1. Conditions and Procedures for Applying Corporate Income Tax Incentives:
According to Circular 78/2014/TT-BTC, the conditions for applying Corporate Income Tax (CIT) incentives are as follows:
- CIT Incentives is applicable only to enterprises that follow the accounting, invoicing, documentation, and CIT declaration procedures.
Enterprises meeting these conditions should proceed as follows:
- Self-determine the CIT incentive conditions, tax rates, tax exemption periods, tax reduction, and the amount of losses deducted from taxable income.
- Self-declare and settle CIT with the tax authorities.
2. Regulations Guiding the Determination of Income Eligible for Incentives
According to Circular 96/2015/TT-BTC, the income eligible for incentives includes:
a. For enterprises meeting investment incentive conditions:
- Income from investment incentive sectors;
- Income from the disposal of scrap or by-products of products in investment incentive sectors;
- Exchange rate differences directly related to the revenue and expenses of the incentive sectors;
- Interest on non-term deposits, and other directly related income, also eligible for incentives.
b. For enterprises meeting regional incentives:
- All income generated from production and business activities within the incentive region;
- Exclusions apply to income items specified in points a, b, c of Section 1, Article 10, Circular 96.
- Detailed guidance is provided in point b of Section 2, Article 10, Circular 96.
c. For enterprises subject to a 20% tax rate, incentives apply to the entire income. Exclusions apply to income items specified in points a, b, c of Section 1, Article 10, Circular 96.
3. Investment Projects Eligible for CIT Incentives
According to Circular 96/2015/TT-BTC, investment projects eligible for incentives include:
3.1 New Investment Projects Eligible for CIT Incentives:
+ New investment projects are defined in Articles 15 and 16 of Decree 218/2013/ND-CP as follows:
- Projects granted an investment registration certificate for the first time from 1 January 2014, with revenue generated after obtaining the investment registration certificate.
- Domestic investment projects associated with the establishment of new enterprises with capital below 15 million VND; these projects are not in the list of investment fields subject to enterprise registration certificate issuance from 1 January 2014.
- Independent investment projects separate from operating enterprises; these projects must have an investment registration certificate from 1 January 2014.
- The Notary Public Office that was established in areas with difficult or especially difficult economic conditions.
+ Not applicable to cases specified in point b, Section 3, Article 10, Circular 96.
3.2 Expansion Investment Projects Eligible for CIT Incentives:
+ Expansion investment projects must meet the criteria specified in point 4, Article 10, Circular 96.
Therefore, when an enterprise meets the conditions for applying CIT incentives, income, and investment projects falling within the categories mentioned in points 2 and 3 should follow the CIT incentive application procedures as instructed in point 1 of this article.
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