All about preferential tax rate for CIT (2020)

All about preferential tax rate for CIT (2020)

All about preferential tax rate for CIT (2020)

17 Feburuary, 2020


Corporate income tax (CIT) = Assessable income x Tax rate . In this article we just discuss about tax rate but that is preferential tax rate updated as of 2020, as following :


1. The preferential tax rate at 10% for 15 years

1.1 Incomes of enterprises from the execution of new projects of investment in: areas with extremely difficult socio-economic conditions specified in the Appendix to the Decree No. 218/2013 / ND-CP , Economic zones and High-tech parks, including concentrated information technology zones, established under the Prime Minister’s Decision.

1.2 Enterprises’ income from executing new investment projects in the fields of scientific research and technological development, hi-tech applications.

1.3 Income of enterprises from the execution of new investment projects in the field of environmental protection, including production of equipment for environmental pollution treatment, environmental monitoring and analysis equipment, pollution treatment and environmental protection, collection and treatment of wastewater, exhaust gas and solid waste, recycling and reusing wastes.

1.4 High-tech enterprises and agricultural enterprises applying high technologies according to the provisions of the Law on High Technologies.

1.5 Incomes of enterprises from new investment projects in the manufacturing sector (except for projects relating to special consumption tax or mineral exploitation projects), which meet either of the following criteria:

  • The project must have at least 6 (six) trillion dong of registered investment capital, disbursed within no more than 3 years from the date of issuance of the investment certificate and have a minimum total revenue of at least 10 ( ten) trillion dong / year at the latest after 3 years from the year of turnover.
  • The project has the minimum registered capital of at least 6 (six) trillion dong, disbursed no more than 3 years from the date of issuance of the investment certificate and employs more than 3,000 employees at the latest after 3 years from the year of turnover .


2. Preferential tax rate at 10% during the operation time

2.1 Income of enterprises from socialization in education – training, vocational training, health care, culture, sports and environment (hereinafter collectively referred to as socialization). Types, criteria for scale and standards of enterprises making socialization is made according to the list prescribed by the Prime Minister.

2.2 Income from publishing activities of Publisher under the provisions of the Publication Law. Publishing activities include publishing, printing and distributing publications in accordance with the Publication Law.

2.3 Income from press activities (including advertisements on printed newspapers) .

2.4 Income of enterprises from the implementation of investment projects – social housing business for sale, lease .

2.5 Incomes of enterprises from: planting, tending and protecting forests, rearing of agriculture, forestry and fishery in difficult socio-economic areas; production, multiplication and crossbreeding of plant and animal breeds; Production, mining and refining of salt .


3. The preferential tax rate at 20% for 10 years

3.1 Incomes of enterprises from the execution of new investment projects in geographical areas with difficult socio-economic conditions specified in the Appendix issued together with the Government’s Decree No. 218/2013 / ND-CP .

3.2 Income of enterprises from implementing new investment projects: producing high-class steel; manufacture of energy-saving products; manufacturing machines and equipment for agriculture, forestry, fishery and salt production; production of irrigation equipment; production and refining of feeds for cattle, poultry and aquatic animals; developing traditional industries.


4. Tax exemption and reduction

4.1 Tax exemption for four years and 50% reduction of payable tax amounts for 9 subsequent years :

  • Incomes of enterprises from execution of new projects of investment prescribed in Clause 1 of this post.
  • Incomes of enterprises from the execution of new investment projects in the field of socialization implemented in areas with difficult or extremely difficult socio-economic conditions specified in the Appendix to the Decree No. 218/2013 / ND-CP .

4.2 Tax exemption for two years and reduction of 50% of payable tax amount for 4 subsequent years, for incomes from High-tech enterprises and agricultural enterprises applying high technologies according to the provisions of the Law on High Technologies. And income of enterprises from new investment project in industrial parks.


5. Other cases of tax reduction

5.1 Enterprises operating in the field of production, construction and transport employing from 10 to 100 female workers, of which female employees account for over 50% of the total 150 employees who regularly present or regularly use more than 100 female employees whose female employees account for over 30% of the total number of regular employees of an enterprise are entitled to a reduction of the corporate income tax payable corresponding to the actually paid extra amount for female employees under the guidance of circular 78/2014/TT-BTC.

5.2 Enterprises employing ethnic minority laborers are entitled to a reduction of payable enterprise income tax corresponding to the actually paid extra amount for ethnic minority laborers guided in circular 78/2014/TT-BTC .

5.3 Enterprises conducting technology transfer in the priority fields to organizations and individuals in geographical areas with difficult socio-economic conditions are entitled to a 50% reduction of the payable enterprise income tax amount calculated on income from technology transfer.


Read more about 12 cases are exempt from tax