Circular No. 212/2015/TT-BTC guides corporate income tax policies for environmental protection activities as stipulated in Decree No. 19/2015/NĐ-CP dated February 14, 2015, of the Government detailing the implementation of certain provisions of the Law on Environmental Protection.

CIRCULAR

GUIDELINES ON ENTERPRISE INCOME TAX POLICIES FOR ENVIRONMENTAL PROTECTION ACTIVITIES AS PROVIDED FOR IN DECREE NO. 19/2015/NĐ-CP OF FEBRUARY 14, 2015, PROVIDING DETAILS ON THE IMPLEMENTATION OF CERTAIN ARTICLES OF THE ENVIRONMENT PROTECTION LAW

Pursuant to the Enterprise Income Tax Law and related guiding documents;

WHEREAS,ứ Decree No. 19/2015/NĐ-CP dated February 14, 2015 of the Government providing detailed implementation of certain articles of the Environment Protection Law;ngenvironment;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Department of Tax Policy,"b) In addition to the lists of public services issued according to the provisions of Clause 2, Article 4 of this Decree, specialized agencies under provincial People's Committees shall report to the provincial People's Committee for decision-making on amending, supplementing, or issuing the list of public services funded by the state budget within their jurisdiction and consistent with the local budget capacity within the approved budget by the Provincial People's Assembly, and send it to the Ministry of Finance and relevant ministries and sectors for supervision during implementation."p, use Internet services and information on the network;

The Minister of Finance issues this Circular to guide"b) In addition to the lists of public services issued according to the provisions of Clause 2, Article 4 of this Decree, specialized agencies under provincial People's Committees shall report to the provincial People's Committee for decision-making on amending, supplementing, or issuing the list of public services funded by the state budget within their jurisdiction and consistent with the local budget capacity within the approved budget by the Provincial People's Assembly, and send it to the Ministry of Finance and relevant ministries and sectors for supervision during implementation."enterprise income tax policies for environmental protection activities as provided for in Decree No.No. 19/2015/NĐ-CP dated February 14, 2015 of the Government providing detailed implementation of certainNo. articles of the Environment Protection Law.

Article 1.perioda) Clause 1 Article 15 regarding accountability;

Article 1. This Circular guides the implementation of certain deductible expense items when determining taxable income under the Enterprise Income Tax for environmental protection activities of organizations, enterprises, cooperatives (collectively referred to as enterprises), and tax incentives for environmental protection activities eligible for enterprise income tax incentives as stipulated in Articles 43 and 48 of Decree No. 19/2015/NĐ-CP.

Article 2. For other environmental protection activities not specified in Decree No. 19/2015/NĐ-CP and other expenses not covered by this Circular shall be implemented in accordance with the laws on enterprise income tax.

Article 2. VREGARDING EXPENSES FOR IMPLEMENTING PRODUCT PROMOTION ACTIVITIES AND SOURCE SEPARATION OF WASTE

Clause 1. Expenses for product promotion from environmental protection activities, waste recovery and disposal activities; expenses for producing and disseminating various types of films, television programs, scientific reports on environmental protection; and expenses for providing free tools to the public for source separation of household waste and disposable products as stipulated in Clause 1, Article 48 of Decree No. 19/2015/NĐ-CP shall be included in deductible expenses when determining taxable income under the Enterprise Income Tax based on actual expenditures if they meet the following conditions:

- The expenses must have valid invoices and legal supporting documents as prescribed by law.

- If the purchase invoice for goods or services made in a single transaction has a value of 20 million dong or more (inclusive of VAT), payment must be made through non-cash payment methods, except in cases where non-cash payment methods are not applicable as stipulated in Decree No. 218/2013/NĐ-CP dated December 26, 2013 of the Government and related guiding documents.

