Firms with revenue of less than 200 billion VND this year would be eligible for 30-percent reduction on corporate income tax (Photo: taichinhdoisong.vn) Hanoi (VNS/VNA) - A decree has been published to guide theimplementation of a National Assembly resolution offering firms a 30 per cutcorporate income tax (CIT) cut.
The draft is up for comment, while the resolution came into effect on August 3.
Under the draft, the tax cut would be given to enterprises with total revenueof less than 200 billion VND (8.62 million USD) in 2020 – those considered themost vulnerable to the COVID-19 pandemic’s negative impacts.
In case firms were just founded in 2020 and did not operate for the full 12months of this year, their revenue would be calculated based on the number ofmonths they actually operated. Specifically, the revenue would be divided bythe number of months they operated then multiped by 12 to determine their eligibilityfor the support policy.
According to the Vietnam Chamber of Commerce and Industry, the draft decreestill lacks a way to calculate revenue of firms which temporarily haltedoperations.
To Hoai Nam, deputy president of the Vietnam Association of Small andMedium-Sized Enterprises, said that it was not necessary to have a specificregulation for firms which temporarily halted operations.
Nam said the pandemic was heavily affecting businesses and it would bedifficult for SMEs, which account for about 97 percent of the total number offirms in Vietnam, to achieve revenue of 200 billion VND this year.
Nam stressed the decree should not erect any barriers which caused difficultiesfor firms in accessing the support.
Statistics of the Ministry of Finance showed that as of the end of 2019, Vietnamhad a total of 760,000 firms in operation. The ministry estimated the tax cutwould cause a reduction of around 23 trillion VND to State revenues this year.
However, the policy was necessary amid the pandemic to help firms to overcomedifficulties and recover.
According to the Ministry of Planning and Investment, nearly 63,500 firmswithdrew from the market in the first seven months of this year, up 11 percentagainst the same period last year.
Among them, 33,000 firms temporarily halted operation, up 40 percent, while21,800 registered for dissolution procedures and 8,940 completed dissolution./.
VNA
