THE MINISTRY OF FINANCE

Integrated Document No.26/VBHN-BTC dated  September 14, 2015 of the Ministry of Finance integrates the Circular1guiding guidelines for implementation of the Government s Decree No. 218/2013/ND-CP dated December 26, 2013 providing guidelines for implementation of the law on corporate income tax

Circular No. 78/2014/TT-BTC dated June 18, 2014 providing guidelines for implementation of the Government s Decree No. 218/2013/ND-CP dated December 26, 2013 providing guidelines for implementation of the Law on Corporate income tax, which comes into force from August 02, 2014, is amended by:

1. Circular No. 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance on amendments to Circular No. 156/2013/TT-BTC dated 06/11/2013, Circular No. 111/2013/TT-BTC dated 15/8/2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which comes into force from September 01, 2014;

2. Circular No. 151/2014/TT-BTC dated October 10, 2014 providing guidelines for implementation of the Government s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014;

3. Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance providing guidelines on corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

Pursuant to the Law on Corporate income tax No. 14/2008/QH12 dated June 03, 2009; the Law No. 32/2013/QH13 dated June 19, 2013 on amendments to the Law on Corporate income tax;

Pursuant to the Government s Decree No. 218/2013/ND-CP dated December 26, 2013 on guidelines for the Law on Corporate income tax and the Law on amendments to the Law on Corporate income tax;

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

At the request of the Director of the Central Department of Taxation, the Minister of Finance hereby provides guidance on corporate income tax as follows:2

Chapter I

GENERAL PROVISIONS

Article 1. Scopeof adjustment

This Circular provide guidance on implementation of the Government s Decree No. 218/2013/ND-CP dated December 26, 2013 on guidelines for the Law on Corporate income tax and the Law on amendments to the Law on Corporate income tax (hereinafter referred to as Decree No. 218/2013/ND-CP).

Article 2. Taxpayers

1.Payers of corporate income tax (CIT) are organizations that earn taxable income from manufacture and/or trade of goods and/or service provision (hereinafter referred to as “enterprises”), including:

a) Enterprises that are established and operated under Company law, the Law on Investment, the Law on credit institutions, the Law on Insurance Business, the Law on Securities, the Law on Petroleum, the Law on Commerce, and other legislative documents in the form of: joint-stock companies, limited liability companies, partnerships, private companies, law firms, private notary offices, partners to business contracts; partners to petroleum product contract, petroleum partnerships,

b) Public service units and non-public service units that earn taxable income from manufacture and/or trade of goods and/or service provision, regardless of fields.

c) Any organization established and operating under the Law on Cooperatives.

d) Any enterprise established under foreign law (hereinafter referred to as “foreign enterprise") that has a permanent establishment in Vietnam.

A permanent establishment of a foreign enterprise is business establishment through which the foreign company conducts part or all of its business operation in Vietnam, including:

- Branches, offices, factories, means of transport, mines, oil fields, or other natural resource extraction sites in Vietnam;

- Construction sites;

- Establishments where services are provided, including consulting services via employees or other entities;

- Agents of foreign companies;

- Representatives in Vietnam who are representatives authorized to sign contracts undersigned by foreign enterprises or representatives not authorized to sign such contracts but regularly deliver goods or provide services in Vietnam.

In the cases where a double taxation agreement to which Vietnam is a signatory defines permanent establishments otherwise, such agreement shall apply.

e) Any organization other than those mentioned in Points a, b, c, and d Clause 1 of this Article that earn taxable income from manufacture and/or trade of goods and/or service provision.

2. Any foreign organization doing business in Vietnam without following the Law on Investment, the Law on Enterprises, or earns taxable income in Vietnam shall pay CIT in accordance with separate instructions of the Ministry of Finance. In the cases where such an organization transfers its stakes, CIT shall be paid in accordance with instructions in Article 14 of Chapter IV of this Circular.

Chapter II

METHODS AND BASIS OF TAX CALCULATION

Article 3. Tax calculation method

1.3CIT payable in the period equals (=) assessable income minus (-) the amount transferred to science and technology fund (if any) and multiplied by (x) CIT rate.

CIT payable is calculated as follows:

- In case the cases where a Vietnamese enterprise makes investment in a foreign country that has signed a double taxation agreement and transfers its income to Vietnam after paying CIT overseas, regulations of such agreement shall apply. If the foreign country has not signed a double taxation agreement with Vietnam and the rate of CIT incurred in the foreign country is lower, the difference in CIT shall be collected in accordance with the Law on Corporate income tax of Vietnam.

- Every Vietnamese enterprise that makes outward direct investment (hereinafter referred to as “Vietnamese ODI enterprise”) and earns incomes from overseas business shall declare and pay CIT in accordance with CIT Law of Vietnam, including those given exemption or reduction of CIT under the Law of the host country. The rate of CIT for calculating and declaring tax on incomes earned overseas is 22% (20% from January 01, 2016). Preferential rates for which Vietnamese enterprises making outward investments are eligible under current CIT Law shall not apply.

- In the cases where an income earned from an overseas project has incurred CIT (or a similar tax) overseas, the Vietnamese ODI enterprise may deduct the tax paid by the enterprise overseas or by the foreign partner on its behalf (including tax on dividends) from the amount of CIT payable in Vietnam. Nevertheless, the deduction must not exceed the amount of CIT calculated under CIT Law of Vietnam. Reduction or exemption of CIT on profit from an overseas project under the host country’s law may also be deducted from the amount of CIT payable in Vietnam.

- In cases where a Vietnamese ODI enterprise transfers its income to Vietnam without declaring and paying tax thereon, the tax authority shall impose tax on income from overseas business under the Law on Tax administration.

- Documents enclosed with the declaration of tax on income from an overseas project include:

+ A photocopy of the declaration of overseas income tax certified by the taxpayer;

+ A photocopy of the receipt for overseas tax payment certified by the taxpayer, or the original copy of the foreign tax authority of tax payment, or a photocopy of an equivalent document certified by the taxpayer.

- Income from the overseas project shall be included in the annual CIT declaration of the year in which income in transferred to Vietnam as prescribed by regulations of law on ODI. Income (profit) from or loss on the overseas project must not be deducted from the loss incurred or income (profit) earned in Vietnam by the enterprise when calculating corporate income tax.

2. The tax year is the calendar year. If the tax year of an enterprise is different from the calendar year, its tax year shall apply. The first tax period of a new enterprise and the last tax period of an enterprise that is converted, acquired, divided or dissolved must match the accounting period pursuant to accounting law.

3. If the tax period of the first year in which the company is established from the issuance of the Certificate of Business Registration or certificate of investment, or the tax period of the last year when the company is converted, acquired, divided or dissolved is shorter than 03 months, this period shall be merged with the tax period of the next year or previous year respectively. The tax period of the first year or last year must not exceed 15 months.

4.In the cases where an enterprise converts its tax period (including conversion from calendar year to fiscal year and vice versa), the converted tax period must not exceed 12 months. Where an enterprise eligible for CIT incentives converts it tax period, it may choose between applying CIT incentives in the year in which tax period is converted and paying tax at the normal rate and apply CIT incentives in the next year.

Example 1: The tax period 2013 of Enterprise A is the same as the calendar year. At the beginning of 2014, it is converted into fiscal year which begins on April 01 of the year to March 31 of the next year. In this case, the converted tax period (converted year 2014) begins on January 01, 2014 and ends on March 31, 2014, the tax period of the next year (fiscal year 2014) begins on April 01, 2014 and ends on March 31, 2015.

Example 2: In the same case, but Enterprise A is eligible for CIT incentives (tax exemption for 02 years, 50% reduction for the next 04 years), which begin in 2012, Enterprise A will start applying CIT incentives tax as follows: tax exemption in 2012 and 2013; 50% reduction in 2014, 2015, 2016, and 2017.

If Enterprise A choose 50% tax reduction in the converted year 2014, it shall keep applying 50% tax reduction for the next 03 tax years from the fiscal year 2014 (the fiscal year 2014 begins on April 01, 2014 and ends on March 31, 2014) until the end of the fiscal year 2016.

If Enterprise A does not choose 50% tax reduction in the tax period of the converted year 2014 (tax is paid at a normal rate in the tax period of the converted year 2014), it shall be eligible for 50% tax reduction from the fiscal year 2014 (from April 01, 2014 to March 31, 2014) until the end of 2017.

5.Public service agencies and organizations other than enterprises established and operating under Vietnam’s law, enterprises paying VAT directly and earn incomes subject to CIT (hereinafter referred to as “taxable income”) shall declare and pay CIT at the following rates if costs cannot be separated from revenues:

+ Services (including deposit and loan interest): 5%

Education, healthcare, art performances: 2%

+ Goods sale: 1%

+ Other activities: 2%

Example 3: Public service agency A leases out a house. The annual house rent is VND 100 million. The leasing cost cannot be separated from its revenue. Thus, agency A shall pay CIT as follows:

CIT payable = VND 100,000,000 x 5% = VND 5,000,000.

6.Any enterprise that has revenue, cost, and other incomes in foreign currencies must convert them into VND at the average exchange rate on inter-bank foreign exchange market announced by the State bank of Vietnam at that time, unless otherwise prescribed by law. If the exchange rate between a foreign currency and VND is not available, it shall be exchanged with another currency that has an exchange rate with VND.

Article 4. Determination of assessable income

1.Assessable income incurred in a tax period equals (=) taxable income minus (-) tax-free income and loss carried forward from previous years.

Assessable income is calculated as follows:

2.4Taxable income

Taxable income in a tax period includes income from the business operation and other incomes.

Taxable income in a tax period is calculated as follows:

Income from business operation equals (=) revenue from business operation minus (-) deductible expenses incurred by such business operation. In the cases where an enterprise has multiple business activities to which various tax rates are applied, revenue from each of them must be calculated separately, which is multiplied by the corresponding tax rate.

Income from transfer of real estate, investment project, right to participate in an investment project, right to mineral exploration and/or mineral extraction and/or mineral processing must be separated and shall apply 22% CIT tax (20% from January 01, 2016) and are not given CIT incentives (except for the income from projects of investment in social housing for sale, lease or lease purchase, which applies 10% CIT according to Point d Clause 3 Article 19 of Circular No. 78/2014/TT-BTC).

In a tax period, if an enterprise makes a transfer of real estate, project of investment or right to participate in an investment project (except for mineral exploration and extraction) and suffers from a loss, such loss shall be offset against the profit from business operation (including other incomes prescribed in Article 7 of Circular No. 78/2014/TT-BTC). The remaining loss after offsetting shall be carried forward to the next years within the time limit for carry forward.

The loss on a transfer of real estate, project of investment, right to participate in a project of investment (except for mineral exploration and extraction) in 2013 and earlier, which may still be carried forward, must be deducted from the income from transfer of real estate, project of investment, right to participate in a project of investment. The remaining loss shall be deducted from income from the business operation (including other incomes) from 2014 onwards.

When an enterprise initiates the procedures for dissolution after a decision on dissolution is made, if real estate which is fixed assets of the company is transferred, the income (profit) from such transfer (if any) shall be offset against the loss on business operation, (including loss carried forward from the previous years) in the tax period during which real estate is transferred.

Article 5. Revenue

1. Revenue as the basis for calculating taxable income (hereinafter referred to as “taxable revenue") is calculated as follows:

The taxable revenue is the whole revenue from goods sale, processing, service provision, including subsidies and surcharges to which the company is entitled, whether the money has been collected or not.

a) With regard to enterprises paying tax using credit-invoice method, the revenue is not inclusive of VAT.

Example 4: Enterprise A pays VAT using credit-invoice method. The VAT invoice contains:

Selling price: VND 100,000.

10% VAT: VND 10,000.

Amount payable: VND 110,000.

The taxable revenue is VND 100,000.

b) With regard to companies paying VAT directly, the revenue is inclusive of VAT.

Example 5: Enterprise B pays VAT directly. The sale invoice only contains the selling price of VND 110,000 (inclusive of VAT).

The taxable revenue is VND 110,000.

c) Where an enterprise provides services and receives a lump sum payment for multiple years, the taxable revenue shall be divided by (:) the number of years or the lump sum payment. If the enterprise’s tax incentive period has not expired, tax equals (=) tax on total income of the years divided by (:) the number of years.

2.5Time for determining taxable revenue is:     

a) For goods sale: the time when the right to ownership and/or right to enjoyment of the product is transferred to the buyer.

b) For service provision: the time when service provision is completed or part of service provision is completed except for the case in Clause 3 Article 5 of Circular No. 78/2014/TT-BTC, Clause 1 Article 6 of Circular No. 119/2014/TT-BTC.

c) For air transport: the time when provision of transport services is completed.

d) Other cases defined by law.

3. Determination of taxable revenue in some cases:

a) Revenue from selling goods/services that are paid by installment or under a deferred payment plan is the lump sum payment, not inclusive of any installment interest or deferral interest.

b)6  For goods and services used for exchange (excluding the goods and services used for sustaining production and business operation), it shall be determined according to the selling prices of products, goods or services of the same or similar categories on the market at the time of exchange.

Example: Enterprise A produces automotive parts and assembles automobiles. If Enterprise A uses the tires it produces for display, product introduction or assembling automobiles, the value of such tires shall not be included in the assessable income.

Example. Enterprise B produces computers. The value of computers that Enterprise B produces and provides for its employees to work at the workplace shall not be included in assessable income.

c) Revenue from processing goods is the proceeds from the processing, including remuneration, cost of fuel, machinery, ancillary materials, and other expenditures on goods processing.

d) Regarding goods sold at fixed prices for commissions under agent contracts:

- For enterprises that deliver/deposit goods to agents (including multi-level marketing agents): total revenue from goods sale.

- For enterprises acting as agents that sell goods at fixed prices to earn commissions: commission received under the agent contract.

e) Revenue from asset lease is the periodic rent under the lease contract. c) Where the tenant pays a lump sum for multiple years, the taxable revenue shall be divided by (:) the number of years or equal the lump sum payment.

Depending on the bookkeeping mode and determination of expenses, the taxable revenue may be:

- The annual rent, which equals (=) the advanced payment divided by (:) the number of years for which the rent is paid.

- The lump sum rent paid in advanced for multiple years.

In the cases where an enterprise eligible for CIT incentives determines that the taxable revenue is the lump sum rent paid in advance for multiple years, the preferential CIT shall be based upon the CIT on the lump sum rent divided (:) by the number of years for which the rent is paid in advance.

g) For golf course business, revenue is the proceeds from selling memberships, tickets and other receipts during the tax period, which are calculated as follows:

- For daily sale of tickets and golf cards, the revenue is the proceeds from such sale and other proceeds earned during the tax period.

- For sale of prepaid tickets and memberships (for multiple years), the revenue is the proceeds from such sale divided by (:) the number of years, or the lump sum payment.

h) Revenue from credit extension by branches of foreign banks and credit institutions is proceeds from deposit interest, loan interest, finance lease during the tax period and classified as revenue in accordance with financial regulations of such credit institutions and branches of foreign banks.

i) Revenue from transport is the whole revenue from transport of passenger, goods, and/or luggage earned during the tax period.

k) Revenue from supply of electricity and clean water is the total amounts written on VAT invoices. The time for determining taxable revenue is the day on which the electricity meter is recorded, which is also written on the receipt.

Example 6: The receipt reflects the electricity consumption from December 05 to January 05. Revenue on this receipt shall be accounted for in January.

l) Taxable revenue from insurance business is the total amount collected from provision of insurance and other services, including surcharge and extra fees to which the insurer is entitled, exclusive of VAT, including:

- Revenue from insurance business:

Revenue from insurance and reinsurance is the revenue from insurance premium, reinsurance premium, ceding commission, fees for policy management, fees for agent services including assessment of damage, consideration of indemnity, claiming indemnity from third parties, proceeds from liquidation of indemnified property (excluding assessment on behalf of member enterprises that belong to the same independent insurer) minus (-) expenses such as refunds and reductions of insurance premium, refunds and reductions of reinsurance premium, refunds and reductions of ceding commission.

In case of joint insurance offered multiple insurers, taxable revenue of each insurer is the insurance premium divided according to the joint insurance ratio, exclusive of VAT.

Taxable revenue from an insurance contract paid by installments is each installment.

In case of collection services among affiliates or between an affiliate and the headquarters of an insurer, the taxable revenue does not include the payments collected on their behalf.

- Revenue from insurance brokerage: collected insurance commissions minus (-) paid commissions, refunds and reductions of insurance commissions.

m) Revenue from construction/installation is the value of the works, work items or value of the works accepted.

- If the construction/installation contract is inclusive of building materials, machinery and equipment, the revenue is inclusive of the value of building materials, machinery and equipment.

- If the construction/installation contract is exclusive of building materials, machinery and equipment, the revenue is exclusive of the value of building materials, machinery and equipment.

n) Revenue from business cooperation:

- If the parties to a business cooperation contract divide the revenue according to the sale of goods/services, the revenue as the basis for calculating tax is the revenue received by each party under the contract.

- If the parties to the business cooperation contract divide the revenue according to products, the revenue as the basis for calculating tax is the revenue received by each party under the contract.

- If the parties to the business cooperation contract divide the profit before CIT is paid, the pretax revenue is the revenue from sale of goods/services under the contract. Each of the parties to the business cooperation contract shall appoint a representative who is responsible for issuing invoices, recording revenues and expenses, calculating pre-tax profit of the enterprise, which is divided among the parties to the business cooperation contract. Each of the parties to the partnership contract must pay their own CIT according to applicable regulations.