Clause 2. Product promotion expenses from environmental protection activities, waste recovery and disposal activities as stipulated in Clause 1 of this Article include:

a) Expenses for organizing scientific seminars discussing production methods, features, and functions of products from environmental protection activities and waste recovery and disposal activities.

b) Market research expenses: surveying, interviewing, collecting, analyzing, and evaluating information about products from environmental protection activities and waste recovery and disposal activities.

c) Expenses for developing and supporting market research.

d) Expenses for hiring consultants to perform research, development, and market support tasks.

đ) Expenses for exhibiting and introducing products and organizing trade fairs and exhibitions: expenses for setting up rooms or booths to exhibit and introduce products; expenses for renting space to exhibit and introduce products; expenses for materials and tools to support exhibition and introduction of products; transportation expenses for exhibited and introduced products.

Clause 3. Films, television programs, and scientific reports on environmental protection as stipulated in Clause 1 of this Article include:

a) Films, television programs, and scientific reports popularizing and enhancing community awareness of environmental protection and sustainable consumption regarding environmentally friendly products certified with the Vietnam Green Label by the Ministry of Natural Resources and Environment.

b) Films, television programs, and scientific reports disseminating knowledge about source separation of household waste and disposable products.

Clause 4. Free tools provided to the public as stipulated in Clause 1 of this Article include: trash bins, trash bags; bins and bags for disposable products; boots, gloves, and other specialized tools for source separation of household waste and disposable products.

In cases where enterprises provide free tools to the public for source separation of household waste and disposable products as stipulated in this clause and also distribute informational brochures on organic and inorganic waste separation along with these tools, the costs of producing the brochures shall be included in deductible expenses when determining taxable income under the Enterprise Income Tax.

Enterprises providing free tools to the public as stipulated in this clause must prepare a detailed list, specifying the name, address of the recipient; quantity and value of each type of tool; signature of the recipient; and signature of the legal representative or authorized person of the enterprise.

The list of free tool provision must be signed by the legal representative or authorized person of the enterprise and they shall bear legal responsibility for the accuracy and truthfulness of the list preparation.

Article 3. VREGARDING ENTERPRISE INCOME TAX INCENTIVESi Clause 1. Enterprise income tax incentives as provided for in this Circular apply to income from new investment projects:

a) Centralized domestic wastewater treatment with a design capacity of 2,500 cubic meters or more per day and night for urban areas of Class IV or higher.

b) Collection, transportation, and centralized treatment of general solid waste.³ c) Treatment and rehabilitation of polluted areas in public zones.

d) Emergency response and handling of oil spills, chemical accidents, and other environmental incidents.

đ) Construction of environmental infrastructure for industrial clusters and craft villages.

e) Funeral services including cremation and electric cremation.

g) Environmental damage assessment; environmental health assessment; environmental assessment of goods, machinery, equipment, and technology.

h) Production of patented environmental protection applications protected by the State through granting patents or utility models.

g) Environmental damage assessment; environmental health assessment; environmental assessment for goods, machinery, equipment, and technology.

h) Producing applications of environmentally protective inventions protected by the State in the form of granting an Invention Patent or a Utility Model Patent.

i) Production of environmentally friendly products labeled with the Vietnam Green Label by the Ministry of Natural Resources and Environment; products from recycling and waste treatment activities certified by competent state authorities.

k) Production of gasoline, diesel fuel, and biofuel certified to comply with regulations; biochar; energy from wind power, solar power, tidal power, geothermal power, and other forms of renewable energy.

l) Production of machinery, equipment, and specialized means directly used for waste collection, transportation, and treatment; environmental monitoring and analysis; renewable energy production; pollution control; emergency response and environmental incident handling.

2. Regarding preferential rates:

a) Regarding tax rates:

The income of enterprises from implementing new investment projects as stipulated in Clause 1 of this Article shall be subject to a 10% tax rate for 15 years.

In cases where investment projects have large scale and high technology or require special attraction of investment, the period of applying the preferential tax rate of 10% may be extended but the total duration of applying the 10% tax rate shall not exceed 30 years, decided by the Prime Minister based on the proposal of the Minister of Finance.

