The purpose of preferential corporate income tax (CIT) policy is to encourage, attract investment, and support businesses in certain industries. To benefit from the CIT incentives, businesses must meet specific standards and conditions. Here are the key details:
1. Applicable Tax Rate of 10%
According to Circular 96/2015/TT-BTC, the preferential tax rate of 10% is applied throughout the operation period:
- for the income generated by businesses in the field of education and training,…
To qualify for CIT incentives, businesses need to meet the conditions specified in Circular 78/2014/TT-BTC, which include:
- Implementing accounting, invoices, documents, and submitting CIT according to declarations.
- Separately calculating income from production and business activities that are eligible for tax incentives. This applies to businesses engaged in multiple business activities.
- In cases where a business is eligible for both tax rate incentives and tax exemption or reduction, the business can choose only one option that is most favorable.
2. Tax Exemption and Reduction Period
According to Circular 78, tax exemption and reduction incentives are applied as follows:
- Full tax exemption for four years;
- A 50% reduction in the tax amount payable for the following five years.
These provisions apply to businesses in the field of socialization in areas that are not on the list of economically and socially difficult or extremely difficult regions.
3. Standard Requirements for Foreign Language Centers
Before meeting the conditions for CIT incentives mentioned in points 1 and 2, foreign-funded foreign language centers must meet certain criteria related to their facility’s scale. According to Decision 1466/QĐ-TTg, the facility must meet the following standards:
- Maximum student-to-teacher ratio per class: 25 students per teacher per class;
- Minimum classroom area: 1.5m2 per student per class.
In addition, the language center must comply with the conditions set by the socialization policy in the field of education and training, issued by the People’s Committee of the province/city where the center is headquartered.
In summary, foreign language centers must first meet the criteria regarding their scale. Once these criteria are met, they can then consider meeting the conditions required to enjoy CIT incentives.
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