- In case the parties to the partnership contract divides the profit after corporate income tax is paid, the revenue for calculating tax is the proceeds from sale of goods/services under the contract. The parties to the business cooperation contract shall appoint one of them to issue invoices, record revenues and expenditures, declare and pay CIT on behalf of the other parties.

o) Revenue as the basis for calculating tax from gambling business (casino, electronic casino games, betting) is the revenue from such business inclusive of special excise tax and exclusive of the value of prizes awarded to winners.

p) Revenue as the basis for calculating tax from securities business is the proceeds from brokerage services, proprietary securities trading, underwriting, portfolio management, financial and securities investment counseling, investment fund management, issuance of fund certificates, market organization services, and other securities services prescribed by law.

q) Revenue as the basis for calculating tax from derivative financial services is the revenue from provision of derivative financial services during the tax period.

Article 6. Deductible and non-deductible expenses7

1. Except for the non-deductible expenses mentioned in Clause 2 of this Article, every expense will be deductible if all of the following requirements are met:

a) The actual expense incurred is related to the enterprise’s business operation.

b) There are adequate and valid invoices and documentary evidence of the expense under the regulations of the law.

c) There is documentary evidence of non-cash payment for every invoiced purchase of at least VND 20 million (inclusive of VAT).

The documentary evidence of non-cash payment must comply with regulations of law on VAT.

If a purchase is worth VND 20 million or over according to the invoice which is yet to be paid for by the enterprise when the expense is accounted for, such expense will be deductible. The enterprise must remove the value of the purchases without documentary evidence of non-cash payment from expenses incurred in the tax period in which cash payment is made (even when the tax authority and other authorities have issued a decision on tax inspection in the tax period in which such expense is incurred).

The invoices for purchases paid in cash before the effective date of this Circular shall not be adjusted under the regulations of this Point.

Example 7: In August 2014, Enterprise A bought goods for VND 30 million according to the invoice but has not paid for them. In the tax period in 2014, Enterprise A has included the value of such purchase in deductible expense. In 2015, Enterprise A pays for such purchase in cash. Thus, it must remove the value of such purchase from expense incurred in the tax period during which cash payment is made (the tax period of 2015).

In the cases where an enterprise makes a purchase related to its business operation that is worth at least VND 20 million and the invoice is printed by the cash register under the regulations of the law on invoicing, such purchase may be included in deductible expense according to the invoice and documentary evidence of non-cash payment.

In cases where an enterprise makes a purchase related to its business operation that is worth under VND 20 million, pays for it by cash and the invoice is printed by the cash register under the regulations of the law on invoicing, such purchase may be included in deductible expenses according to the invoice and documentary evidence of cash payment.

2. The expenses below are non-deductible:

2.1. Expenses that do not meet all of the requirements specified in Clause 1 of this Article.

If the enterprise incurs expenses related to damage caused by a natural disaster, epidemic, blaze or another force majeure event (hereinafter referred to as “calamity”) without compensation, such expenses will be deductible. To be specific:

The enterprise must determine the damage caused by the calamity in accordance with law.

The damage equals (=) total damage minus (-) damage covered by insurance or compensated by other entities as prescribed by law.

a) Documents about assets/goods damaged by a calamity included in deductible expenses include:

- A statement of value of damaged assets/goods made by the enterprise.

The statement of value of damaged assets/goods must specify the value of damaged assets/goods, causes; entities responsible for such damage; categories, quantity, value of recoverable assets/goods (if any); statement of inventory of damaged goods certified by the enterprise s legal representative, who signs it and takes legal responsibility for its contents.

- An indemnity claim upheld by the insurer (if any).

- Documents about responsibility for provision of compensation (if any).

b) Expired goods and goods damaged because of natural deterioration that are not compensated will be deductible expenses when calculating taxable income.

Documents about expired goods and goods damaged because of natural deterioration and that are included in deductible expenses include:

- A statement of value of damaged goods prepared by the enterprise.

The statement of value of damaged goods must specify the value of damaged goods, causes; categories, quantity, and values of recoverable goods (if any) enclosed with a statement of inventory of damaged goods certified by the enterprise’s legal representative, who signs it and takes legal responsibility for its contents.

- An indemnity claim upheld by the insurer (if any).

- Documents about responsibility for provision of compensation (if any).

c) The aforementioned documents shall be retained at the enterprise and presented to the tax authority on request.

2.2. Depreciation of fixed assets in any of the following cases:

a) Depreciation of fixed assets that are not used for business operation.

Fixed assets serving employees at the enterprise such as recreation room, canteen, locker room, bathroom, clinic, vocational training facility, library, kindergarten, sports facilities, furniture, and equipment therein that are classified as fixed assets; clean water reservoir, parking lot, employee shuttle, employees’ housing; expenditures on development of infrastructure, purchase of machinery and equipment that are fixed assets serving vocational education may be depreciated and included in deductible expense.

b) Depreciation of fixed assets without documentary evidence of ownership of the enterprise (except for fixed assets under a lease purchase contract).

c) Depreciation of fixed assets that is not accounted for under applicable accounting regulations.

d) Depreciation beyond the limit imposed by the Ministry of Finance.

The enterprise shall submit a notification of applied depreciation method to its supervisory tax authority before depreciation (e.g. linear depreciation, etc.) Every year, the enterprise shall depreciate its fixed assets according to applicable regulations of the Ministry of Finance on management, use and depreciation of fixed assets, including quick depreciation (if qualified).

Any enterprise who has a lucrative business may implement quick depreciation, provided it is not greater than 2 times the linear depreciation, in order to apply new technologies to certain fixed assets in accordance with applicable regulations of the Ministry of Finance on management, use and depreciation of fixed assets. When implementing quick depreciation, profitability must be ensured.

Fixed assets used as capital contribution, fixed assets transferred upon partial division, full division, amalgamation, acquisition or conversion of the enterprise after reassessment shall be depreciated and included in deductible expenses by the enterprise that receives them according to their reassessed costs. Assets other than fixed assets used as capital contribution, fixed assets transferred upon partial division, full division, amalgamation, acquisition or conversion of the enterprise after reassessment may be included in expense or gradually aggregated with deductible expense by the enterprise that receives them according to their reassessed costs.

Deductible cost of fixed assets produced by the enterprise itself is the total cost of manufacture such assets.

Cost of purchase of assets that are instruments, tools, circulated packages, etc. that are not classified as fixed assets shall be gradually included in operating cost for up to 3 years.

dd) Depreciation of fixed assets that have been fully depreciated.

e) Other non-deductible depreciations:

- The following amounts are not deductible: Depreciation of the portion of cost in excess of VND 1.6 billion per car for cars for the transport of 9 persons or fewer (except for cars used for passenger transport services, tourism, or hotel operations; cars used for display and test drive by car dealers); depreciation of fixed assets being civil aircraft and yachts.

An automobile for the transport of up to 9 persons used for passenger transport services, tourism, or hotel operations means an automobile registered under the name of an enterprise which has registered any of the following business lines according to its business registration certificate: passenger transport services, tourism, hotel business, and has been licensed in accordance with legislative documents on transport, tourism or hotel business.

Civil aircraft and yachts used for other purposes than freight transport, passenger transport, tourist transport services are those of an enterprise whose certificate of business registration or certificate of enterprise registration does not license provision of freight transport, passenger transport or tourist transport services.

In the cases where an enterprise transfers or liquidates an automobile for the transport of up to 9 persons, the remaining value of such automobile equals (=) its cost minus (-) its accrued depreciation according to regulations on management, use, and depreciation of fixed assets by the time the automobile is transferred or liquidated.

Example 8: Enterprise A buys an automobile for the transport of up to 9 persons for VND 6 billion. It liquidates the automobile after 1 year of depreciation. The depreciation amount is VND 1 billion according to regulations on management, use, and depreciation of fixed assets (the depreciation period is 6 years according to regulations on fixed asset depreciation). The deductible depreciation amount according to tax policies is VND 1.6 billion/6 years = VND 267 million. Enterprise A liquidates the automobile for VND 5 billion.

Income from automobile liquidation = VND 5 billion - (VND 6 billion - VND 1 billion) = VND 0

- In case of depreciation of constructions on land used for both business operation and other purposes, depreciation of constructions on the area of land not used for business operation is not deductible.

Depreciation of constructions such as offices, factories, and stores serving the enterprise’s business operation is deductible according to applicable regulations of the Ministry of Finance if such constructions satisfy the conditions below:

+ The enterprise has a land use right certificate bearing its name (if the piece of land is owned by the enterprise) or a contract for lease/borrowing of land with another land owner. The representative of the enterprise is legally responsible for the accuracy of such contract (in case of leased or borrowed land).

+ There are invoices for payment for the constructions bearing the enterprise s name, address, and TIN enclosed with the construction contract, note of contract finalization and construction value statement.

+ The constructions are managed and accounted for in accordance with applicable regulations on management of fixed assets.

- In the cases where the use of fixed assets owned by an enterprise for its business operation is suspended for less than 09 months because of seasonal manufacture, or for less than 12 months because of repairs, relocation, periodic maintenance, then the use of such fixed assets for business is resumed, the enterprise may depreciate the fixed assets and their depreciation will be deductible.

The enterprise must retain, present adequate documents and provide explanation for suspending the use of fixed assets at the request of tax authorities.

- Long-term land use right (LUR) shall not be depreciated or included in deductible expenses when calculating taxable income; limited-term LUR may be gradually included in deductible expenses if invoices are sufficient, procedures are followed, and such piece of land is used for business operation over the period written on the land use right certificate (including the period over which business operation is suspended for repair or building new constructions).

In the cases where an enterprise buys a tangible fixed asset that is a building or architectural object associated with the long-term LUR, the value of LUR must be calculated separately and recorded as an intangible fixed asset; the cost of the tangible fixed asset that is the building or architectural object equals (=) the buying price plus (+) every expenditure on putting such tangible fixed assets into use. The value of LUR is determined according to the price written on the real estate purchase contract, which must accord with the market price and not be lower than the price on the price list compiled by the People’s Committee of the province at the time of purchase. In the cases where an enterprise buys a tangible fixed asset that is a building associated with long-term LUR without being able to separate the value of LUR, it shall be determined according to the prices imposed by the People’s Committee of the province at the time of purchase.

2.3. Expenditure beyond limits on reasonable consumption of raw materials, fuel, energy, and goods imposed by the State.

2.4. Expenditures on purchases of goods/services (without invoices, listed on statement of purchases No. 01/TNDN enclosed with Circular No. 78/2014/TT-BTC) without statements enclosed with receipts for payments to sellers/service providers in the cases below:

- Purchase of agricultural products, forestry products, aquaculture products directly sold by growers or catchers;

- Purchase of handicraft products made of dried jute, sedge, leaves, rattan, bamboo, straw, coconut shell, or aquaculture by-products directly sold by craftsmen;

- Purchase of earth, stones, sand, gravel directly sold by the excavating people;

- Purchase of scrap from collectors;

- Purchase of items, property, services sold by non-business households and non-business individuals;

- Purchase of goods/services from business households and business individuals (except for the cases mentioned above) whose revenue is below the level subject to VAT (VND 100 million per year).

The statement of purchases shall be signed by the enterprises’ legal or authorized representative, who is legally responsible for its accuracy. The enterprise that buys goods/services may make a statement and include them in deductible expense. Documentary evidence of non-cash payment is not required for such expenses. If the buying prices for goods/services on the statement are higher than market prices at the time of purchase, the tax authority shall recalculate the deductible expenses according to the market prices for similar goods/services.

2.5. Expenditure on lease of assets from individuals without sufficient documents:

- In the cases where an enterprise leases an asset from an individual, documents for determining deductible expense is the lease contract and documentary evidence of rent payment.

- In cases where an enterprise lease an asset from an individual and the lease contract allows the enterprise to pay tax on such individual’s behalf, documents for determining deductible expenses include the lease contract, documentary evidence of rent payment and documentary evidence of tax payment on the individual’s behalf.

- In the cases where an enterprise leases an asset from an individual and the lease contract states that the rent is exclusive of tax (VAT, personal income tax) and allows the enterprise to pay tax on such individual’s behalf, the enterprise may include the total amount of rent in deductible expense, including the tax paid on such individual’s behalf.

2.6. Salaries, remunerations and bonus for employees in one of the following cases:

a) Salaries, remunerations and other payables to employees that have been included in operating cost in the period but are not actually paid or do not have documentary evidence as prescribed by law.

b) Salaries, bonuses, purchase of life insurance for employees that are not specified in one of the following documents: employment contract, collective bargaining agreement, financial regulation, reward scheme issued by the President of the Board of Directors, General Director, or Director in accordance with the financial regulation of the company or general company.

- In the cases where the employment contract between an enterprise and a foreign employee has education expense of his/her children in Vietnam from preschool to high school which is covered by the enterprise as part of the salary and has satisfactory documentary evidence, such education expense will be deductible.

- In the cases where the employment contract between an enterprise and an employee has a payment for such employee’s housing which is part of the salary and has sufficient documentary evidence, such payment will be deductible.

- In case a Vietnamese enterprise signs a contract with a foreign enterprise which states that the Vietnamese enterprise must incur the cost of accommodation of foreign experts during their working period in Vietnam, the house rent paid for foreign experts working in Vietnam by the Vietnamese enterprise will be deductible.

c) Salaries, remuneration and allowances of employees that have not been paid after the annual tax declaration is submitted, unless the enterprise has made a provision for inclusion in the succeeding year’s salary fund. The annual provision is decided by the enterprise and must not exceed 17% of the released salary fund.

Released salary fund is the total salary paid in the year until the deadline for submitting the annual tax declaration (not including the previous year’s provision for salary fund).

The enterprise must ensure that it does not suffer from a loss after making the provision. Otherwise, the provision must be smaller than 17%.

If the enterprise did not use up the previous year’s salary fund provision within 06 months from the end of the fiscal year, it must be recorded as a decrease in the succeeding year’s expense.

Example 9: When submitting the annual tax declaration of 2014, Enterprise A makes a provision for salary fund of VND 10 billion. On June 30, 2015, (tax period of Enterprise A is the same as calendar year), Enterprise A has used only VND 7 billion from the salary fund. In this case, VND 3 billion (VND 10 billion – VND 7 billion) must be deducted from the succeeding year’s expenditure on salary payment (2015). While preparing the annual tax declaration of 2015, Enterprise A may keep making provision for salary fund if it wishes to do so.

d) Salaries and remunerations of the owner of a private company, single-member limited liability company (owned by an individual); remunerations of founders, members of the Board of members or the Executive Board who do not directly participate in business administration.

2.7. In-kind expenditure on employees’ clothing without invoices and documentary evidence. Monetary expenditure on employees’ clothing that exceeds VND 05 million per person per year.

In the cases where the enterprise has both monetary and in-kind expenditures on employees’ clothing, the monetary expenditure must not exceed VND 05 million per person per year and the in-kind expenditure must have invoices and documentary evidence in order to be deductible.

With regard to special lines of business, such expenditures shall comply with separate regulations of the Ministry of Finance.

2.8. Rewards for ideas and innovations without specific regulations or without assessment by a council.

2.9. Leave travel allowance for employees paid against regulations of the Labor Code.

Allowance for employees on business trips, allowance for travelling and accommodation of employees on business trips will be deductible if they have adequate invoices and documentary evidence. In the cases where an enterprise pays fixed amounts for the traveling, accommodation, and allowance of employees on business trips in accordance with its financial regulations, such amounts will be deductible.

In the cases where an enterprise sends an employee on a business trip (whether at home or overseas), every expense that reaches VND 20 million or above and payment for air tickets that are made with such employee’s banking card will be considered non-cash payments and will be deductible if all of the requirements below are satisfied:

- There are valid invoices and documentary evidence issued by the goods or service provider.

- The enterprise has a written business trip order.

- The enterprise’s financial regulations allow its employees to pay the trip expenses, air tickets with their personal banking cards and get reimbursed by the enterprise.

In the cases where an enterprise buys an air ticket on a website for an employee to go on a business trip serving its business operation, the documentary evidence of deductible expense shall be the electronic ticket, the boarding pass, and documentary evidence of non-cash payment bearing the name of the traveling employee. If the enterprise fails to collect the boarding pass, the documentary evidence of deductible expense shall be the electronic ticket, the business trip order, and the documentary evidence of non-cash payment.

2.10. The following deductible amounts that are not spent properly or beyond the limits:

a) Additional payments for female employees that are deductible, including:

- Expenditure on vocational training for female employees when their current jobs are no longer suitable.

This expenditure includes: tuition fee (if any) + difference in salary scale (ensure payment of 100% salaries for learners).

- Expenditure on salaries and allowances (if any) for teachers at the kindergarten managed and operated by the enterprise.

- Expenditure on provision additional health check-ups in the year such as occupational disease, chronic disease or gynaecological examination for female employees.

- Extra allowance for female employees after giving birth for the first or second time.

- Overtime pays for any female employee who does not take maternity leave after giving birth because of objective reasons, including the case of performance-based pay where the female employee earns during the paid maternity leave to which she is entitled.

b) Extra payment for employees being ethnics, which is deductible: tuition fee (if any) + difference in salary scale (ensure payment of 100% of salaries of learners); allowance for housing, social insurance, health insurance if such amounts are not covered by the State.

2.11. Payment in excess to VND 01 million per person per month for: contribution to a voluntary pension fund, purchase of voluntary pension insurance for employees.

Contributions to voluntary pension fund, purchase of voluntary pension insurance for employees that are deductible must not exceed the limits mentioned in this Point. Apart from that, their requirements and levels must be specified in the employment contract, collective bargaining agreement, the financial regulation of the company/general company/corporation, or the reward scheme issued by the Chairperson of the Executive Board or the Director.

The aforesaid voluntary payments must not be included in expense if the enterprise fails to fulfill its obligation to buy compulsory insurance for its employees (including outstanding compulsory insurance premiums).

2.12. Redundancy pays for employees against applicable regulations.

2.13. Contributions to funding for administration.

2.14. Contributions to funds of Associations (established within the law) beyond the limits imposed by such Associations.

