Circular No. 115/1998/TT-BTC guides amendments to Circular No. 63/1998/TT-BTC to encourage and ensure foreign direct investment activities in Vietnam. This document regulates the adjustment of tax exemption and reduction benefits for enterprises with investment licenses.
Scope of application
Enterprises that have been granted Investment Licenses and are currently engaged in foreign direct investment activities in Vietnam
Key points
- Enterprises enjoy tax exemption and reduction benefits according to their Investment License (Point 2)
- If new provisions are more favorable than the existing incentives stipulated in the Investment License, enterprises will enjoy the new provisions if they are within the time frame and meet the conditions (Point 2)
- The period for enjoying tax exemption and reduction benefits is the remaining time from the year of issuance of the adjusted license to the end of the period specified under the new regulations (Point 2)
- Specific example regarding the adjustment of tax exemption and reduction benefits for Enterprise A in Circular
- This Circular takes effect from the date of signature.
🌐 Social impact of this document
- Encouraging and ensuring foreign direct investment activities in Vietnam
- Creating more favorable conditions for enterprises to enjoy tax incentives, promoting economic growth.
- May cause difficulties for state management agencies in monitoring and implementing tax regulations.
❓ Frequently asked questions
When can an enterprise adjust its tax exemption and reduction benefits?
When new provisions are more favorable than the existing incentives stipulated in the Investment License and the enterprise is within the time frame and meets the conditions.
What is the duration of enjoying tax exemption and reduction benefits?
The remaining period from the year of issuance of the adjusted license to the end of the period specified under the new regulations.
Full text
CIRCULAR
OF THE MINISTRY OF FINANCE NO. 115/1998/TT-BTC AUGUST 19, 1998
GUIDING AMENDMENTS AND SUPPLEMENTS TO CIRCULAR NO. 63/1998/TT-BTC
MAY 13, 1998 ON IMPLEMENTATION OF CERTAIN PROVISIONS
REGARDING TAXES AIMED AT ENCOURAGING AND ENSURING FOREIGN DIRECT INVESTMENT ACTIVITIES IN VIETNAM AS PROVIDED FOR IN DECREE NO. 10/1998/NĐ-CP
To encourage and ensure foreign direct investment activities in Vietnam, the Ministry of Finance guides amendments and supplements to replace Point 2, Section I, Part B of Circular No. 63/1998/TT-BTC dated May 13, 1998 by a new Point 2 as follows:
"Enterprises are entitled to tax benefits on income tax according to the Investment License. In cases where tax benefits on income tax stipulated in the new provisions are more favorable than those already specified in the Investment License, enterprises shall enjoy such benefits under the new provisions if:
- The enterprise is within the period of enjoying tax benefits on income tax as prescribed by the new provisions.
- The enterprise meets the conditions to enjoy tax benefits on income tax as stipulated by the new provisions.
The duration for enjoying tax benefits on income tax is the remaining time calculated from the year when the adjusted license was issued until the end of the period specified in the new tax benefit regulations.
Example: Enterprise A received an Investment License in 1995. According to the license, the enterprise does not enjoy any tax benefits on income tax. In 1996, the enterprise generated profits. Under the new provisions, the enterprise is eligible for a two-year exemption from income tax and a 50% reduction in the following three years since it began generating profit. Therefore, in 1998, the licensing authority adjusts to grant Enterprise A the tax benefits on income tax.
Thus, Enterprise A will enjoy a 50% reduction in income tax for the years 1998, 1999, and 2000."
This Circular takes effect from the date of issuance.
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