolfram, antimony, valuable stones, rare earth or mine which has more than 70% of its area which is in extreme socio-economic difficulties  area and is on the list of areas enjoying CIT incentives according to legal regulation.

For exploitation, exploration of oil and gas, depending on the position, mining conditions and its deposit, the Prime Minister will decide the CIT rate to each project and business entity according to the proposal of Minister of Finance.

This Decree will take effect from 15th February, 2014 and will apply to the tax period of 2014 and forward.   

                                                                                                                            Source: Translated from Vietnamese version