Decree No. 57/2021/ND-CP supplements Point g Clause 2 Article 20 of Decree No. 218/2013/ND-CP (amended and supplemented by Decree No. 12/2015/ND-CP) on corporate income tax incentives for projects producing supporting industrial products.

DECREE
Supplementing Point g Clause 2 Article 20 Decree No. 218/2013/NĐ-CP
on corporate income tax incentives for production projects
of industrial supporting products

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Corporate Income Tax Law dated June 3, 2008; the Law Amending and Supplementing Certain Provisions of the Corporate Income Tax Law dated June 19, 2013 and the Law Amending and Supplementing Certain Provisions of Various Tax Laws dated November 26, 2014;

Pursuant to the Law on Tax Administration dated June 13, 2019;

Pursuant to the Investment Law dated June 17, 2020;

At the proposal of the Minister of Finance;

The Government issues this Decree supplementing Point g Clause 2 Article 20 of Decree No. 218/2013/NĐ-CP (amended and supplemented by Decree No. 12/2015/NĐ-CP) on corporate income tax incentives for production projects of industrial supporting products.

Article 1. Supplementing Point g Clause 2 Article 20 of Decree No. 218/2013/NĐ-CP (amended and supplemented by Clause 20 Article 1 of Decree No. 12/2015/NĐ-CP) on corporate income tax incentives for production projects of industrial supporting products as follows:

"g) A business with an investment project (new investment and expansion investment) producing products listed in the Priority Industrial Supporting Products Catalogue, which implements the project before January 1, 2015, meets the conditions for an industrial supporting product production project as stipulated in Law No. 71/2014/QH13 and obtains from the competent authority a Certificate of Industrial Supporting Product Production Incentives, shall enjoy corporate income tax incentives as follows:

g1) In the case where a business has a production project of industrial supporting products and the income from this project has not yet enjoyed corporate income tax incentives, it shall enjoy corporate income tax incentives according to the conditions of an industrial supporting product production project from the tax period when the competent authority issues the Certificate of Industrial Supporting Product Production Incentives.

g2) In the case where a business has a production project of industrial supporting products and the income from this project has already enjoyed all corporate income tax incentives under other incentive conditions (other than the conditions for an industrial supporting product production project), it shall enjoy corporate income tax incentives according to the conditions of an industrial supporting product production project for the remaining time from the tax period when the competent authority issues the Certificate of Industrial Supporting Product Production Incentives.

g3) In the case where a business has a production project of industrial supporting products and the income from this project is currently enjoying corporate income tax incentives under other incentive conditions (other than the conditions for an industrial supporting product production project), it shall enjoy corporate income tax incentives according to the conditions of an industrial supporting product production project for the remaining time from the tax period when the competent authority issues the Certificate of Industrial Supporting Product Production Incentives.

g4) Method of determining the remaining incentive period if at points g2 and g3 above:

The remaining incentive period is determined by subtracting the number of years of tax exemption, the number of years of tax reduction, and the number of years of preferential tax rate enjoyed under other incentive conditions from the incentive period for corporate income tax according to the conditions of an industrial supporting product production project, specifically as follows:

The remaining tax exemption period is determined by subtracting the tax exemption period enjoyed under other incentive conditions from the tax exemption period according to the conditions of an industrial supporting product production project;

The remaining tax reduction period is determined by subtracting the tax reduction period enjoyed under other incentive conditions from the tax reduction period according to the conditions of an industrial supporting product production project;

The remaining period of preferential tax rate application is determined by subtracting the preferential tax rate period enjoyed under other incentive conditions from the preferential tax rate period according to the conditions of an industrial supporting product production project (if applicable).

g5) Specific examples:

Example 1: In 2010, the business implemented an expansion investment project in an area not included in the list of areas eligible for tax incentives. In the 2011 tax period, the project generated revenue and taxable income. By the end of the 2016 tax period, the income from the project had not yet enjoyed corporate income tax incentives. In the 2017 tax period, the project was issued a Certificate of Industrial Supporting Product Production Incentives. Accordingly, the project enjoys corporate income tax incentives according to the conditions of an expansion investment project for industrial supporting products as stipulated in Law No. 71/2014/QH13 and related implementing regulations from the 2017 tax period onwards. The incentive period is determined as follows: tax exemption for four years from the 2017 tax period to 2020, and a 50% reduction in corporate income tax payable for nine years following the 2021 tax period.

Example 2: In 2010, the business implemented a new investment project in an industrial zone (excluding urban districts of special-class cities, central-level special-class cities, and provincial-level special-class cities, these urban districts do not include newly established districts of special-class cities, central-level special-class cities, and provincial-level special-class cities from January 1, 2009). In the 2011 tax period, the project generated revenue. In the 2012 tax period, the project generated taxable income. In the 2015 tax period, the project enjoyed incentives according to the conditions of an industrial zone as stipulated in Law No. 71/2014/QH13 and related implementing regulations for the remaining time from 2015 (tax exemption for two years, and a 50% reduction in corporate income tax payable for four years following the 2015 tax period). Thus, the business still enjoys a 50% reduction in corporate income tax payable for three years (from 2015 to 2017). By the end of the 2017 tax period, the project has fully enjoyed incentives according to the conditions of an industrial zone.

For the 2018 tax period, the project was issued a Certificate of Preferential Treatment for Producing Supporting Industrial Products. Accordingly, the project was selected to enjoy corporate income tax incentives under the condition of being a new investment project producing supporting industrial products from the remaining time starting from the 2018 tax period. The remaining preferential period is determined as follows: a corporate income tax rate of 10% for a period of 15 years from the 2018 tax period; exemption from corporate income tax for two years from the 2018 tax period; and a reduction of 50% of the corporate income tax payable for the next five years.

Example 3: In 2014, the enterprise carried out a new investment project in an area with difficult socio-economic conditions. During the 2014 tax period, the project generated revenue. During the 2015 tax period, the project generated taxable income. The project enjoyed incentives based on the condition of being located in an area with difficult socio-economic conditions, specifically: a tax rate of 20% for a period of ten years from the 2014 tax period (applying a tax rate of 17% from the 2016 tax period); exemption from corporate income tax for two years from the 2015 tax period; and a reduction of 50% of the tax payable for the next four years. As of the end of the 2017 tax period, the project had enjoyed the following incentives: four years at the preferential tax rate, two years of exemption from corporate income tax, and one year of reduced corporate income tax.

For the 2018 tax period, the project was issued a Certificate of Preferential Treatment for Producing Supporting Industrial Products. Accordingly, the project enjoyed corporate income tax incentives under the condition of producing supporting industrial products from the remaining time starting from the 2018 tax period. The remaining preferential period is determined as follows: a corporate income tax rate of 10% for a period of eleven years from the 2018 tax period; exemption from corporate income tax for two years from the 2018 tax period; and a reduction of 50% of the corporate income tax payable for the next eight years.

Article 2. Implementation and Effectiveness

1. This Decree shall take effect from the date of issuance.

2. In cases where implementation is in accordance with this Decree (including cases where competent authorities have already conducted inspections and audits), resulting in a reduction in corporate income tax and late payment penalties (if any), the taxpayer shall submit a written request to the direct tax management authority to adjust the reduction in the corporate income tax already declared or inspected and audited by the competent authority and corresponding late payment penalties (if any). After the adjustment, if there is an overpayment of tax and late payment penalties, it shall be handled in accordance with Article 60 of the Law on Tax Administration dated June 13, 2019 and related implementing regulations.

3. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial and centrally-administered city People's Committees, and relevant organizations and individuals are responsible for enforcing this Decree.