2.15. Payments for electricity and water supply under contracts between households or individuals who lease out the business premises and the electricity and water suppliers without documentary evidence of payment in any of the following cases:

a) The enterprise leases the business premises and directly pays for electricity and water supply to the suppliers without payment receipts and the lease contract.

b) The company leases the business premises and directly pays for electricity and water supply to the landlord without a lease contract and receipts of payment to the landlord that match the electricity and water consumption.

2.16. Expenditure on lease of fixed assets beyond the annual budget for prepaid rent.

Example 10: Enterprise A pays a lump sum of VND 400 million to lease fixed assets for 4 years. The rent of VND 100 million for fixed assets shall be included in annual expense. If the annual rent exceeds VND 100 million, the amount in excess of VND 100 million must not be included in reasonable expense when calculating taxable income.

If the lease contract states that the tenant is responsible for repairing the assets over the lease period, the repair cost may be gradually included in expense over a period of up to 03 years.

Expenditures on assets other than fixed assets (purchase of technical documents, patents, technology transfer licenses, trademarks, business advantages, right to use trademarks, etc.) may be gradually included in business expense over a period of up to 03 years.

In the cases where an enterprise contributes capital in the form of business advantage or right to use trademarks, the value of which shall not be deductible.

2.17. Payment of interest on loan serving business operation taken from entities other than credit institutions or business organizations which exceeds 150% of basic interest rate announced by the State bank at the time of lending.

2.18. Payment of interest on loan equivalent to charter capital deficit (or invested capital in case of private companies) according to the capital contribution schedule, even if the enterprise is already in operation. Payment of loan interest during the investment stage which has been included in value of assets or value of constructions invested.

If the enterprise has contributed sufficient charter capital and, during its business operation, pays interest on a loan taken to make investment in another enterprise, such payment will be deductible.

Non-deductible payment of interest on loan equivalent to charter capital deficit according to the capital contribution schedule is determined as follows:

- If the loan is smaller or equal to the charter capital deficit, the whole loan interest is not deductible.

- If the loan is higher than the charter capital deficit according to capital contribution schedule:

+ If the enterprise has multiple loans, non-deductible payment of loan interest equals (=) the ratio of charter capital deficit to total loan (%) multiplied by (x) total interest.

+ If the enterprise has only one loan, non-deductible payment of loan interest equals (=) charter capital deficit multiplied by (x) loan interest rate multiplied by (x) time for eliminating charter capital deficit.

 (Loan interest must comply with regulations in Point 2.17 of this Article)

2.19. Provisions made and used against instructions of the Ministry of Finance on making provisions: provision for devaluation of unsold goods, provision for loss on financial investments, provision for bad debts, provision for warranty, and provision for vocational risks of companies that provide valuation services or independent audit services.

2.20. Periodic accrued expense that is not completely paid for at the end of the period.

Accrued expenses include: expenditures on periodic major repairs of fixed assets, expenditures on fulfillment of contractual obligations to the services for which revenue has been collected (including payments for leases of assets and provision of services that have been collected in advanced for multiple years and included in revenue of the year in which they are collected), and other accrued expenses.

In the cases where an enterprise has recorded revenue as the basis for calculation of CIT without incurring all of expenses, accrued expenses may be included in deductible expense in proportion to the revenue recorded when calculating taxable income. When the contract is finalized, the enterprise must calculate the exact expense according to legitimate invoices and documentary evidence in order to increase the expense (in case the actual expense is higher than the accrued expense) or decrease the expense (in case the actual expense is lower than the accrued expense) in the tax period during which the contract is finalized.

Accrued expense on periodic repairs of fixed assets shall be included in annual expense. If actual expense is higher than accrued expense, the difference will be deductible.

2.21. Loss on exchange difference due to reassessment of foreign currency items at the end of the tax period, including exchange difference due to reassessment of closing balance, including: cash, deposits, money in transit, foreign currency receivables (except for loss on exchange difference due to reassessment of foreign currency debts payable at the end of the tax period).

During the investment stage of a new enterprise which is not inaugurated when fixed assets is acquired, exchange differences that occur when making payment for foreign currency items serving investment and exchange differences that occur when reassessing foreign currency debts payable at the end of the fiscal year must be separately recorded. When a fixed asset that is a construction is put into operation, the exchange differences that occur during the investment stage (after offsetting the increase against the decrease) may be gradually included in financial income or financial expense for up to 05 years from the day on which  the construction is put into operation.

During the business operation stage, including investment in acquisition of fixed assets of an enterprise in operation, exchange differences derived from transactions in foreign currencies of foreign currency items shall be recorded as revenue from financial activities or financial expense in the fiscal year.

With regard to foreign currency receivables and foreign currency loans that occur in the period, deductible exchange difference is the difference between exchange rate at the time of debt or loan repayment and exchange rate at the time the debt or loan is initially recorded.

2.22. Provision of sponsorship for education (including sponsorship for vocational education) for illegitimate recipients according to Point (a) or without documentary evidence specified in Point (b) below:

a) Sponsorship for education include: sponsorship for public and private schools of national education system as prescribed by regulations of law on education, provided such sponsorship is not meant to contribute capital or buy shares of schools; sponsorship for infrastructure and equipment serving teaching and learning in schools; sponsorship for regular operations of schools; sponsorships for students of compulsory education institutions, vocational education institutions, and higher education institutions prescribed in the Law on Education (direct sponsorship for students, sponsorship provided via educational institutions, organizations permitted to raise sponsorships as prescribed by law); sponsorship for competitions in the schools subjects participated by learners; sponsorship for establishment of scholarship funds as prescribed by regulations of law on education.

b) Documentary evidence of sponsorship for education includes: certification of sponsorship bearing the signature of the representative of the sponsoring establishment, representative of the legitimate educational institution, students (or an organization permitted to raise sponsorships) that receives the sponsorship (form No. 03/TNDN enclosed with Circular No. 78/2014/TT-BTC); invoices/receipts for purchase of goods (in case of in-kind sponsorship) or proof of payment (in case of monetary sponsorship).

2.23. Provision of sponsorship for healthcare for illegitimate subjects according to Point (a) or without documentary evidence specified in Point (b) below:

a) Sponsorship for healthcare include: Sponsorship for medical facilities established under regulations of law on healthcare, provided the sponsorship is not meant to contribute capital or buy shares of such medical facilities; Sponsorship for medical equipment, medicines; Sponsorships for regular operation of hospitals, medical centers; Monetary sponsorships for patients via an organization permitted to raise sponsorship as prescribed by law.

b) Documentary evidence of sponsorship for healthcare includes: Certification of sponsorship bearing the signature of the representative of the sponsoring enterprise, representative of the unit that receives the sponsorship (or an organization permitted to raise sponsorship) (form 04/TNDN enclosed with Circular No. 78/2014/TT-BTC); invoices/receipts for purchase of goods (in case of in-kind sponsorship) or proof of payment (in case of monetary sponsorship).

2.24. Provision of disaster recovery aid for illegitimate subjects according to Point (a) or without documentary evidence specified in Point (b) below:

a) Disaster recovery aid includes: direct provision of monetary aid or in-kind aid serving disaster recovery for an organization established and operating under the law, for individuals suffering from the disaster via an organization permitted to call for aid as prescribed by law.

b) Documentary evidence of disaster recovery aid includes: Certification of aid bearing the signature of the representative of the contributing enterprise, representative of the unit that suffers from the disaster (or an organization permitted to call for aid) (form 05/TNDN enclosed with Circular No. 78/2014/TT-BTC); invoices/receipts for purchase of goods (in case of in-kind aid) or proof of payment (in case of monetary aid).

2.25. Provision of sponsorship for building houses for the poor for illegitimate recipients according to Point (a) or without documentary evidence specified in Point (b) below:

a) Legitimate recipients of sponsorships for building houses for the poor are poor households as prescribed by the Prime Minister. Sponsorship method: Monetary or in-kind sponsorships provided directly or via an organization permitted to raise sponsorship as prescribed by law.

b) Documentary evidence of such sponsorship includes: Certification of sponsorship bearing the signature of the representative of the sponsoring enterprise, representative of sponsorship recipient (form 06/TNDN enclosed with Circular No. 78/2014/TT-BTC); certification of poor household issued by the local authority (in case of building housing for poor people); invoices/receipts for purchase of goods (in case of in-kind sponsorship) or proof of payment (in case of monetary sponsorship).

If the sponsorship recipient is an organization permitted to raise sponsorship, documentary evidence includes: Certification of sponsorship bearing the signature of the representative of the sponsoring enterprise and the receiving organization; invoices/receipts for purchase of goods (in case of in-kind sponsorship) or proof of payment (in case of monetary sponsorship).

2.26. Provision of sponsorship for scientific research against the law; provision of sponsorship for beneficiaries of incentive policies against the law; provision of sponsorship for extremely disadvantaged areas against State programs.

Sponsorship under a State Program means a program run by the Government in an extremely disadvantaged area (including sponsorship for building new bridges in extremely disadvantaged residential areas) under a project approved by a competent authority.

Provision of sponsorship shall comply with corresponding regulations of law.

Documentary evidence of sponsorship for extremely disadvantaged areas under State program, sponsorship for new bridges in extremely disadvantaged residential areas under a project approved by a competent authority, sponsorship for beneficiaries of incentive policies includes: Certification of sponsorship bearing the signature of the representative of the sponsoring enterprise, the sponsorship recipient (or an organization permitted to raise sponsorship) (form no. 07/TNDN enclosed with Circular No. 78/2014/TT-BTC); ; invoices/receipts for purchase of goods (in case of in-kind sponsorship) or proof of payment (in case of monetary sponsorship).

Regulations on scientific research, procedures and documents about sponsorship for scientific research shall comply with regulations of the Law on Science and Technology and relevant guiding documents.

2.27. Amount provided by an overseas company to cover administrative expenses of its permanent establishment in Vietnam beyond the limit calculated using the formula below:

Amounts provided by the overseas company to cover administrative expenses of its permanent establishment in Vietnam shall be accounted for from the day on which the permanent establishment in Vietnam is established.

The basis for determining expenses and revenue of the overseas company is its financial statement which is audited by an independent audit company, which clearly reflects the revenue and administrative expense of the overseas company, and the amount provided for the permanent establishment in Vietnam to cover its administrative expense.

The permanent establishment in Vietnam of the overseas company must not include administrative expenses covered by the overseas company in its reasonable expenses if it has not followed accounting and invoicing regulations; not paid tax according to declaration.

2.28. Expenses covered with other sources; expenses covered by the enterprise’s science and technology fund; Purchase of golf membership; golfing expenses.

2.29. Expenses related to hire of managers of prize-winning electronic games, casino business in excess to 4% of the revenue from electronic casino games/prize-winning electronic games or casino business.

2.30. Expenses that do not match the assessable revenue, except for:

- The actual expenditures on HIV/AIDS prevention at the workplace, including expenditure on provision of training in HIV/AIDS prevention for employees, expenditure on raising employees’ awareness of HIV/AIDS prevention, fees for HIV consultation, examination and testing, and expenditure on supporting employees who are HIV sufferers.

- Expenditures on performance of duties pertaining to security and defense education, training, activities of militia forces, and other defense and security duties as prescribed;

- The actual expenditures on operations of the enterprise’s internal Communist Party organizations and social-political organizations.

- Expenditures on provision of vocational education and training for employees, including:

+ Payments for teachers, learning materials, equipment serving vocational education, materials for practicing, and other aid for learners.

+ Expenditure on training employees recruited by the enterprise.

- Direct expenditures on employees’ welfare: expenditures on employees’ family occasions; expenditures on holiday allowance or treatment support; expenditures on professional training; expenditures on supporting employees’ families affected by natural disasters, hostilities, accidents, illness; expenditures on rewarding employees’ children for their educational achievements; expenditures on allowances for traveling during holidays of the employees; payment for unemployment insurance, health insurance, and other voluntary insurance for employees (except for life insurance mentioned in Point 2.6, voluntary pension insurance mentioned in Point 2.11 of this Article), and other welfare expenditures. The total expenditures on employees’ welfare incurred in the tax year must not exceed the practical average 1 month’s salary in the tax year.

The practical average 1 month’s salary equals (=) salary fund released within a year divided (:) by 12 months. In case the enterprise has not operated for 12 months, the practical average 1 month’s salary equals (=) salary fund released within the year divided (:) by the number of operating months.

Released salary fund is the total salary paid in the year until the deadline for submitting the annual tax declaration (not including the previous year’s provision for salary fund).

- Other special expenditures of each field shall follow instructions provided by the Ministry of Finance.

2.31. Expenditure on capital construction during the investment stage to acquire fixed assets.

At the beginning of business operation, if the enterprise has not earned revenue but has incurred overheads expenses to maintain its business operation (other than expenditure on acquisition of fixed assets), such expenses will be deductible if they satisfy all conditions.

If the enterprise repays a loan during the investment stage, such repayment shall be included in investment value. During the infrastructural development phase, if the enterprise both pays loan interest and collects deposit interest, they may be offset against each another. The value that remains will be deducted from the investment value.

2.32. Provision of sponsorship for local governments; sponsorships for associations, social organizations; charitable expenses (except for sponsorships for education, healthcare, disaster recovery, construction of houses for poor people, scientific research, beneficiaries of incentive policies, extremely disadvantaged areas under state programs mentioned in Points  2.22, 2.23, 2.24, 2.25, 2.26 in Clause 2 of this Article).

2.33. Expenses directly related to issuance of shares (except for shares classified as liabilities) and dividends (except for dividends of shares classified as liabilities), trading in treasury shares, and other expenses directly related to increase/decrease of the enterprise’s charter capital.

2.34. Payment for the right to mineral extraction beyond the practical amount payable in the year.

If a lump sum is paid, the practical amount payable in the year is based on the total amount of payment for the right to mineral extraction distributed over the remaining years. If the amount is paid annually, the practical payment is the payment for the right to mineral extraction of the year paid by the enterprise to state budget.

2.35. Expenditures on insurance business, lottery business, securities trading, and some special business activities shall comply with corresponding documents issued by the Ministry of Finance.

2.36. Payment of fines for administrative violations, including: traffic offenses, violations against regulations on business registration, violations against regulations statistical accounting; violations against regulations of law on taxation, including late payment interest prescribed by the Law on Tax administration, and fines for other administrative violations prescribed by law.

2.37. Input VAT that has been deducted or refunded; input VAT on fixed assets being automobiles cars for the transport of up to 9 persons that exceeds the deductible limit prescribed in legislative documents on VAT; CIT other than CIT paid by the enterprise on behalf of the foreign contractor under the main contract which stipulates that the revenue earned by the foreign contractor and sub-contractors is exclusive of CIT; personal income tax unless the employment contract states that the employee’s salary is exclusive of personal income tax.

Article 7. Other incomes

Other incomes include:8

1. Incomes from transfer of stakes or securities specified in Chapter IV of this Circular.

2. Incomes from transfer of real estate specified in Chapter V of this Circular.

3. Income from transfer of investment projects; transfer of right to participate in an investment project, right to mineral exploration and/or mineral extraction and/or mineral processing.

4. Income from the right to ownership, right to enjoyment of property, including royalties; incomes from intellectual property rights; incomes from technology transfers defined by law.

The income from intellectual property right or technology transfers equals (=) the proceeds minus (-) cost price or cost of creation of intellectual property right or technology transferred minus (-) cost of maintenance, upgrade and development of the intellectual property right or technology transferred and other deductible expenses.

5. Incomes from lease of assets in any shape or form.

The income from lease of an asset equals (=) the proceeds from the lease minus (-) depreciation, maintenance costs, rent in case of sublet and other deductible expenses related to the lease.

6. Income from transfer or liquidation of assets (except real estate) and other financial instruments.

This income equals (=) the proceeds from the transfer or liquidation minus (-) remaining value of the transferred or liquidated asset at the time of transfer or liquidation and other deductible expenses related to the transfer or liquidation.

7. Incomes from deposit interest or loan interest, including late payment interest, instalment interest, credit guarantee fee and other fees specified in the loan contract.

- If the income from deposit interest or loan interest is higher than the loan interest payable, the amount that remains after offsetting shall be considered other incomes when calculating taxable income.

- If the income from deposit interest or loan interest is lower than the loan interest payable, the amount that remains after offsetting shall be deducted from the income from primary business operation when calculating taxable income.

8. Income from selling foreign currencies, which equals (=) the proceeds from selling foreign currencies minus (-) buying prices for the foreign currencies.

9.9Income from exchange differences, which is determined as follows:

In the tax year, the enterprise has exchange differences that occur in the period and exchange differences because of reassessment of foreign currency debts payable at the end of the fiscal year:

- The exchange differences that occur in the period and are related to revenues and expenses of the enterprise’s main business operation shall be included in expenses or revenues of the enterprise’s main business operation. Regarding the exchange differences that occur in the period and are not related to revenues and expenses of the enterprise’s main business operation, the loss on exchange difference shall be aggregated with financial expense, the profit from exchange difference shall be aggregated with other incomes when calculating taxable income.

- Profit from exchange difference because of reassessment of debts paid in foreign currencies at the end of the fiscal year may be offset against the loss on exchange difference because of reassessment of debts paid in foreign currencies at the end of the fiscal year. After offsetting, profit or loss derived from exchange difference related to revenues and expenses of the enterprise’s main business operation shall be respectively aggregated with the revenue or expense from the enterprise’s main business operation. The profit or loss derived from exchange difference that is not related to revenues and expenses from the enterprise’s main business operation shall be respectively aggregated with other incomes or financial expense when calculating taxable income.

With regard to foreign currency receivables and foreign currency loans that occur in the period, exchange difference included in deductible expenses or incomes is the difference between exchange rate at the time of debt or loan repayment and exchange rate at the time the debt or loan is initially recorded.

The aforesaid exchange differences do not include exchange differences because of reassessment of closing balance, including: cash, deposit, money in transit and foreign currency receivables.