Enterprises that meet the criteria for socialization bases in the environmental sector according to the Prime Minister's Decision shall apply a preferential tax rate of 10% throughout their operational period for income derived from socialized activities.

The period of applying preferential tax rates shall be calculated continuously from the first year the enterprise generates revenue from the investment project.

b) Regarding tax exemption and reduction:

The income of enterprises from implementing new investment projects as stipulated in Clause 1 of this Article shall be exempted from tax for four years and reduced by 50% of the tax payable for the next nine years.

The period of tax exemption and reduction shall be calculated continuously from the first year the enterprise has taxable income from the new investment project benefiting from tax preferences. In cases where the enterprise does not generate taxable income in the first three years, starting from the first year it generates revenue from the new investment project, the period of tax exemption and reduction shall be calculated from the fourth year the new investment project begins generating revenue.

The tax exemption and reduction periods shall be determined in accordance with the tax calculation period. The time for calculating continuous tax exemptions and reductions shall start from the first tax calculation period when the enterprise begins to generate taxable income (excluding losses carried forward from previous tax calculation periods).

In the first tax calculation period, if the new investment project of the enterprise has less than twelve months of production and business operation benefiting from tax preferences, the enterprise may choose to enjoy tax preferences immediately in that first tax calculation period or register with the tax authority to begin enjoying tax preferences from the subsequent tax calculation period. If the enterprise registers to enjoy tax preferences in the subsequent tax calculation period, it must determine the tax payable for the first tax calculation period and pay it into the State Budget as prescribed.

c) Regarding the application period of preferential tax rates for certain specific projects:

- For new investment projects producing products applying patented environmental protection technologies protected by the state through granting Patent Certificates or Utility Model Certificates, the application period of preferential tax rates shall be calculated from the year the Patent Certificate or Utility Model Certificate is granted.

- For new investment projects producing environmentally friendly products labeled with the Vietnam Green Label by the Ministry of Natural Resources and Environment, the application period of preferential tax rates shall be calculated from the year the Ministry of Natural Resources and Environment labels the products with the Vietnam Green Label.

- For new investment projects producing products from recycling and waste treatment activities certified by competent state authorities, the application period of preferential tax rates shall be calculated from the year the competent state authorities certify the products produced from recycling and waste treatment activities.

In the first tax calculation period, if the new investment projects of the enterprise specified in this point have less than twelve months of production and business operation, the enterprise may choose to apply preferential tax rates immediately in that first tax calculation period or register with the tax authority to begin applying preferential tax rates from the subsequent tax calculation period. If the enterprise registers to apply preferential tax rates in the subsequent tax calculation period, it must determine the tax payable for the first tax calculation period and pay it into the State Budget as prescribed.

3. In cases where enterprises have expansion projects for ongoing operations that are eligible for corporate income tax preferences under Clause 1 of this Article, they shall determine the criteria for enjoying preferences and apply tax preferences for expansion projects in accordance with the Corporate Income Tax Law.

Article 4. Effectiveness and Implementation

1. This Circular shall take effect 45 days from the date of signature and shall apply from the tax calculation period of 2016.

2. The Circular No. 230/2009/TT-BTC dated December 8, 2009, issued by the Ministry of Finance guiding tax preferences for environmental protection activities as stipulated in Decree No. 04/2009/NĐ-CP dated January 14, 2009, of the Government on incentives and support for environmental protection activities, is hereby abolished.

3. Enterprises with investment projects falling within the scope of tax preferences stipulated in this Circular, which, at the time this Circular takes effect, are still within the period eligible for corporate income tax preferences (including those currently enjoying preferences or yet to enjoy them) as prescribed by relevant laws and regulations on corporate income tax, may choose to continue enjoying tax preferences under the provisions of such laws and regulations or enjoy tax preferences under this Circular for the remaining period.

4. Tax authorities at all levels shall be responsible for disseminating and guiding enterprises in implementing this Circular.

5. During implementation, in case of any difficulties arising, organizations and individuals are requested to promptly report to the Ministry of Finance for research and resolution./.