Vietnam reduces tax for businesses

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Vietnam taxVietnam’s National Assembly on June 19 agreed to reduce the corporate income tax rate to 22 per cent from 25 per cent starting January 1, 2014, and to 20 per cent from January 1, 2016.

The rate for companies with fewer than 200 employees and total revenue of less than 20 billion dong ($950,887) will be lowered to 20 per cent from July 1, 2013 and to 17 per cent from January 1, 2016.

Tax will also be cut by a steep 15 percentage points for developers of houses and apartments of less than 70 square meters and costing less than 15 million dong ($713) a square meter.

For certain other sectors like education, healthcare, culture, sports, environment and the print media, the corporate tax will be cut cut to just 10 per cent with effect from January 1, 2013. Investment in disadvantaged areas and high-tech zones will be taxed at 10 per cent tax for 15 years starting in 2014.

Low-cost housing will also benefit from the new value-added tax law, which halves the tax to 5 per cent for one year starting in July.

The cuts, while affecting the state’s budget by about $2 billion in lower tax revenue, will “ensure the competitiveness of Vietnam’s businesses and attract foreign investment,” lawmakers said.

Vietnam is aiming for economic growth of 5.5 percent in 2013, in what would be its first period of three straight years of expansion below 6 percent since 1988, according to International Monetary Fund data.

 

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Reading Time: 1 minute

Vietnam’s National Assembly on June 19 agreed to reduce the corporate income tax rate to 22 per cent from 25 per cent starting January 1, 2014, and to 20 per cent from January 1, 2016.

Reading Time: 1 minute

Vietnam taxVietnam’s National Assembly on June 19 agreed to reduce the corporate income tax rate to 22 per cent from 25 per cent starting January 1, 2014, and to 20 per cent from January 1, 2016.

The rate for companies with fewer than 200 employees and total revenue of less than 20 billion dong ($950,887) will be lowered to 20 per cent from July 1, 2013 and to 17 per cent from January 1, 2016.

Tax will also be cut by a steep 15 percentage points for developers of houses and apartments of less than 70 square meters and costing less than 15 million dong ($713) a square meter.

For certain other sectors like education, healthcare, culture, sports, environment and the print media, the corporate tax will be cut cut to just 10 per cent with effect from January 1, 2013. Investment in disadvantaged areas and high-tech zones will be taxed at 10 per cent tax for 15 years starting in 2014.

Low-cost housing will also benefit from the new value-added tax law, which halves the tax to 5 per cent for one year starting in July.

The cuts, while affecting the state’s budget by about $2 billion in lower tax revenue, will “ensure the competitiveness of Vietnam’s businesses and attract foreign investment,” lawmakers said.

Vietnam is aiming for economic growth of 5.5 percent in 2013, in what would be its first period of three straight years of expansion below 6 percent since 1988, according to International Monetary Fund data.

 

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