10. Collected bad debts.

11. Debts payable without identified creditors.

12. Omitted incomes from previous years’ business operation that are discovered afterwards.

13. In the cases where an enterprise collects fines or compensation for breach of contract or rewards for fulfillment of the contractual commitment, if the collected amount is higher than the fines or compensation for breach of contract which are not fines for administrative violations defined by laws on administrative violations, the difference that shall be aggregated with other incomes.

In the cases where an enterprise collects fines or compensation for breach of contract or rewards for fulfillment of the contractual commitment, if the collected amount is lower than the fines or compensation for breach of contract which are not fines for administrative violations defined by laws on administrative violations, the difference shall be deducted from other incomes. If no other incomes are earned within the year, the difference shall be deducted from income from business operation.

Collected fines and compensation mentioned above do not include the fines and compensation deducted from the construction value in the investment stage.

14.10Differences from the reassessment of assets as prescribed to contribute capital or transfer assets upon full division, partial division, amalgamation, merger or conversion (except for equitization or rearrangement of wholly state-owned enterprises) shall be determined as follows:

a) Increase or decrease resulting from the reassessment of assets is the difference between the reassessed value and the residual book value of assets and shall be aggregated once in other incomes (for increase) or deducted from other incomes (for decrease) in a tax period for determining taxable incomes of the enterprise whose assets are reassessed.

b) Increase or decrease resulting from the reassessment of LUR for: capital contribution (where the LUR transferee may gradually aggregate this value with deductible expense), transfer upon full division, partial division, amalgamation, merger or conversion of the enterprise; or for capital contribution to investment projects to build houses and infrastructure facilities for sale shall be aggregated once with other incomes (for increase) or deducted from other incomes (for decrease) in a tax period for determining taxable incomes of the LUR transferor.

Particularly, the increase resulting from assessment of LUR for acquisition of fixed assets serving the enterprise’s business operation which must not be depreciated or gradually aggregated with deductible expense by the transferee may be gradually aggregated with other incomes of the LUR transferor for up to 10 years from the year in which LUR is contributed as capital. The LUR transferor shall notify the number of years they will aggregate the increase with other incomes when making the annual CIT declaration of the first year in which such income is declared (the year in which the LUR to be contributed as capital are reassessed).

In the cases where after capital contribution, the enterprise keeps transferring stakes in the form of LUR (including the case where capital is contributed before expiration of the 10-year period), the income from the transfer of stakes in the form of LUR shall be accounted for and declared as income from real estate transfer, which is taxable.

The difference resulting from the reassessment of LUR includes: the difference between the reassessed value and book value of long-term LUR, or the difference between the reassessed value and remaining value of limited-term LUR after aggregation with income.

c) The enterprise that receives assets contributed as capital or assets transferred upon full division, partial division, amalgamation, merger or conversion of an enterprise may depreciate such assets or gradually aggregate them with expense at the reassessed price (unless the value of limited-term LUR is ineligible for depreciation or aggregation with expense under regulations).

15. Monetary and in-kind gifts; monetary and in-kind incomes from sources of sponsorships; incomes from marketing aid, subsidies, discounts, sales promotion and other aid. The value of in-kind income is determined according to the value of a similar goods/services at the time of receipt.

16. Amounts of money, property and other material benefits an enterprise receives from other organizations and individuals under agreements or contracts conformable with civil laws when the enterprise is relocated and transfers its land area after deduction of costs such as relocation cost (transportation and installation), remaining value of fixed assets and other costs (if any).

The amounts of money, property and material benefits an enterprise receives under state policies whose factory is relocated under approval by a competent authority shall be managed and used in accordance with relevant regulations of law.

17. Accrued expense that is not paid for or not completely paid for by the end of the period but is not recorded as a decrease in expense by the enterprise; reversed provision for construction warranty.

18. Incomes related to the sale of goods or provision of services that are not included in revenue such as: reward for early launch, bonuses in the restaurant and hotel industry after deduction of relevant costs.

19. Income from selling scrap after deduction of collection and sales expenses, which are determined as follows:

- In the cases where an enterprise earns income from selling scrap in the process of manufacture of the products eligible for CIT incentives, such income is also eligible for CIT incomes.

- In the cases where an enterprise earns income from selling scrap in the process of manufacture of the products that are not eligible for CIT incentives, such income shall be aggregated with other incomes.

20. Refunds of export or import duties on goods that have been exported or imported in reality in the current year shall be recorded as decrease in expense of the year. Refunds of export or import duties on goods that have been exported or imported in reality in the previous year shall be aggregated with other income of the year in which such income is earned. If the income is directly related to a business line eligible for CIT incentives, it is also eligible for CIT incentives. If the income is not directly related to a business line eligible for CIT incentives, it shall be aggregated with other incomes.

21. Incomes from contribution of share capital, domestic business cooperation distributed before CIT is paid.

22.11In the cases where an enterprise admits a new capital contributor whose contributed capital is higher than the value of capital he/she is obliged to contribute:

If such positive difference is owned by the enterprise and used to supplement the enterprise’s capital, it will not be deductible.

If such positive difference is divided among old contributors, it will be considered incomes of old contributors.

23. Other incomes defined by law.

Article 8. Tax-free incomes

1.12Incomes from farming, husbandry, aquaculture and salt production of cooperatives; incomes of cooperatives engaged in agriculture, forestry, fisheries and salt production in disadvantaged areas or extremely disadvantaged areas; incomes of enterprises from farming, husbandry and aquaculture in extremely disadvantaged areas; incomes from fishing activities.

a) Incomes from farming (including also products from planted forests), husbandry, aquaculture, processing of agriculture and aquaculture products of cooperatives and enterprises that are given tax incentives (including preferential tax rates, tax exemption and reduction) prescribed in this Circular are incomes from products that are result of their farming, husbandry, aquaculture, and processing of agriculture and aquaculture products (including those purchased for further processing).

Incomes from processed products derived from agriculture and aquaculture products must satisfy all of the following conditions in order to be given tax incentives (including preferential tax rates, tax exemption and reduction):

- The ratio of value of raw materials to production cost is at least 30%.

- Processed products are not subject to special excise tax, except for the cases decided by the Prime Minister at the request of the Ministry of Finance.

The enterprise must separate incomes from processed agriculture and aquaculture products in order to be eligible for CIT incentives.

Tax-free incomes mentioned in this Clause include incomes from liquidation of farming, husbandry, aquaculture products (except for liquidation of rubber plantations), incomes from sale of refuses related to the agriculture, aquaculture products and processed products thereof.

Farming, husbandry and aquaculture products of cooperatives and enterprises are identified according to Level 1 codes of Vietnam s Industry System.

2. Incomes from provision of technical services directly serving agriculture, including: irrigation, land plowing and harrowing, dredging, pest control, harvesting services.

3.13Incomes from the execution of a scientific research and technological development contract are eligible for tax exemption until expiration of such contract but not more than 3 years from the day on which the revenue is earned from execution of such contract;

Incomes from the sale of products that are results of new technologies applied in Vietnam for the first time are eligible for tax exemption for up to 5 years from the day on which the revenue from sale of products is earned;

Incomes from the sale of experimental products during the experimental production period apply relevant laws. 

a) Incomes from execution of a scientific research and technological development contract must satisfy the following requirements to be eligible for tax exemption:

- A certificate of scientific research activity is obtained;

- Such scientific research and technological development contract is certified by competent science authority.

b) Incomes from the sale of products that are results of new technologies applied in Vietnam for the first time are eligible for tax exemption if the application of such new technologies is certified by a competent science authority.

4. Incomes from manufacture and/or trade of goods and/or service provision of an enterprise whose employees that are disabled people, rehabilitated drug abusers, HIV patients make up at least 30% of its annual average number of employees.

The tax-free incomes specified in this Clause do not include other incomes specified in Article 7 of this Circular.

An enterprise eligible for tax exemption specified in this Clause means a enterprise whose average number of employees in the year is at least 20, excluding finance and real estate enterprises.

An enterprise earning tax-free incomes specified in this Clause must satisfy all of the following requirements:

a) If the enterprise employs disabled people, it must obtain a certification of number of disabled employees by a competent health authority.

b) If the enterprise employs rehabilitated drug abusers, it must obtain certificates of completion of rehabilitation issued by rehabilitation centers or relevant competent authorities.

c) If the enterprise employs HIV patients, it must obtain a certification of number of HIV-positive employees by a competent health authority.

5. Incomes from provision of vocational training for ethnics, disabled people, disadvantaged children, ex-offenders, rehabilitated drug abusers or HIV patients. If the vocational training institution also accepts other types of learners, the tax-free income shall be determined according to the ratio of the number of learners that are ethnics, disabled people, disadvantaged children, ex-offenders, rehabilitated drug abusers or HIV patients to the total number of learner.

Tax-free income from vocational training must satisfy all of the following requirements:

- The vocational training institution is established and operating under regulations of law on vocational training.

- There is a list of learners that are ethnics, disabled people, disadvantaged children, ex-offenders, rehabilitated drug abusers or HIV patients.

6. Distributed incomes from capital contribution, share purchase, domestic business cooperation after the recipient of capital contribution, share issuer or business partner has paid CIT in accordance with the Law on Corporate income tax, even if they are eligible for CIT incentives.

Example 11: Enterprise B receives capital contribution from Enterprise A. Pretax income of Enterprise A from capital contribution to Enterprise B is VND 100 million.

- If Enterprise B is not eligible for CIT incentives and has fully paid CIT, including that on the income receivable by Enterprise A, the income received by Enterprise A from capital contribution is VND 78 million [(100 million – (100 million x 22%)] and Enterprise A is eligible for exemption of CIT on such income of VND 78 million.

- If Enterprise B is eligible for 50% reduction of CIT payable and has fully paid CIT, including that on the income receivable by Enterprise A, the income received by Enterprise A from capital contribution is VND 89 million [(100 million – (100 million x 22% x 50%)] and Enterprise A is eligible for exemption of CIT on such income of VND 89 million.

-If Enterprise B is eligible for CIT exemption, the income received by Enterprise A from capital contribution is VND 100 million and Enterprise A is eligible for exemption of CIT on such income of VND 100 million.

7. Sponsorships for education, scientific research, art, charity and other social activities in Vietnam.

If the organization receiving the sponsorship uses it improperly, it shall pay CIT on the amount used improperly in the tax period in which the sponsorship is used improperly.

The organization receiving sponsorship must be established and operating under the law and comply with regulations of law on statistical accounting.

8. Income from first–time transfer of Certified Emissions Reductions (CERs); CIT shall be levied upon subsequent transfers of CERs.

To be eligible for tax exemption, the sale or transfer of CERs must be certified by a competent environment authority.

9.14Income of the Vietnam Development Bank from credit extension serving development investment, credit extension serving export assigned by the State; income of Bank for Social Policies derived from credit extension to the poor and other beneficiaries of incentive policies; income of Vietnam Asset Management Company; income from revenue-generating activities assigned by the State of state funds, including: Vietnam social Insurance Fund, Deposit insurance Corporation, Health Insurance Fund, Apprenticeship Enhancement Fund, Overseas Employment Support Fund of the Ministry of Labor, Famer Support Fund, Vietnam Legal Aid Fund, Public Telecommunications Fund, Local Development Investment Fund, Vietnam Environmental Protection Fund, Credit Guarantee Fund for Small and Medium-sized Businesses, Cooperative Development Aid Fund, Poor Women Support Fund, Fund for Protection of Overseas Citizens and Legal Entities, Housing Development Fund, Fund for Development of Small and Medium-sized, Fund for National Scientific and Technological Development, National Technological Innovation Fund; Fund for Self-employment of Poor People; incomes from performance of tasks assigned by the State of Fund for Land Development and other non-profit funds established by the Government or the Prime Minister.

Taxes on incomes other than those from performance of tasks assigned by the State must be declared and paid as prescribed.

10. Undistributed income:

a) Undistributed income of private establishments investing in education, healthcare and other fields in which private sector investment is encouraged (including judicial expertise offices) retained for investment in their development prescribed by regulations of law on education, healthcare and other fields in which private sector involvement is encouraged (hereinafter referred to as “public sector”). Tax-free undistributed income of the establishments mentioned in this Clause (hereinafter referred to as “private investors”) does not include that retained for investment in other fields or business lines other than public sector.

Private investors include:

- Non-public establishments whose investment in the public sector is legitimate as prescribed by competent authorities.

- Enterprises established to invest in the public sector and whose operation is legitimate as prescribed by competent authorities.

- Public service agencies contributing capital, raising capital or engaging in business cooperation in establishing independent units or enterprises operating in the public sector under decisions of competent authorities.

Private investors must satisfy the criteria and standards established by the Prime Minister.

b) Undistributed income of a cooperative for acquisition of its assets.

c) If the undistributed income is distributed or spent improperly, CIT arrears shall be collected at the rate applied at that time and penalties for tax offences shall be imposed.

11. Income from technology transfers in the favored fields to an organization or individual in an extremely disadvantaged area.

Procedures for technology transfers are specified in the Law on Technology transfers and the Government s Decree No. 133/2008/ND-CP dated December 31, 2009.

Favored fields are those on the list promulgated together with Decree No. 133/2008/ND-CP and its amendments (if any).

12.15  Incomes of bailiff offices (except for incomes from activities other than bailiff’s activities) during the experimental period shall comply with regulations of law on enforcement of civil judgments.

Bailiff offices and bailiff activities are specified in relevant legislative documents.

Article 9. Loss determination and loss carryforward

1. Loss incurred in a tax period means a negative difference in assessable income, excluding loss carried forward from previous years.

2. When an enterprise makes a loss according to the annual tax declaration, the loss shall be fully and continuously offset against the succeeding years income. The carryforward period shall not exceed 5 years.

The enterprise shall temporary offset the loss against quarterly incomes after the quarterly statement is prepared and officially offset the loss against income when the annual tax declaration is prepared.

Example 12: In 2013, Enterprise A made a loss of VND 10 billion. In 2014, Enterprise A earned an income of VND 12 billion. The loss of VND 10 billion shall be fully offset against the income earned in 2014.

Example 13: In 2013, Enterprise B made a loss of VND 20 billion. In 2014, Enterprise B earned an income of VND 15 billion:

+ Enterprise B must offset the loss of VND 15 billion against the income earned in 2014;

+ The remaining loss of VND 5 billion shall be continuously offset against incomes earned in the subsequent years for up to 5 years.

- The loss made by an enterprise in one quarter may be offset against income earned in the next quarter of the same fiscal year. When preparing the annual CIT declaration, the enterprise shall determine the loss made in the year and fully and continuously offset it against taxable income earned in the subsequent years.

- Enterprises shall determine the amount of loss offset against income themselves. If a new loss is made before the old loss is completely carried forward, the new loss shall be fully continuously carried forward for up to 5 years from the year succeeding the year in which the new loss is made.

If the loss determined by an inspecting authority does not match that determined by the enterprise, the loss determined by the inspecting authority shall be applied and shall be fully and continuously carried forward for up to 5 subsequent years.

The loss that remains after expiration of the 5-year period must not be offset against incomes earned in the subsequent years.

3.16Any enterprise that undergoes conversion, merger, amalgamation, partial division, full division, dissolution, or bankruptcy must submit a terminal tax declaration to the tax authority up to the date of issuance of the decision on conversion, merger, amalgamation, partial division, full division, dissolution, or bankruptcy by a competent authority (except for the cases in which terminal tax declaration is not required). The loss made by the old enterprise before conversion, merger, amalgamation, partial division, full division, dissolution, or bankruptcy must be sorted by year and offset against income earned in the same year by the enterprise after conversion, merger, amalgamation, partial division, full division, dissolution, or bankruptcy, or be offset against incomes in the next years of the enterprise after conversion, merger, amalgamation, partial division, full division, dissolution, or bankruptcy, provided loss is not carried forward for more than 05 consecutive years from the year succeeding the year in which loss is made.

The loss that is made by the enterprise before partial division or full division and can be carried forward shall be divided among the enterprises after the division process is complete according to the distribution ratio of charter capital.

Article 10. Contribution to an enterprise’s science and technology development fund

1. An enterprise that is established and operating within Vietnam’s law may contribute up to 10% of its annual assessable income to its scientific and technological development fund before calculating corporate income tax. The enterprise shall determine the amount contributed to the scientific and technological development funds before calculating corporate income tax. If the enterprise makes annual contribution to its science and technology development fund, it must prepare a report on contribution to and use of the science and technology development fund and specify the contribution in the annual CIT declaration. The report shall be enclosed with the annual CIT declaration.

Regarding enterprises over 50% of charter capital of which is held by the State, apart from compliance with provisions of this Article, must maintain the minimum contributions specified in the Law on Science and technology

2. Within 5 years from the contribution date, if at least 70% of the science and technology development fund is not used or not used properly, the enterprise shall pay CIT on the income that was contributed to science and technology development fund but was not used or not properly used and interest thereon.

The amount that is not properly used shall not be aggregated with the amount used for development of science and technology.

- CIT shall be paid at the rate applied to the enterprise during the contribution period.

- Interest shall be charged on the tax arrears at the interest rate of 1-year treasury bonds (or interest rate of 1-year treasury bills) applied at the time of arrears collection for a 2-year period.

3. An enterprise’s science and technology development fund may only be used for its investment in scientific research and technological development in Vietnam. Expenditures from the science and technology development fund must have adequate and valid invoices and documentary evidence as prescribed by law.

4. An enterprise must not aggregate expenditures from its science and technology development fund with its operating cost when calculating taxable income. In the cases where an enterprise’s science and technology development fund is not sufficient to cover the cost of its scientific research and technological development, the difference may be aggregated with its operating cost when calculating taxable income.

5. In case of conversion, amalgamation or merger, the transferee enterprise derived from such event shall inherit and take responsibility for the management and use of the transferor enterprise’s science and technology development fund.

