Circular No. 135/2013/TT-BTC of September 27, 2013, guiding the pilot application of enterprise income tax policy to microfinance institutions

THE MINISTRY OF FINANCE

Circular No. 135/2013/TT-BTC of September 27, 2013, guiding the pilot application of enterprise income tax policy to microfinance institutions

Pursuant to November 29, 2006 Law No. 78/2006/QH11 on Tax Administration and November 20, 2012 Law No. 21/2012/QH13, Amending and Supplementing a Number of Articles of the Law on Tax Administration;

Pursuant to June 3, 2008 Law No. 14/2008/QH12 on Enterprise Income Tax and June 19, 2013 Law No. 32/2013/QH13, Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Prime Minister’s opinions in the Government Office’s Official Letter No. 5778/VPCP-KTTH of July 16, 2013, on enterprise income tax incentive policy applicable to microfinance institutions;

Pursuant to opinions of the Governor of the State Bank of Vietnam in Official Letters No. 3635/NHNN-TTGSNH of June 15, 2012, and No. 258/NHNN-TTGSNH of January 16, 2012;

At the proposal of the director of the Tax Policy Department;

The Minister of Finance promulgates this Circular guiding the pilot application of enterprise income tax policy to microfinance institutions.

Article 1. Subjects and scope of application

This Circular guides the pilot application of enterprise income tax policy to microfinance institutions licensed for establishment by the State Bank of Vietnam before January 1, 2014, under Law No. 47/2010/QH12 on Credit Institutions but ineligible for application of enterprise income tax incentive policies applicable to new enterprises established under investment projects in localities with extreme socio-economic difficulties provided in Decree No. 124/2008/ND-CP of December 11, 2008, detailing and guiding a number of articles of the Law on Enterprise Income Tax.

Article 2. Tax incentive policy to be applied on a pilot basis to microfinance institutions as provided in Article 1 of this Circular

1. To apply the enterprise income tax rate of 20% of incomes earned from microfinance activities throughout the course of operation of enterprises. From January 1, 2016, the enterprise income tax rate provided in this Clause will be reduced to 17%.

2. Enterprise income tax exemption for 2 years and a 50-percent reduction of payable tax amounts for the next 4 years will be given for incomes earned from microfinance activities.

The tax exemption and reduction period provided in Clause 2 of this Article is continuously counted from the first year when the microfinance institutions earn their taxable incomes from microfinance activities. In case microfinance institutions have no taxable income for the first 3 years, counting from the year of earning taxable incomes from microfinance activities, the tax exemption and reduction period is counted from the fourth year.

Microfinance activities mentioned in this Article are activities which microfinance institutions are licensed to perform in accordance with Articles 119, 120, 121, and 122 of Law No. 47/2010/QH12 on Credit Institutions and guiding documents.

3. Principles, conditions and procedures for application of the enterprise income tax exemption and reduction policy comply with legal documents on enterprise income tax and tax administration.

Article 3. Organization of implementation

1. This Circular takes effect on November 11, 2013.

2. The Tinh Thuong single-member limited liability microfinance institution may continue to enjoy the enterprise income tax incentive policy guided by the Ministry of Finance in Circular No. 116/2012/TT-BTC of July 18, 2012. From January 1, 2016, it shall comply with Article 2 of this Circular on enterprise income tax rate.

3. Annually, microfinance institutions eligible for pilot application of the enterprise income tax incentive policy provided in this Circular and Circular No. 116/2012/TT-BTC shall report tax exemption and reduction results to the Ministry of Finance (the General Department of Taxation, the Tax Policy Department) and the State Bank of Vietnam within 90 days from the last day of the calendar year or fiscal year for summarization and reporting to the Government.

4. Contents not guided in this Circular and contents not contrary to the guidance in this Circular comply with current regulations.

Any problems arising in the course of implementation should be promptly reported to the Ministry of Finance for study, guidance and supplementation.-

For the Minister of Finance
Deputy Minister
VU THI MAI