The corporate income tax incentives for projects producing supporting industry products

Published on 11 - 06 - 2021
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On 04/6/2021, the Government has just issued the Decree No. 57/2021/ND-CP on the addition of point g, Clause 2, Article 20 of the Decree No. 218/2013/ND-CP (It is amended, supplemented in the Decree No. 12/2015/ND-CP) on corporate income tax incentives for projects producing supporting industry products.

Specifically, in case an enterprise, which has an investment project (new investment and expansion) to manufacture products on the list of supporting industry products prioritized for development and implemented before January 1, 2015, satisfies the conditions of a project to produce supporting industry products as prescribed in the Law No. 71/2014/QH13 and granted a certificate of incentives for production of supporting industry products by a competent authority, enjoies tax incentives.

In particular, the enterprises having projects to produce supporting industrial products, whose income from this project has not yet been entitled to corporate income tax incentives, are entitled to corporate income tax incentives according to the conditions of the project producing supporting industry products from the tax period, that the certification of incentives for production of supporting industry products is granted by a competent authority.

The enterprises having projects to produce supporting industry products, whose income from this project has already enjoyed full corporate income tax incentives under other preferential conditions (besides the preferential conditions applicable to supporting industry projects), are entitled to corporate income tax incentives under the conditions of the project producing supporting industrial products for the remaining time from the tax period that the certification of incentives for production of supporting industry products is granted by a competent authority.

The enterprises having a project to produce supporting industrial productsm, whose income from this project is enjoying corporate income tax incentives under other preferential conditions (besides the preferential conditions applicable to supporting industry projects), are entitled to corporate income tax incentives under the conditions of the project producing supporting industrial products for the remaining time from the tax period that the certification of incentives for production of supporting industry products is granted by a competent authority.

In addition, the Decree No. 57/2021/ND-CP also guides how to determine the remaining incentive period by subtracting the corporate income tax incentive period according to the conditions of projects producing supporting industry products to the number of years of tax exemption, the number of years of tax reduction, the number of years of enjoying preferential tax rates and incentives under other preferential conditions, specifically as follows:

- The remaining tax exemption period is equal to the tax exemption period according to the conditions of the project producing supporting industry products minus the tax exemption period already enjoying incentives under other preferential conditions.

- The remaining tax reduction period is equal to the tax reduction period according to the conditions of the project producing supporting industrial products minus the tax reduction period already enjoying incentives under other preferential conditions.

- The remaining period of application of the preferential tax rate is equal to the period of tax incentives according to the conditions of the project producing supporting industry products minus the time of tax incentives already enjoyed under other preferential conditions (if any).

In case the compliance with the provisions of this Decree (including the case where the competent authority has carried out inspection and examination) leads to a reduction in the amount of corporate income tax and late payment interest (if any), the tax payer shall make a written request to send to the tax authority to directly reduce the amount of corporate income tax that has been declared or inspected by the competent authority and the corresponding late payment interest (if any). After adjusting the reduction, if there is an overpaid tax or late payment interest, the provisions of Article 60 of the Law on Tax Administration dated June 13, 2019 and guiding documents shall be applied.

This Decree takes effect from the date of signing for promulgation.

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