In case of full division or partial division of an enterprise whose science and technology development fund is not completely used, the transferee enterprise derived from such event shall inherit and take responsibility for the management and use of the transferor enterprise’s science and technology development fund. The enterprise shall decide the division of its science and technology development fund and apply for a registration with the tax authority.

6.In the cases where a decree of the Government provides for contribution to science and technology development funds otherwise, the Ministry of Finance and the Ministry of Science and Technology will promulgate a Joint Circular to provide guidance.

Article 11. CIT rates

1. From January 01, 2014, CIT rate is 22%, except for the cases specified in Clause 2 and Clause 3 of this Article and the cases in which preferential rates are applied.

Example: The fiscal year of an enterprise begins on April 14, 2013 and ends on March 31, 2014. The enterprise is applying ordinary CIT rates and is not eligible for preferential rates. When preparing the annual CIT declaration, the amount of CIT payable by the enterprise shall be calculated as follows:

From January 01, 2016, the CIT rate of 20% shall apply to enterprises that are applying the CIT rate of 22%.

2. An enterprise that is established within Vietnam’s law (including cooperatives and public service agencies) whose revenue from manufacture and/or trade of goods and/or service provision does not exceed VND 20 billion shall apply the CIT rate of 20%.

The total revenue as the basis for determination of eligibility for 20% CIT rate specified in this Clause is the total revenue from selling goods/services of the preceding year according to [01] and [08] on Appendix 03-1A/TNDN enclosed with Form No. 03/TNDN promulgated together with Circular No. 156/2013/TT-BTC.

Example 14: Company A’s fiscal year begins on April 01 of a year and ends on March 31 of the next year. If its revenue from selling goods/services [01] and financial income [08] on Appendix 03-1A/TNDN enclosed with Form 03/TNDN of the fiscal year 2013 (from April 01, 2013 to March 31, 2014 inclusive) does not exceed VND 20 billion, it is eligible for 20% CIT in the fiscal year 2014 (from April 01, 2014 to March 31, 2015 inclusive). If the total revenue earned in 2014 exceeds VND 20 billion, it shall apply 22% CIT in the fiscal year 2015 (from April 01, 2015 to March 31, 2016 inclusive).

If the preceding year is shorter than 12 months, the total revenue as the basis for determination of eligibility for 20% CIT is the total revenue from selling goods/services of the preceding year according to [01] and [08] on Appendix 03-1A/TNDN divided by (:) the number of months in the year. If the average monthly revenue does not exceed VND 1.67 billion, the enterprise will be eligible for 20% CIT in the succeeding year.

Example 15: Company A’s fiscal year is the same as the calendar year. Its business operation was suspended for 3 months in 2014 and resumed on April 01, 2014. Its revenue from selling goods/services [01] and financial income [08] on Appendix 03-1A/TNDN was VND 18 billion. The average monthly revenue is VND 2 billion (18 billion divided by (:) 9 months). Company A will not be eligible for 20% CIT and has to apply 22% CIT in 2015. It may apply 20% CIT in 2015 if its average monthly revenue in 2014 does not exceed VND 1.67 billion.

Regarding a new enterprise that has been established within less than 12 months. It shall provisionally declare tax at the rate of 22% (except for those eligible for tax incentives). At the end of the fiscal year, if its average monthly revenue does not exceed VND 1.67 billion. It shall apply 20% CIT (except for the incomes specified in Clause 3 Article 18 of this Circular). The total revenue is determined according to [01] and [08] on Appendix 03-1A/TNDN enclosed with Form 03/TNDN promulgated together with Circular No. 156/2013/TT-BTC. If the average monthly revenue in the first year does not exceed VND 1.67 billion, the enterprise may apply 20% CIT in the succeeding year.

3. The rate of CIT on petroleum exploration and extraction in Vietnam is from 32% to 50%. The enterprise having a project for petroleum exploration and extraction shall submit the project dossier to the Ministry of Finance for submission to the Prime Minister. The Prime Minister shall decide the CIT rate on a case-by-case basis.

The rate of CIT on exploration and extraction of valuable resources (platinum, gold, silver, tin, tungsten, gemstones, rare earth other than petroleum) is 50%. 40% CIT shall apply to valuable resources mines whose area in an extremely disadvantaged area which is eligible for CIT incentives according to Decree No. 218/2013/ND-CP.

Chapter III

TAX-COLLECTING AUTHORITIES

Article 12. Identification

An enterprise shall pay tax at the tax authority in the same province as its headquarters. In the cases where an enterprise has a factory in a province other than that where its headquarters is located, tax shall be paid in both provinces.

The distribution of tax specified in this Clause does not apply to enterprises having works, work items or construction establishments that do not keep independent accounting records.

Article 13. Determination of CIT payable

The amount of CIT payable in the province where the enterprise’s factory is located equals (=) CIT payable in the period multiplied by (x) the ratio of expense of the factory to the total expense of the enterprise, which is calculated as follows:

The preceding year’s annual CIT declaration of the enterprise shall be the basis for calculation of this ratio.

In the cases where an enterprise has factories in various provinces, the annual CIT declaration of 2008 shall be the basis for calculation of the ratio of expense of the headquarters to expense of the factories. This ratio shall remain unchanged from 2009 onwards.

Regarding a new enterprise, an operating enterprise that establishes new or shuts down its factories in various provinces, it shall determine the expense ratio of the first tax period in which such change is made. From the succeeding tax period, the expense ratio shall remain unchanged.

Financially dependent units of enterprises earning incomes from activities other than their primary business lines shall pay tax in the provinces where such activities are done.

Chapter IV

INCOMES FROM STAKE TRANSFER AND SECURITIES TRANSFER

Article 14. Incomes from stake transfer

1. Scope:

Income from stake transfer of an enterprise means income from full or partial transfer of the enterprise’s investment in one or more than one entities (including selling of enterprises) Time for determination of income from take transfer is the time for transfer of the stake ownership.

In the cases where an enterprise sells an entire single-member limited liability company under the ownership of an organization by transferring stakes and real estate, it shall declare and pay CIT on real estate transfer and complete the CIT declaration form (Form 08) enclosed herewith.

In the cases where an enterprise transfers its stakes in exchange for assets or other material benefits (shares, fund certificates, etc.) and generates income, it shall pay CIT. The values of assets, shares, fund certificates, etc. shall be determined according to their market prices at the time of transfer.

2. Basis for tax calculation:

a) Assessable income from stake transfer is calculated as follows:

Where:

- The transfer price is the total value earned by the transferor under the transfer contract.

If the transfer contract permits payment by installments or deferred payment, the revenue from the transfer contract does not include interest.

If the transfer contract does not specify the transfer price or the tax authority finds that the transfer price is not reasonable, the tax authority is entitled to carry out an inspection and impose the transfer price. If the price for transfer of an enterprise’s stake is not reasonable, the tax authority is entitled to reassess the value of the entire enterprise at the time of transfer to determine the transfer price for the stake transferred.

The transfer price shall imposed on the basis of investigation documents of the tax authority, other transfer prices at that same time, in the same business organization or under similar transfer contract at the time of transfer. If the transfer price imposed by the tax authority is not appropriate, the price determined by a professional valuation organization shall apply.

If the enterprise transfers stake to another entity, documentary evidence of non-cash payments is required if the value of the stake transferred under the transfer contract is VND 20 million or above. If documentary evidence of non-cash payments is not available, the tax authority is entitled to impose the transfer price.

-17The purchasing price of the stake shall be determined on a case-by-case basis as follows:

+ In case of transfer of a stake in establishment of an enterprise, it is the accumulated value of the stake up to the date of stake transfer according to accounting records and is certified by investors or participants in the business cooperation contract, or according to audit results provided by an independent audit company if the enterprise is a wholly foreign-owned enterprise.

+ In case of stake redemption, it is the value of the stake at the time of redemption. The purchasing price is based on the stake redemption contract and payment receipts.

If the enterprise is able to do accounting in foreign currencies and complies with regulations of law on accounting of stake transfer in foreign currencies, the transfer price and purchasing price of the stake shall be expressed in a foreign currency. In the cases where an enterprise that does accounting in VND transfers a stake in a foreign currency, the transfer price must be converted into VND according to the buying rate announced by the commercial bank where the enterprise’s account it opened at the time of transfer.

Transfer cost means expenses directly related to the transfer and supported by legitimate invoices and documentary evidence. If the transfer cost is incurred overseas, original documents must be certified by a notary’s office or independent audit organization of the countries where the cost is incurred and be translated into Vietnamese (the translation must be certified by an authorized representative).

Transfer cost consists of: cost of necessary legal procedures for the transfer; fees and charges payable while following transfer procedures; expenditures on transaction, negotiation, contract conclusion and other expenditures supported by documentary evidence.

Example 16: Enterprise A contributes VND 400 billion, which consists of VND 320 billion in factory value and VND 80 billion in cash, to establish a partnership that produces toilet paper. Then enterprise A transfers the stake to Enterprise B for VND 550 billion. Enterprise A’s stake according to accounting records at the time of transfer is VND 400 billion and the transfer cost is VND 70 billion. Assessable income from the stake transfer is VND 80 billion ((550 - 400 - 70).

b) An enterprise’s income from stake transfer shall be classified as other incomes and aggregated with taxable income.

c) In the cases where a foreign organization doing business in Vietnam or earning income in Vietnam without following the Law on Investment and the Law on Enterprises (hereinafter referred to as “foreign contractors") transfers a stake:

The stake transferee shall determine, declare, withhold and pay the CIT payable by the foreign organizations on its behalf. If the transferee is also a foreign organization that does not follow the Law on Investment and the Law on Enterprises, the enterprise established under Vietnam’s law in which capital is invested by that foreign organization shall declare and pay the CIT payable by the foreign organization on its behalf.

Tax shall be declared and paid in accordance with legislative documents on tax administration.

Article 15. Incomes from securities transfer

1. Scope:

An enterprise’s income from securities transfer means income from transfer of shares, bonds, fund certificates and other securities.

In the cases where an enterprise issues additional shares to raise capital, the difference between the issuance price and face value shall not be aggregated with taxable income.

In the cases where an enterprise undergoes full division, partial division, amalgamation or merger and swap shares at the time of full division, partial division, amalgamation or merger, income earned there from (if any) is subject to CIT.

In the cases where an enterprise transfers securities in exchange for assets or other material benefits (shares, fund certificates, etc.) and generates income, it shall pay CIT. The values of assets, shares, fund certificates, etc. shall be determined according to their selling prices at the time of transfer.

2. Basis for tax calculation:

Assessable income from securities transfer in the period equals (=) selling price for securities minus (-) buying price for securities minus (-) transfer cost.

- The selling price for securities is determined as follows:

+ For listed securities and securities of unlisted public companies registered at securities trading centers, the selling price is the selling price in reality (matched price or agreed price) announced by the Stock Exchange and the securities trading center.

+ For securities of companies other than those mentioned above, the selling price is the transfer price written on the transfer contract.

- The buying price for securities is determined as follows:

+ For listed securities and securities of unlisted public companies registered at securities trading centers, the buying price is the buying price in reality (matched or agreed price) announced by the Stock Exchange and the securities trading center.

+ For securities purchased at auction, the buying price is the succeeding bid written on the announcement of successful bidder issued by the auctioneering organization and the payment order.

+ For securities other than those mentioned above, the buying price is the transfer price written on the transfer contract.

- Transfer cost means expenses directly related to the transfer and supported by legitimate invoices and documentary evidence.

Transfer cost consists of: cost of necessary legal procedures for the transfer; fees and charges payable while following transfer procedures; securities depository fee imposed by the State Securities Commission and receipt vouchers of the securities company; authorization fee according to receipt vouchers of the authorized unit; expenditures on transaction, negotiation, contract conclusion and other expenditures supported by documentary evidence.

An enterprise’s income from securities transfer shall be classified as other incomes and aggregated with taxable income.

Chapter V

INCOMES FROM REAL ESTATE TRANSFER

Article 16. Taxpayer

1. Enterprises in any economic sectors and fields that earn incomes from real estate transfer, real estate enterprises earning incomes from sublease of land shall pay tax on such incomes.

2. Incomes from real estate transfer include: incomes from transfer of LUR, land leasehold (including transfer of project in association with transfer of LUR or land leasehold defined by law); Incomes form sublease of land by real estate enterprises defined by land laws, regardless of availability of infrastructure and construction works on land; incomes from transfer of houses and construction works on land, including property connected thereto if the property value is separated in transfer, regardless of transfer of LUR or land leasehold; incomes from transfer of property on land; incomes from transfer of the right to ownership or enjoyment of houses.

Incomes from sublease of land by real estate enterprises do not include incomes of enterprises that only lease out houses, infrastructure or construction works on land.

Article 17. Basis for tax calculation

The basis for calculating CIT on income from real estate transfer is the assessable income and CIT rate.

Assessable income equals (=) taxable income minus (-) previous years’ loss on real estate transfer (if any).

1. Taxable income.

Taxable income from real estate transfer equals (=) revenue from real estate transfer minus (-) costs of real estate and deductible expenses of real estate transfer.

a) Revenue from real estate transfer.

a.1) Revenue from real estate transfer is determined according to the transfer price in reality under the real estate transfer contract, including surcharges and extra fees (if any).

In the cases where the price for transfer of LUR under the real estate transfer contract is lower than that imposed by the People’s Committee of the province at the time of contract conclusion, the latter shall apply.

- The revenue as the basis for calculating CIT shall be determined when the real estate is delivered by the seller to the buyer, whether or not the buyer has registered the ownership of such real estate with a competent authority.

- In the cases where an enterprise executes a construction project for sale or for lease and collect advances from customers in any shape or form, the revenue as the basis for calculating CIT shall be determined when such advances are collected from customers. To be specific:

If the enterprise collects money from its customers and is able to determine the expense and revenue (including accrued expense of unfinished items), CIT shall be declared and paid according to the difference between revenue and expense.

+ If the enterprise collects money from its customers but is not able to determine the expense, it shall pay provisional CIT at 1% on the revenue and such revenue is yet to be aggregated with taxable revenue in the year.

Upon delivery of real estate, the enterprise shall prepare a CIT declaration which specifies the amount of CIT payable. If the paid CIT is lower than the CIT payable, the enterprise shall fully pay the arrears. If the paid CIT is higher the CIT payable, the enterprise may deduct the overpaid tax from the CIT payable in the next period or claim a refund.

Regarding a real estate enterprise that advances from its customers and declare CIT on the revenue which is yet to be aggregated with taxable revenue in the year and incur expenses of advertising, marketing, sales promotion, brokerage commissions when making offers in the year in which revenue is earned, such expenses are yet to be aggregated with expense of that year. The expenses of advertising, marketing, sales promotion, brokerage commissions shall be aggregated with deductible expense within the prescribed limit in the first year in which real estate is delivered and taxable revenue is earned.

a.2) Taxable revenue in some cases:

- Taxable revenue from sublease of land is the rent paid by the tenant under the lease contract. In the cases where tenant pays a lump sum rent paid in advance for multiple years, the taxable revenue shall be divided by (:) the number of years or equal the lump sum payment. This method may only be applied if the enterprise has fulfilled its liabilities to the State and obligations to the tenant until the expiration of the lease term.

In the cases where an enterprise eligible for CIT incentives determines that the taxable revenue is the lump sum rent paid in advance for multiple years, the preferential CIT shall be based upon the CIT on the lump sum rent divided (:) by the number of years for which the rent is paid in advance.

- In the cases where a credit institution receives the LUR as collateral for a loan and such LUR is transferred, the taxable revenue is the transfer price agreed by the parties.

- In the cases where the LUR transferred is a distressed property, the taxable revenue is the transfer price agreed by the parties or imposed by the valuation council.

The determination of revenue in the cases specified in a.2 must comply with the rules specified in a.1.

b) Real estate transfer expenses

b.1) Rules for expense determination:

- Deductible expenses of real estate transfer must correspond to the taxable revenue, satisfy the conditions for deductibility and are not non-deductible expenses specified in Article 6 of this Circular.

- In the cases where part of a project is transferred, general expenses of the project and expense of the completed part of the project shall be determined according to the area (m²) transferred to determine taxable income from the land area transferred, including: expense of internal roads and parks; investment in construction of water supply and drainage system; substations; compensation for property on land; expenditures on compensation for land clearance and relocation and funding for provision of compensation for land clearance approved by a competent authority which has not been deducted from land levies or land rents that are payable to the State, other investments in the land area related to the transfer or LUR or land leasehold.

The aforementioned expense shall be calculated as follows:

In the cases where part of the project area which is not transferred is used for other business purposes, the common expenses shall also be distributed to such area and accounted for when declaring CIT on other business activities.

In the cases where an enterprise invests in infrastructure construction for multiple years and only record the infrastructure value after the all the works are complete, the enterprise may calculate the provisional expense of infrastructure on the land area transferred using the formula above and estimate accrued expense of infrastructure corresponding to the revenue recorded when calculating taxable income. After the construction is complete, the enterprise shall adjust the provisional cost of infrastructure and accrued expense according to the total value of infrastructure. If CIT is overpaid, the enterprise may deducted in CIT payable in the next period or claim a refund; If CIT is underpaid, the enterprise shall fully pay the arrears.

b.2) Deductible expenses of real estate transfer:

- Cost price of the land area transferred is:

+ the land levy or land rent payable to state budget if the State allocates land and collects land levy or land rent;

+ the price written on the contract and documentary evidence of payment when the LUR or land leasehold is transferred in case of LUR transferred by another organization or individual; the price imposed by the People’s Committee of the province at the time of transfer if the contract and documentary evidence of payment is not available.

+ the value of LUR or land leasehold according to the valuation record if land is contributed as capital.

+ the price for the construction work exchanged by an enterprise for land form the State, except for the cases specified by competent authorities.

+ the successful bid in case of auction of LUR or land leasehold;

+ the price imposed by the People’s Committee of the province according to the land price list compiled by the Government at the time of inheritance or donation if the enterprise’s land is inherited or donated.

If the enterprise’s land is inherited or donated before 1994, the cost price shall be imposed by the People’s Committee of the province in 1994 according to the land price list specified in the Government s Decree No. 87/CP dated August 17, 1994.

+ regarding land that is collateral or distressed property, the cost price shall be determined on a case-by-case basis.

- Cost of land compensation.

- Cost of crop loss compensation.

- Cost of compensation for land clearance and relocation and organization thereof as prescribed by law.

If documentary evidence for the cost of compensation for land clearance and relocation and organization thereof is not available, a statement may be prepared which specifies: names and addresses of recipients, compensation and aid amounts; signatures of recipients and certification of local governments in accordance with regulations of law on compensation for land clearance and relocation upon land withdrawal by the State.

- Fees and charges related to grant of LUR.

- Cost of soil improvement and leveling.

- Investment in construction of infrastructure such as roads, electricity supply, water supply and drainage, post and telecommunications, etc.

- Value of infrastructure and construction works on land.

- Other expenses related to the real estate transferred.

In the cases where an enterprise engages in more than one business lines, the expenses shall be separately accounted for. Otherwise, the common expense shall be distributed according to the ratio of revenue from real estate transfer to the enterprise’s total revenue.

The expenses paid by the State or other sources must not be aggregated with real estate transfer expense.

2. CIT on real estate transfer is 22% (20% from January 01, 2016).

3.18  Determination of CIT payable:

CIT on real estate transfer in the period equals (=) assessable income from real estate transfer multiplied by (x) 22%.

Income from real estate transfer must be declared separately and is not eligible for CIT incentives.

The CIT declaration and documentary evidence of payment of CIT from real estate transfer in the administrative division where the transferred real estate is located are the basis for preparing the annual CIT declaration at the enterprise’s headquarters”.

4. In the cases where a credit institution receives a piece of real property as collateral instead of loan repayment, it shall declare and pay CIT on real estate transfer if permitted to transfer such real estate. In the cases where real the estate put up for auction is collateral, the proceeds shall be used as repayment in accordance with the Government’s regulations on loan security applied to credit institutions and tax shall be paid as prescribed. The remaining amount after the repayment is made shall be returned to the organization that put up its real estate as collateral.

In the cases where a credit institution is permitted to transferred a piece of mortgaged real property to recover capital and the cost price of such real property is unknown, the cost price shall equal (=) the loan payable under the mortgage contract plus (+) loan interest accrued by the date of foreclosure of the real property under the credit contract plus (+) costs of real estate transfer supported by legitimate invoices and documentary evidence.

5. In the cases where the collateral is sold at auction by a judgment enforcement authority, the proceeds shall be dealt with in accordance with the Government’s Decree on foreclosure of LUR. The organization authorized to sell the real estate at auction shall declare and transfer the withheld CIT on real estate transfer to state budget. The documents must specify that CIT is paid on behalf of the taxpayer.

In the cases where the collateral transferred by a judgment enforcement authority and its cost price is unknown, the cost price shall equal (=) the debt payable under the court’s decision plus (+) costs of real estate transfer supported by legitimate documentary evidence.

Chapter VI

CORPORATE INCOME TAX INCENTIVES

Article 18. Conditions for applying CIT incentives

1. CIT incentives only apply to enterprises following accounting and invoicing regulations and pay CIT by declaration.

2. During the period of CIT incentives, an enterprise that engages in multiple business lines must separate incomes from the business lines eligible for CIT incentives (including preferential rates, tax exemption and reduction) and incomes from those that are not.

If such an enterprise fails to separate incomes from business lines eligible for CIT incentives and incomes from those that are not, the income from business lines eligible for CIT incentives equals (=) total taxable income multiplied by (x) the ratio (%) of revenue or deductible expense of the eligible business lines to total revenue or total deductible expense of the enterprise in the tax period.

In the cases where the deductible expense or revenue cannot be separated, it shall be determined according to the ratio of revenue or deductible expense of the eligible business lines to the total revenue or deductible expense of the enterprise.

3.19CIT incentives and 20% CIT do not apply to the following incomes (including those of enterprises eligible for 20% CIT prescribed in Clause 2 Article 11 of Circular No. 78/2014/TT-BTC):

a) Incomes from transfer of stakes or right to contribute capital; incomes from real estate transfer (except for incomes from investment in social housing prescribed in Point d Clause 3 Article 19 of Circular No. 78/2014/TT-BTC); Incomes from transfer of investment project or the right to participate in investment project, transfer of the right to mineral exploration and extraction; incomes from overseas business operation.

b) Incomes from exploration and extraction of petroleum, other rare and valuable resources, and income from mineral extraction.

c) Incomes from provision of services subject to special excise tax prescribed by the Law on Special excise tax.

4.20Incentives for enterprises whose investment project is eligible CIT incentives because its field or location is eligible for investment incentives (hereinafter respectively referred to as “eligible field” and “eligible area”) are determined as follows:

a) In case of an enterprise whose investment project is eligible for CIT incentives because its field is eligible, the incomes from such field, incomes from liquidation of refuses and scrap of products in such field, exchange differences directly related revenues and expenses of such field, demand deposit interest, and other directly related incomes are also eligible for CIT incentives.

b) In case of an enterprise whose investment project is eligible for CIT incentives because it is located in an eligible area (including industrial parks, economic zones, hi-tech zones), incomes eligible for CIT incentives are those derived from business activities within such area, except for the incomes mentioned in Points a, b, c Clause 1 of this Article.

- In the cases where an enterprise whose transport project is eligible for CIT incentives because it is located in an eligible area (including industrial parks, economic zones, hi-tech zones), its incomes from transport services based in the eligible area will be eligible for CIT incentives, whether the departure or destination is located in the same area as the project.

Example 15a: In 2015, a new enterprise is established in Son La province, which is an extremely disadvantaged province, to provide transport services. Thus, the enterprise is eligible for CIT incentives applied to extremely disadvantaged areas.

In 2015, it has several fixed routes (from Son La to Hanoi and vice versa; from Son La to Ha Long city and vice versa) and contractual routes (from Son La to Da Nang city and vice versa; from Hanoi to Da Nang city and vice versa; from Bac Ninh city to Son La).

CIT incentives for incomes from transport services are determined according to the area in which the project is established (Son La province), whether the departure or destination is located in such area. To be specific:

+ Incomes from the following routes are eligible for CIT incentives: fixed routes from Son La to Hanoi and vice versa, from Son La to Ha Long city and vice versa; contractual routes from Son La to Da Nang city and vice versa, from Bac Ninh city to Son La.

+ Income from the route from Hanoi to Da Nang city is not eligible for CIT incentives because both the departure place and destination are not located in Son La province.

- If an enterprise whose investment project is eligible for CIT incentives because it is located in an eligible area earns incomes outside the area in which the project is located:

 (i) If the area in which the income is earned is not an eligible area, it will not be eligible for CIT incentives.

 (i) If the area in which the income is earned is an eligible area, it will be eligible for CIT incentives. CIT incentives for such income shall be determined according to the time and level of incentives in the area.

* Example 15b: CIT incentives in eligible areas (applied to manufacturing):

In 2012, an enterprise has a new manufacturing project in Ha Giang province, which is an extremely disadvantaged area. Thus, the enterprise is eligible for CIT incentives applied to extremely disadvantaged areas.

In 2015, the enterprise starts manufacturing products in Ha Giang province and sells them in Ha Giang province and adjacent provinces such as Cao Bang province (an extremely disadvantaged area), Lao Cai city (a disadvantaged area) and Hanoi (not eligible for incentives). Because all products are manufactured in Ha Giang province, the incomes from sale of products in Ha Giang province and other provinces are eligible for CIT incentives.

* Example 15c: CIT incentives in eligible areas (applied to construction):

In 2015, a new construction enterprise is established in Ha Giang province, which is an extremely disadvantaged area. Thus, the enterprise is eligible for CIT incentives applied to extremely disadvantaged areas.

In 2015, the enterprise engages in some construction activities in Ha Giang province and adjacent provinces including Cao Bang (an extremely disadvantaged area), Lao Cai city (a disadvantaged area) and Hanoi (not eligible for incentives). The incomes from construction activities in Ha Giang province are eligible for CIT incentives. CIT incentives for incomes from construction activities in adjacent areas are determined as follows:

+ Incomes earned in Cao Bang province are eligible for CIT incentives for the remaining incentive period of the enterprise.

+ Incomes earned in Lao Cai city are eligible CIT incentives applied to disadvantaged areas for the remaining incentive period of the enterprise.

+ Incomes earned in Hanoi are not eligible CIT incentives.

* Example 15d: CIT incentives in eligible provinces (applied to service provision):

In 2015, a new enterprise is established in Ha Giang province, which is an extremely disadvantaged area, to provide services Thus, the enterprise is eligible for CIT incentives applied to extremely disadvantaged areas.

In 2015, the enterprise provides services in Ha Giang province and adjacent provinces including Cao Bang (an extremely disadvantaged area), Lao Cai city (a disadvantaged area), and Hanoi (not given incentives). The incomes from services provided in Ha Giang province are given CIT incentives. CIT incentives for incomes from services provided in adjacent areas are determined as follows:

+ Incomes earned in Cao Bang province are eligible for CIT incentives for the remaining incentive period of the enterprise.

+ Incomes earned in Lao Cai city are eligible CIT incentives applied to disadvantaged areas for the remaining incentive period of the enterprise.

+ Incomes earned in Hanoi are not eligible for CIT incentives.

c) Enterprises eligible for 20% CIT may apply the CIT rate of 20% to their incomes except for those mentioned in Points a, b, c Clause 1 of this Article.

5.21With regard to new project of investments:

a) New investment projects that are eligible for CIT incentives prescribed in Article 15 and Article 16 of Decree No. 218/2013/ND-CP include:

- Projects that are granted first investment certificates from January 01, 2014 and earn revenues after the grant of certificates of investment.

- Any domestic project of investment that is associated with establishment of a new enterprise whose capital is below VND 15 billion, not on the list of conditional investment fields and granted the Certificate of Enterprise registration from January 01, 2014.

- Any project of investment that is independent from the project of an operating enterprise (including those whose capital is below VND 15 billion and not on the list of conditional investment fields) and granted the Certificate of Enterprise registration from January 01, 2014 to execute such independent project.

- Private notary offices established in disadvantaged areas and extremely disadvantaged areas.

New investment projects must be granted investment licenses or certificates of investment as prescribed by regulations of law on investment in order to be eligible for CIT incentives.

b) New investment projects eligible for CIT incentives applied to new investments do not include:

- Investment projects derived from division, acquisition, amalgamation, conversion of enterprises as prescribed by law;

- Investment projects derived from change of owners (including new investment projects that inherit assets, business premises, or business lines of the old enterprises to continue business operation; acquisition of an operating project).

Enterprises that establish or have investment projects derived from enterprise conversion, change of owner, division, acquisition, consolidation may inherit CIT incentives of the enterprises or projects of investment before the conversion, division, acquisition, consolidation for the remaining incentive period if all conditions for CIT incentives are satisfied.

c) CIT incentives given to new enterprises derived from investment projects only apply to incomes from business operations that satisfy incentive conditions written on the enterprise’s Certificate of Enterprise registration or First Investment Certificate. If the Certificate of Enterprise Registration or Certificate of Investment of an operating enterprise is changed, the enterprise will be eligible tax incentives for the remaining period or incentives for investment in expansion if all conditions for incentives are still fulfilled.

d) With regard to investment projects  granted the investment licenses, if the invested capital, investment phases, investment schedule have been registered with the licensing authority, if the next phases are considered sub-projects of the licensed projects because they are executed on schedule (except for force majeure events, objective difficulties due to land clearance, administrative procedures of regulatory bodies, natural disasters, conflagration, or other force majeure events), then the sub-projects of the project granted the First investment certificate will be eligible for tax incentives for the remaining incentive period from the day on which they earn revenues that are eligible for incentives.

Regarding an investment project licensed before January 01, 2014 that is divided into multiple investment phases as stated above, its sub-projects are eligible for tax incentives applied to first investment projects for the remaining incentive period from January 01, 2014.

Regarding incomes earned by sub-projects of a first investment project before January 01, 2014 and have been given CIT incentives according to legislative documents before January 01, 2014, the tax incentives before January 01, 2014 shall not be adjusted.

While executing sub-projects, if the investor is permitted by an investment authority (according to the Law on Investment No. 59/2005/QH11 dated November 29, 2015 and its guiding documents) to extend the time limit for project execution and the enterprise complies with the extended time limit, such enterprise is also given tax incentives as prescribed above.

dd) Regarding a private enterprises derived from enterprise conversion that invests in the public sector and satisfies conditions for private sector involvement according to the Prime Minister’s Decisions, if the enterprise was not eligible for CIT incentives applied to eligible fields, it will be eligible for CIT incentives from the conversion date as if it was a new investment project.

If an enterprise satisfies criteria for private sector involvement according to the Prime Minister’s Decisions after its conversion and is applying 10% CIT to incomes from investment in the public sector, it may keep applying this preferential rate.

6. Incentives for investment in expansion

a)22If one of the three conditions prescribed at this Point is satisfied, the enterprise having a project of investment in another operating project such as expansion of production scale, increase of capacity and innovation of production technology (hereinafter referred to as “expansion”) in an eligible field or eligible area according to Decree No. 218/2013/ND-CP (including economic zones, hi-tech zones, industrial parks other than those located in urban districts of special-grade cities, centrally run grade-I cities and grade-I provincial cities) may decide whether to apply CIT incentives to its operating project for the remaining period (including preferential rates, exemption, and reduction, if any) or apply tax exemption or reduction to the increase in incomes from expansion (no preferential tax rates) for a period of time equal to the tax exemption or reduction period applied to new investment projects in the same eligible area or eligible field. If the enterprise chooses to apply CIT incentives to its operating project for the remaining period, the expansion must be in the field or area eligible for CIT incentives under Decree No. 218/2013/ND-CP and in the same field or area as the operating project.

The expansion specified in this Point must satisfy one of the following criteria:

- The increase in cost of fixed assets when the project is finished and put into operation is at least VND 20 billion (if the expansion is of an eligible field according to Decree No. 218/2013/ND-CP) or VND 10 billion (if the expansion is located in a disadvantaged area or extremely disadvantaged area according to Decree No. 218/2013/ND-CP).

- Ratio of increase in cost of fixed assets to total cost of fixed assets before investment is at least 20%.

- Designed capacity after expansion increases by at least 20% compared to the designed capacity mentioned in the technical and economic feasibility study done before initial investment.

If the enterprise chooses incentives applied to expansion, the increase in income from expansion must be accounted for separately. If the enterprise is not able to separate the increase in income from expansion, it shall be determined according to the ratio of cost of new fixed assets to total cost of fixed assets of the enterprise.

The duration of tax exemption or reduction mentioned in this Clause begins from the year in which the expansion project is finished, put into operation and generates incomes. If taxable income is not earned within the first 03 years from the first year in which the expansion project generates revenues, the duration of tax exemption or reduction will begin from the fourth year in which revenue is generated by the project of investment.

In the cases where an operating enterprise invests in upgrade, replacement, innovation of technology of an operating project in a field or area eligible for tax incentives according to Decree No. 218/2013/ND-CP without satisfying any of the criteria mentioned in this Point, tax incentives shall apply to the project for the remaining period (if any).

If the enterprise has an investment project eligible for tax incentives and during the period 2009 – 2013 regularly makes investment in additional machinery and equipment that is not part of the aforesaid expansion project, the increase in income from investment in additional machinery and equipment is also eligible for tax incentives at the level applied to the project for the remaining period from the tax year 2014.

Tax incentives mentioned in this Clause do not apply in the cases of expansion due to division, merger, change of owners (including the cases in which assets, business premises, business lines of the old enterprise are inherited to continue the business operation), acquisition of operating projects or enterprises.

The enterprise having an investment project derived from change of owners, division, acquisition, or consolidation of enterprises may inherit CIT incentives given to the old enterprise or project before such event for the remaining period if conditions for CIT incentives are still fulfilled.

b) When an operating enterprise eligible for tax incentives invests in expansion that is not in a field or area eligible for tax incentives specified in Decree No. 218/2013/ND-CP, it will not be eligible for CIT incentives for the additional income from the expansion.

If the enterprise fails to separate the additional income from expansion in the tax period, which is not eligible for CIT incentives shall not, the enterprise may calculate it using any of the following formulae:

Option 1:

The total cost of fixed assets used for business operation in reality consists of: value of new fixed assets purchased for expansion that have been put into operation and costs of existing fixed assets according to the annual balance sheet.

Option 2:

The total investment in business operation means the total of the owner’s capital and loan capital according to the annual balance sheet.

The enterprise may apply one of the two methods above to calculate additional income from an expansion activity.

Example 16: Company A is a plastic producer in an industrial park in Ho Chi Minh City, which is not eligible for incentives, and is eligible for the following CIT incentives: 15% CIT for 12 years from the year in which revenue is earned, 3-year exemption from CIT from the year in which taxable income is earned, 50% CIT reduction for the next 7 years. In 2014, Company A invests VND 5 billion in purchasing new machinery and equipment. Company A s total value of fixed assets in 2014 is VND 20 billion, total assessable income in 2014 is VND 1.2 billion, including VND 200 million ineligible for incentives.

Additional income from expansion that is ineligible for incentive is calculated as follows:

The assessable income ineligible for CIT incentives in 2014: VND 200 million + VND 250 million = VND 450 million

The assessable income eligible for CIT incentives in 2014:

VND 1,200 million – VND 450 million = VND 750 million

7.In a tax period, if an income is eligible for various preferential CIT rates and periods of CIT exemption or reduction, the enterprise may choose the most favorable one.

8. In the cases where an enterprise fails to satisfy any of the conditions for CIT incentives specified in Clause 7, 8 and 12 Article 1 of the Law on amendments to The Law on Corporate income tax and Article 19 of Decree No. 218/2013/ND-CP during the CIT incentive period, it will not be eligible for incentives in the year and has to pay CIT at the common rate and that year will be deducted from the CIT incentive duration.

8a.23In the first tax period, if the enterprise’s investment project (including new projects, expansion projects, high-tech enterprises, agriculture enterprises applying high technologies) is given a tax incentive period shorter than 12 months, the enterprise may choose to apply tax incentives to its projects from that first tax period or register the beginning date of tax incentive period to the tax authority from the next tax period. If the enterprise registers to apply tax incentives from the next tax period, tax payable in the first tax period must be paid as prescribed.

9. In a tax period, if an enterprise makes a loss on the activities eligible for CIT incentives and earn incomes from activities ineligible for CIT incentives (excluding incomes from real estate transfer, project transfer; incomes from transfer of the right to participate in project, transfer of the right to exploration and extraction of minerals) or vice versa, the enterprise may offset the loss against taxable income from any activity. The remaining income after offsetting shall apply the CIT rate applied to the income-generating activity.

If the enterprise made a loss in previous tax periods, the loss must be carried forward. If the enterprise fails to separate loss on each activity, it shall offset the loss against incomes from the activities eligible for CIT incentives. The remaining loss (if any) shall be offset against incomes from the activities ineligible for CIT incentives (excluding incomes from real estate transfer, project transfer; incomes from transfer of the right to participate in project, transfer of the right to exploration and extraction of minerals).

Example 17: In the tax period of 2014, Enterprise A:

- makes a loss of VND 1 billion on software production, which is eligible for CIT incentives.

- makes a profit of VND 1 billion from computer trading, which is ineligible for CIT incentives.

- makes a profit of VND 2 billion from securities transfer (other incomes).

In this case, Enterprise A may offset the loss on software production and profit from computer trading or profit from securities transfer and CIT shall be paid on the remaining income at CIT rate applied to the income-generating activity.

To be specific: The loss of VND 1 billion on software production will be offset against the profit of VND 1 billion from computer trading or profit from securities transfer.

The remaining income of VND 2 billion will apply 22% CIT.

Example 18: In the tax period of 2014, Enterprise B:

- makes a profit of VND 2 billion from software production, which is eligible for 10% CIT.

- makes a profit of VND 2 billion from computer trading, which is ineligible for CIT incentives.

- makes a loss of VND 1 billion on securities trading (other incomes).

In the tax period 2013, Enterprise B made a loss of VND 1 billion on computer trading. Enterprise B shall carryforward the loss to 2014 as follows:

- Offsetting loss and profit in 2014: The loss on securities trading will be offset against income from computer trading. The remaining profit from computer trading: VND 2 billion – VND 1 billion = VND 1 billion.

- The loss on computer trading in 2013 will be carried forward and offset against profit from computer trading in 2014: VND 1 billion – VND 1 billion = 0.

CIT payable:

VND 2 billion x 10% = VND 0.2 billion

Example 19: In the tax period of 2014, Enterprise C:

- makes a profit of VND 2 billion from software production, which is eligible for 10% CIT.

- makes a profit of VND 2 billion from computer trade, which is ineligible for CIT incentives.

- makes a loss of VND 1 billion on securities trading (other incomes).

In the tax period 2013, Enterprise C made a loss of VND 2 billion but failed to identify it. It has to first offset the loss against income from an activity eligible for CIT incentives (software production).

Offsetting loss and profit in 2014: The loss on securities trading will be offset against the profit from computer trading. The remaining profit from computer trading: VND 2 billion – VND 1 billion = VND 1 billion.

- The loss made in 2013 will be carried forward and offset against the profit from software production: VND 2 billion – VND 2 billion = 0 billion.

22% CIT will be applied to profit from the activity ineligible for CIT incentives: VND 1 billion x 22% = VND 0.22 billion

10. In the cases where during the CIT incentive period, an inspecting authority finds that:

- The amount of CIT eligible for incentives is higher than the amount declared by the enterprise (even if the enterprise has not applied for incentives), CIT incentives will be applied to the amount determined by the inspecting authority.

- The amount of CIT eligible for incentives is smaller than the amount declared by the enterprise, CIT incentives will be applied to the amount determined by the inspecting authority.

- Penalties shall be applied by the inspecting authority depending on the seriousness of the enterprise’s offence.

Article 19. Preferential CIT rates

1.2410% CIT for 15 years shall be applied to:

a) Incomes of the enterprise from execution of new investment projects in extremely disadvantaged areas according to the Appendix of Decree No. 218/2013/ND-CP, economic zones, hi-tech zones, including concentrated IT zones established under the Prime Minister’s Decisions.

b) Incomes of the enterprise from execution of new investment projects  in: scientific research and technology development; application of high technologies given priority according to the Law on High Technology; cultivation of high technology, cultivation of high-tech enterprises; venture capital investment in development of high technologies on the list of high technologies given priority; investment in construction, operation of facilities for cultivation of high technologies, cultivation of high-tech enterprises; investment in development of water plants, power plants, water supply and drainage system; bridges, roads, railroads, airports, seaports, air terminals, train stations, and other particularly important infrastructural works decided by the Prime Minister; software production; manufacture of composite materials, light building materials, rare and valuable materials; production of renewable energy, clean energy, waste-to-energy process, development of biotechnology.

Projects of investment in development of water plants, power plants, water supply and drainage system; bridges, roads, railroads, airports, seaports, air terminals, train stations must generate revenues or incomes from their operation in order to be eligible for tax incentives. Income from construction of such works of the construction enterprise is not eligible for the aforesaid tax incentives.

c) Incomes of enterprises from execution of new projects of investment in environmental protection, including: manufacture of environmental pollution reduction devices, environment monitoring and analysis devices; pollution reduction and environmental protection; collection, treatment of wastewater, exhaust, solid wastes; recycling or wastes.

d) High-tech enterprises, agriculture enterprises applying high technologies as prescribed by the Law on High Technologies.

High-tech enterprises, agriculture enterprises applying high technologies as prescribed by the Law on High Technologies are given preferential tax rates from the year in which they are granted the Certificates of High-tech Enterprise or Certificate of Agriculture Enterprise Applying High Technologies.

Incomes from high-tech activities, application of high technologies, and incomes directly related to high-tech activities, application of high technologies of high-tech enterprises, agriculture enterprises applying high technologies are eligible for CIT incentives applied to eligible fields prescribed in Clause 4 Article 18 of Circular No. 78/2014/TT-BTC (amended in Point a Clause 2 Article 10 of this Circular).

In the cases where an enterprise that is eligible for CIT incentives or no longer eligible for CIT incentives is granted the Certificate of High-tech Enterprise or Certificate of Agriculture Enterprise applying High Technologies, the incentives to which the enterprise is entitled are equal to that applied to high-tech enterprises and agriculture enterprises applying high technologies prescribed in Clause 1 Article 15 and Clause 1 Article 16 of Decree No. 218/2013/ND-CP minus (-) the period over which the enterprise was eligible for CIT incentives (including preferential tax rates and duration of tax exemption or reduction, if any).

dd) Incomes of an enterprise from execution of new manufacturing projects (except for manufacturing of products subject to special excise tax and mineral extraction projects) that satisfy any of the following criteria:

- The project’s initial capital is at least VND 6,000 billion disbursed within 03 years from the date of investment license according to regulations of law on investment, and the total revenue is at least VND 10,000 billion per year after not more than 3 years from the first year in which revenues are generated by the project (the enterprise must have a total revenue of at least VND 10,000 billion per year by the 4^thyear from the first year in which revenue is generated).

- The project’s initial capital is at least VND 6,000 billion disbursed within 03 years from the date of investment license according to regulations of law on investment, and the project regularly has over 3,000 employees within 3 years from the first year in which revenue is generated by the project (the enterprise’s annual average number of employees is at least 3,000 by the 4^thyear from the first year in which revenue is generated).

The average number of regular employees shall be determined according to the instructions in the Circular No. 40/2009/TT-BLĐTBXH of the Ministry of Labor, War Invalids and Social Affairs dated December 03, 2009.

If the investment project fails to satisfy any of the criteria mentioned above (unless it is fallen behind schedule because of objective difficulties during land clearance, administrative procedures, because of natural disaster, hostilities, conflagration and is accepted by the licensing authority and approved by the Prime Minister), the enterprise will not be eligible for CIT incentives and have to declare and pay CIT that was declared eligible for incentives in the previous years (if any), pay late payment interest. Nevertheless, the enterprise will not incur any penalties for incorrect declaration as prescribed by regulations of law on tax administration.

e) Incomes of an enterprise from execution of a manufacturing projects (except for manufacturing of products subject to special excise tax and mineral extraction projects) in which investment is at least VND 12,000 billion, using high technologies that must be appraised in accordance with the Law on High Technologies, the Law on Science and Technology, and capital is disbursed within 05 years from the date of investment licensing.

g) Incomes of an enterprise for execution of a new project for manufacture of products on the list of ancillary products given priority that satisfy any of the following criteria:

- Ancillary products are meant to support high technologies according to regulations of the Law on High Technologies;

- Ancillary products are meant to support manufacturing of: textile and garment; leather and footwear; electronics and IT products; manufacturing of cars; fabricating mechanics that, by January 01, 2015, they cannot be manufactured in Vietnam or can be manufactured in Vietnam and satisfy technical standards of EU or equivalent standards.

The list of ancillary products given priority and CIT incentives is promulgated together with the Prime Minister’s Decision No. 1483/QD-TTg dated August 26, 2011. In case legislative documents related to the list of ancillary products given priority are amended, the new documents shall apply.

2.25Cases in which period of preferential tax rates may be extended:

a) The investment projects specified in Point b and Point c Clause 1 of this Article with large scale and high/new technologies that need investment.

b) The projects specified in Point e Clause 1 of this Article that satisfy any of the following criteria:

- The products manufactured are capable of global competition; the revenue exceeds VND 20,000 billion per year after not more than 05 years from the first year in which revenue is generated by the project;

- Over 6,000 employees are hired;

- The project involves economic-technical infrastructure, including: investment in development of water plants, power plants, water supply and drainage system; bridges, roads, railroads, airports, seaports, air terminals, train stations, new energy, clean energy, energy-saving industry, oil refinery.

c) At the request of the Minister of Finance, the Prime Minister shall decide extension of preferential tax rate duration prescribed in this Clause. Nevertheless, the extension shall not exceed 15 years.

3. 10% CIT over the entire operating period is applied to:

a)26Incomes of enterprises making investment in the public sector fields such as education – training, vocational training, healthcare, culture, sports, environment, and judicial expertise.

The list of types, criteria for scale, standards of enterprises making investment in the public sector is compiled by the Prime Minister.

b) Incomes of publishers from publishing defined by the Law on Publishing.

Publishing activities include publishing, printing and releasing publications as defined in the Law on Publishing.

Publications are specified in Article 4 of the Law on Publishing and Article 2 of the Government s Decree No. 111/2005/ND-CP. Where the Law on Publishing, Decree No. 111/2005/ND-CP or relevant legislative documents are amended, the newer ones shall apply.

c) Incomes from newspapers (including advertisements on newspapers) from press agencies defined by the Law on Journalism.

d) An enterprise’s income from execution of a social housing project for sale, lease or lease purchase to the entities specified in Article 53 of the Law on Housing.

Social house means houses invested in by the State or other entities in various economic sectors that satisfy criterion on housing, pricing, eligible buyers, tenants and buyers/tenants prescribed by housing laws. The determination of income eligible for 10% CIT specified in this Point does not depend on the time of sale/lease/lease purchase contract conclusion.

In the cases where an enterprise making investment in social house signs a sale contract and collects advance payment from the buyer before January 01, 2014 and collects the remaining amount afterwards (CIT has been paid) and the house is delivered not earlier than January 01, 2014, the income from such sale will be eligible for 10% CIT.

The income from social house eligible for 10% CIT specified in this Clause is the income from sale, lease or lease purchase that occurs not earlier than January 01, 2014. In the cases where an enterprise fails to determine such income, 10% CIT shall be applied according to the ratio of revenue from sale, lease or lease purchase of social house to the total revenue of the enterprise over the same period of time.

e)27Incomes of an enterprise from planting, cultivating, protecting forests; farming, husbandry, aquaculture in disadvantaged areas; forestry in disadvantaged areas; production, propagation and cross-breeding of plant varieties, animal breeds; production, extraction, and refining of salt except for salt production prescribed in Clause 1 Article 4 of Decree 218/2013/ND-CP; investment in post-harvest preservation of agriculture products; preservation of agriculture products, aquaculture products, and foods, including direct investment in preservation and lease of preservation equipment.

f) Incomes of a cooperative from agriculture, forestry, aquaculture or salt production in an area that is not a disadvantaged area or extremely disadvantaged area.

3a.2815% CIT shall be applied to incomes of enterprises from farming, husbandry, processing of agriculture and aquaculture products in areas other than disadvantaged areas and extremely disadvantaged areas.

4. 20% CIT for 15 years shall be applied to:

a) Incomes of an enterprise from execution of a new investment project in an disadvantaged area specified in the Appendix of Decree No. 218/2013/ND-CP.

b) Incomes of an enterprise from execution of a new project for production of: high-class steel, energy-saving products, machinery and equipment serving agriculture, forestry, aquaculture or salt production; irrigation equipment; feeds for livestock and poultry; development of traditional trades (including handicrafts, farm produce processing and art products).

Such an enterprise specified in this Clause may apply 17% CIT from January 01, 2016.

5. 20% CIT over the entire operating period (17% from January 01, 2016) shall be applied to people s credit funds, cooperative banks and microfinance institutions.

A people s credit fund, cooperative bank or microfinance institution in a disadvantaged area specified in the Appendix of Decree No. 218/2013/ND-CP shall apply 20% CIT after the 10% CIT period expires as prescribed in Point a Clause 1 of this Article and apply 17% CIT from January 01, 2016.

Microfinance institutions must be established and operating within the Law on credit institutions.

6. The preferential tax rates specified in this Article shall apply from first year in which the enterprise earns revenue from the new investment project eligible for CIT incentives. Regarding high-tech enterprises and agriculture enterprises applying high technologies, it shall be applied from the year in which they are granted the Certificate of High-tech Enterprise or Certificate of Agriculture Enterprise Applying High Technologies.

Article 20. Duration of tax exemption and reduction

1. Tax exemption for 4 years and 50% tax reduction for the next 9 years shall be applied to:

a)29Incomes of enterprises from execution of the investment projects specified in Clause 1 Article 19 of Circular No. 78/2014/TT-BTC (amended in Clause 1 Article 11 of this Circular).

b) Incomes of enterprises from execution of new public sector-related projects in an disadvantaged area or extremely disadvantaged area specified in the Appendix of Decree No. 218/2013/ND-CP.

2. Tax exemption for 4 years and 50% tax reduction for the next 5 years shall be applied to incomes of enterprises from execution of new public sector-related projects in areas other than disadvantaged areas and extremely disadvantaged areas specified in the Appendix of Decree No. 218/2013/ND-CP.

3. 3.30Tax exemption for 2 years and 50% tax reduction for the next 4 years shall be applied to incomes from execution of new investment projects specified in Clause 4 Article 19 of Decree No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance and income of the business from execution of new investment projects in industrial parks (except for those located in advantaged areas).

The advantaged areas mentioned in this Clause are urban districts of special class cities or the class I cities affiliated to the central and the class I cities affiliated to provinces, not including urban districts of the aforesaid cities converted from districts from January 1, 2009; where an industrial park is located in both advantaged and disadvantaged areas, the determination of tax incentive for such industrial park depends on the actual location of the investment project.

The determination of special class cities and or class I cities prescribed in this Clause is specified in the Government’s Decree No. 42/2009/ND-CP dated May 7, 2009 on classification of cities and its amendments (if any).

4.31The tax exemption/reduction period mentioned in this Article begins from the first year in which the enterprise earns taxable income from the new investment project which is eligible for CIT incentives. In the cases where the enterprise does not earn taxable income in the first 03 years, the tax exemption/reduction period will begin in the 4^thyear from the first year in which revenue is generated by the new project.

Example 20: In 2014, Enterprise A has a new software production project. If Enterprise A earns taxable income from the project in 2014, the continuous period of tax exemption/reduction will begin in 2014. If the project generates revenue from 2014 but still does not generate taxable income in 2016, the continuous period of tax exemption/reduction will begin in 2017.

The period of tax exemption/reduction applied to high-tech enterprises, agriculture enterprises applying high technologies begins from the year in which they are granted the Certificate of High-tech Enterprise or Certificate of Agriculture Enterprise Applying High Technologies.

5.32(abolished)

Article 21. Other cases of CIT reduction

1. A manufacturing, construction or transport enterprise that employs 10 – 100 female workers that make up more than 50% of 150 regular workers or employ more than 100 regular female workers that make up more than 30% of the enterprise’s regular workers, the enterprise is eligible for CIT reduction which is proportional to the expenditure on the female workers according to instructions in Point 2.9.a Clause 2 Article 6 of this Circular if such expenditure can be separately accounted for.

Public service agencies, offices of general companies that do not directly do business are not eligible for CIT reduction specified in this Clause.

2. An enterprise that employs ethnic workers is eligible for CIT reduction which is proportional to the expenditure on the ethnic workers according to instructions in Point 2.9.b Clause 2 Article 6 of this Circular if such expenditure can be separately accounted for.

3. Income from transfer of technology in an eligible field to an organization or individual located in a disadvantaged area is eligible for 50% reduction in CIT thereon.

Article 22. Procedures for applying CIT incentives

Each enterprise shall determine its eligibility for CIT incentives and declare the preferential tax rate, the tax exemption or reduction duration and the amount of loss deductible from assessable income itself.

In an inspection, the tax authority shall verify the enterprise’s eligibility for CIT incentives, the amount of CIT eligible for exemption or reduction and the amount of loss deductible from taxable income. If the enterprise is not eligible for preferential tax rates or tax exemption/reduction, it shall pay tax arrears and face penalties for tax offences.

Chapter VII

IMPLEMENTATION33

Article 23. Effect

1. This Circular takes effect on August 02, 2014 and applies to the tax period of 2014 onwards.

2. An enterprise whose investment project is eligible for CIT incentives (whether applied or not) by the end of the tax period 2013 according to legislative documents on CIT shall be eligible for the remaining period specified in such documents; In the cases where the conditions specified in Decree No. 218/2013/ND-CP are satisfied, the enterprise may choose between keeping on applying the old incentives or applying those specified in Decree No. 218/2013/ND-CP (including preferential tax rates, tax exemption or reduction) for the remaining period if it is eligible for CIT incentives applied to enterprises derived from new investment projects or expansion projects. The expansion projects that may choose between the incentives specified in this Clause are those executed by December 31, 2008 and was put into operation in 2009 and earlier.

The remaining incentive period will be a continuous period which begins from the effective date of the regulations on tax incentives in the legislative documents on foreign investment in Vietnam, domestic investment promotions and CIT that were promulgated before the effective date of this Circular.

The remaining incentive period equals (=) the number of years over which the enterprise is still eligible for tax incentives (preferential tax rates, tax exemption or reduction) specified in the Circular minus (-) the number of years it has been applying tax incentives prescribed in the previous legislative documents on CITs. Rules for determination of remaining incentive period:

- At the end of the tax period 2013, if the preferential tax rate period has expired according to a previous legislative document on CIT, the enterprise must not apply tax incentives (preferential tax rates, tax exemption or reduction) for the remaining period specified in this Circular.

- At the end of the tax period, 2013, if the enterprise is still eligible for tax incentives (preferential tax rates, tax exemption or reduction) by according to a previous legislative document on CIT, the enterprise must not apply tax incentives (preferential tax rates, tax exemption or reduction) for the remaining period specified in this Circular.

- At the end of the tax period 2013, if the tax exemption period has expired but the enterprise is still eligible for preferential tax rates according to a previous legislative document on CIT, tax exemption will not apply but the enterprise will be eligible for tax reduction and preferential tax rates specified in this Circular for the remaining incentive period.

- At the end of the tax period 2013, if the enterprise is still eligible for preferential tax rates and the tax reduction period has not expired according to a previous legislative document on CIT, the remaining tax reduction period will equal (=) the tax reduction period (years) specified in this Circular minus (-) the period (years) over which the enterprise applied tax reduction by the end of the tax period 2013 and the enterprise may preferential tax rates for such remaining period.

- At the end of the tax period 2013, if the preferential tax exemption or reduction period has expired according to a previous legislative document on CIT, the enterprise will no longer be given tax incentives (preferential tax rates, tax exemption or reduction) specified in this Circular.

2a.34Enterprises that have expansion projects licensed by competent authorities, have made investment during 2009 – 2013 and satisfy conditions for tax incentives in the tax period 2014 (in eligible fields or eligible areas, including industrial parks, economic zones, hi-tech zones) according to the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents shall be given tax incentives applied to expansion investment according to the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents for the remaining period from the tax period 2015.

With regard to enterprises that have production expansion projects that are still incomplete by December 31, 2008, still under construction in 2009, finished and put into operation in 2010 or later, if they satisfy conditions for tax incentives (in eligible fields or eligible areas, including industrial parks, economic zones, hi-tech zones) according to regulations at the time expansion investment is decided, they may choose between incentives for increase in income from expansion investment according to legislative documents applicable at the time expansion investment is decided, or according to regulations of the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents for the remaining period from the tax period 2015.

2b.35Enterprises that have projects of investment in industrial parks during 2009 – 2013 and satisfy conditions for tax incentives in the tax period 2014 (in eligible fields or eligible areas) according to the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents shall be given tax incentives according to the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents for the remaining period from the tax period 2015.

2c.36Enterprises that have projects of investment in areas that are not eligible for tax incentives before January 01, 2015 (including industrial parks, economic zones, hi-tech zones) and made eligible for tax incentives from January 01, 2015 onwards according to the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents shall be given tax incentives according to the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents for the remaining period from the tax period 2015.

In the cases where an enterprise that has a project of investment in an area given tax incentives but receives lower incentives, if its satisfies conditions for higher tax incentives according to the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents, it will be given tax incentives according to the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents for the remaining period from the tax period 2015.

2d.37After January 01, 2015, if the area where an enterprise’s project is located is made eligible for tax incentives, it will be eligible for tax incentives for the remaining period which begins from the tax period in which such change is made.

2dd.38In the cases mentioned in Clauses 2a, 2b, 2c of this Article, if revenue is yet to be generated by the project in the tax period 2015, the continuous period of application of preferential tax rate will begins in the first year in which revenue is generated by the project given tax incentives. In the cases mentioned in Clauses 2a, 2b, 2c of this Article, if income is yet to be generated by the project, the continuous period of tax exemption/reduction will begins in the first year in which taxable income is generated by the project given tax incentives (if the enterprise does not have taxable income in the first 03 years, the period of tax exemption/reduction will begin from the 4^thyear from the first year in which revenue is generated by the project).

3.39With regard to a new enterprise derived from a project of investment that is granted the investment license or certificate of investment before January 01, 2014 but still incomplete, yet to be put into operation and thus has not generated revenues, the enterprise will be given CIT incentives applied to new investment projects according to the Law No. 32/2013/QH13, the Law No. 71/2014/QH13 and their guiding documents.

With regard to an enterprise that executes its expansion project before January 01, 2014, put it into operation and earn revenues from January 01, 2014, if the field or area such expansion project is eligible for CIT incentives according to Decree No. 218/2013/ND-CP (including economic zones, hi-tech zones, industrial parks other than those located in urban districts of special-grade cities, centrally run grade-I cities and grade-I provincial cities), the enterprise will be given CIT incentives for the increase in income due to expansion as instructed in Circular No. 78/2014/TT-BTC.

4. This Circular supersedes Circular No. 123/2012/TT-BTC dated July 27, 2012 of the Ministry of Finance.

5. Regulations on CIT promulgated by the Ministry of Finance and other agencies that contravene this Circular are abolished.

6. Unresolved issues about CIT, annual CIT declarations, CIT exemption, tax reduction, and imposition of penalties for tax offences that arise before the tax period 2014 shall be dealt with in accordance with CIT provisions promulgated therebefore.

7. In the cases where Socialist Republic of Vietnam enters into an international treaty or agreement in which CIT provisions contravene those in this Circular, such international treaty or agreement shall prevail.

8.40If the period of tax incentives is still unexpired due to the export ratio but the enterprise is no longer eligible for tax incentives for textile and garment products from January 11, 2007 and other products from January 01, 2012 because of commitments to WTO, it may decide whether to apply preferential tax rates and tax exemption period successively or concurrently for the remaining time to textile and garment products from 2007 and to other products from 2012 depending on the business’ fulfillment of requirements (apart from export ratio and use of domestic raw materials) in accordance with the legislative documents on corporate income tax which is effective from the day on which the business is issued with the establishment license to the effective date of the Decree No. 24/2007/ND-CP dated February 14, 2007 of the Government providing guidance on implementation of Law on corporate income tax, or in accordance with regulations of legislative documents on corporate income tax at the time in which tax incentives are adjusted due to the commitments to WTO.

If the adjustments specified in this Circular are more advantageous than the adjustments specified in the previous legislative documents although the enterprise chose the plan prescribed in the latter (whether the businesses has undergone inspection or not). The enterprise shall submit a revised declaration as prescribed in the Law on Tax administration and guiding documents on implementation of tax administration, and their wrong declaration due to revisions will not face penalties for violations against the laws on taxation. In case the CIT paid by the enterprise is greater than the amount payable according to the revised declaration, the taxpayer may decide whether to offset it against the CIT payable of next tax period or claim a refund as prescribed. In the cases where the enterprise has made adjustments in accordance with WTO commitment for textile or garment products as prescribed in the previous legislative documents, has incurred penalties for tax offences and has paid the fines and late payment interest, it is not required to make any adjustments.

Article 24. Implementationresponsibility

1. Tax authorities are responsible for disseminating this Circular and instructing enterprises to implement this Circular.

2. Enterprises regulated by this Circular shall follow the instructions specified in this Circular.

Any difficulties arising in the course during the implementation of this Circular should be reported to the Ministry of Finance for consideration./.

Certification of  Integrated Document

For the Minister

The Deputy Minister

Do Hoang Anh Tuan

LIST OF SPECIMENS

1. Statement of purchases without invoices (Form 01).

2. Statement of electricity and water supply payments (Form 02).

3. Confirmation of sponsorship education (Form 03).

4. Confirmation of sponsorship healthcare (Form 04).

5. Confirmation of sponsorship disaster recovery (Form 05).

6. Confirmation of sponsorship construction of housing for the poor (Form 06).

7. Confirmation of sponsorship extremely disadvantaged areas (Form 07).

8. Declaration of corporate income tax on sale of the entire single-member limited liability company under the ownership of an organization (Form 08).

STATEMENT OF PURCHASES WITHOUT INVOICES

 (Date: … )

- Address: ...............................................................................................................

- Location:..................................................................................

- Purchaser: .....................................................................................

- Total value: ……………………………………………………….

Note:

- Purchases without invoices shall be sorted by date. All details must be included. Purchases on the statement are based upon documentary evidence between the buyer and the vendors. The statement must specify the quantities, values, dates of purchases, addresses and ID numbers of the vendors, and signatures of the vendors and the buyer.

- Each purchasing station of the enterprise (if any) shall prepare a separate statement. A consolidated statement shall be prepared by the enterprise.

STATEMENT OF ELECTRICITY AND WATER SUPPLY PAYMENTS41(abolished)

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
----------------

CONFIRMATION OF SPONSORSHIP EDUCATION

Sponsor’s name:

Address:           Tel:

TIN:

Recipient’s name (educational institution/student/organization):

Address:           Tel:

TIN (if any):

We hereby confirm the sponsorship given by [sponsor’s name] to [recipient’s name] as:

- Sponsorship for a school □

- Sponsorship for provision of teaching and learning equipment and school activities □

- Scholarships □

- Sponsorship for a contest ….. □

Total sponsorship value ........

In cash: ……………..

In kind: …………… converted to VND: …………………

Financial instruments: …………… converted to VND: …………………

 (enclosed with relevant documents about the sponsorship).

 [Fundraiser’s name] is committed to use the sponsorship properly. The undersigned will take legal responsibility for improper use of the sponsorship.

This confirmation is made at … on … into …. copies, each of which is kept by a party.

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
----------------

CONFIRMATION OF SPONSORSHIP HEALTHCARE

Sponsor’s name:

Address:           Tel:

TIN:

Recipient’s name:

Address:           Tel:

TIN (if any):

We hereby confirm the sponsorship given by [sponsor’s name] to [recipient’s name] as:

- Sponsorship for a health facility □

- Sponsorship for medical equipment/medicines □

- Monetary sponsorship □

Total sponsorship value ........

In cash: ……………..

In kind: …………… converted to VND: …………………

Financial instruments: …………… converted to VND: …………………

 (enclosed with relevant documents about the sponsorship).

 [Recipient’s name] is committed to use the sponsorship properly. The undersigned will take legal responsibility for improper use of the sponsorship.

This confirmation is made at … on … into …. copies, each of which is kept by a party.

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
----------------

CONFIRMATION OF SPONSORSHIP DISASTER RECOVERY

Sponsor’s name:

Address:           Tel:

TIN:

Name of recipient or fundraiser:

Address:           Tel:

TIN (if any):

We hereby confirm the sponsorship given by [sponsor’s name] to [recipient’s name] for disaster recovery: ……………..

Total sponsorship value ........

In cash: ……………..

In kind: …………… converted to VND: …………………

Financial instruments: …………… converted to VND: …………………

 (enclosed with relevant documents about the sponsorship).

 [Recipient’s name] is committed to use the sponsorship properly. The undersigned will take legal responsibility for improper use of the sponsorship.

This confirmation is made at … on … into …. copies, each of which is kept by a party.

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
----------------

CONFIRMATION OF SPONSORSHIP CONSTRUCTION OF HOUSING FOR THE POOR

Sponsor’s name:

Address:           Tel:

TIN:

Name of recipient or fundraiser:

Address:           Tel:

We hereby confirm the sponsorship given by [sponsor’s name] to [recipient’s name] for construction of housing for the poor.

Total sponsorship value ........

In cash: ……………..

In kind: …………… converted to VND: …………………

Financial instruments: …………… converted to VND: …………………

 (enclosed with relevant documents about the sponsorship).

 [Recipient’s or fundraiser’s name] is committed to use the sponsorship properly. The undersigned will take legal responsibility for improper use of the sponsorship.

This confirmation is made at … on … into …. copies, each of which is kept by a party.

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
----------------

CONFIRMATION OF SPONSORSHIP EXTREMELY DISADVANTAGED AREAS

Sponsor’s name:

Address:           Tel:

TIN:

Name of recipient or fundraiser:

Address:           Tel:

We hereby confirm the sponsorship given by [sponsor s name] to [recipient s name] for development of extremely disadvantaged areas.

Total sponsorship value ........

In cash: ……………..

In kind: …………… converted to VND: …………………

Financial instruments: …………… converted to VND: …………………

 (enclosed with relevant documents about the sponsorship).

 [Recipient’s or fundraiser’s name] is committed to use the sponsorship properly. The undersigned will take legal responsibility for improper use of the sponsorship.

This confirmation is made at … on … into …. copies, each of which is kept by a party.

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
----------------

CORPORATE INCOME TAX DECLARATION

For enterprises declaring corporate income tax on derived from sale of an entire single-member limited liability company under the ownership of an organization by transferring stakes and real estate)

 [01] Tax period: □ Date of tax incurrence: …

 [02] First declaration □ [03] Addition: □

1. Transferor:

 [04] Taxpayer’s name...........................................................................................

 [06] Address: ...................................................................................................

 [07] District: ………………………… [08] Province: ................................

 [09] Tel: ………………………… [10] Fax: …………………… [11] Email: .....

2. Transferee:

 [12] Transferee’s name: .....................................................

 [13] TIN (of enterprise) or ID number (or individual):

 [14] Address: ..............................................................................................................

 [15] Transfer contract No. … dated … notarized or certified by the People’s Committee of the commune on … .

 [16] Tax agent’s name (if any):..................................................................................

 [18] Address: ............................................................................................................

 [19] District: ………………………… [20] Province: ................................

 [21] Tel: ………………………… [22] Fax: …………………… [23] Email: .....

 [24] Agent contract No. … dated …

Unit: VND

I hereby declare that the information provided above is true to the best of my knowledge./.

1This document is the combination of:

- Circular No. 78/2014/TT-BTC dated June 18, 2014 providing guidelines for implementation of the Government s Decree No. 218/2013/ND-CP dated December 26, 2013 providing guidelines for implementation of the Law on Corporate income tax, which comes into force from August 02, 2014;

- Circular No. 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance on amendments to Circular No. 156/2013/TT-BTC dated 06/11/2013, Circular No. 111/2013/TT-BTC dated 15/8/2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which comes into force from September 01, 2014;

- Circular No. 151/2014/TT-BTC dated October 10, 2014 providing guidelines for implementation of the Government s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014;

- Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance providing guidelines on corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

This document does not replace the four aforementioned Circulars.

2Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities were promulgated pursuant to:

”The Law on Tax administration No. 78/2006/QH11 dated November 29, 2006 and the Law No. 21/2012/QH13 dated November 20, 2012 on amendments to the Law on Tax administration;

The Law on Value-added tax No. 13/2008/QH12 dated June 03, 2008 and the Law No. 31/2013/QH13 dated June 19, 2013 on amendments to the Law on Value-added tax;

The Government s Decree No. 83/2013/ND-CP dated July 22, 2013 providing guidance on implementation of the Law on Tax administration and the Law on amendments to the Law on Tax administration;

The Government s Decree No. 209/2013/ND-CP dated December 18, 2013 on guidelines for implementation of the Law on Value-added tax;

The Government s Decree No. 51/2010/ND-CP dated May 14, 2010 on sale invoices and the Government s Decree No. 04/2014/ND-CP dated January 17, 2014 on amendments to Decree No. 51/2010/ND-CP dated May 14, 2010;

The Government s Decree No. 218/2013/ND-CP dated December 26, 2013 on guidelines for the Law on Corporate income tax;

The Government s Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, entitlements and organizational structure of the Ministry of Finance;

Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees was promulgated pursuant to:

 “The Law on Tax administration No. 78/2006/QH11 and Law No. 21/2012/QH13 on amendments to the Law on Tax administration;

The Law on personal income tax No. 04/2007/QH12 and Law No. 26/2012/QH13 on amendments to the Law on personal income tax;

The Law on Value-added tax No. 13/2008/QH12 and Law No. 31/2013/QH13 on amendments to the Law on Value-added tax;

The Law on Corporate income tax No. 14/2008/QH12 and Law No. 32/2013/QH13 on amendments to the Law on Corporate income tax;

The Decree No. 83/2013/ND-CP dated July 22, 2013 of the Government on providing guidance on implementation of the Law on Tax administration and the Law on amendments to the Law on Tax administration;

The Government s Decree No. 65/2013/ND-CP dated June 27, 2013 providing guidance on the Law on personal income tax and the Law on amendments to the Law on personal income tax;

The Government s Decree No. 209/2013/ND-CP dated December 18, 2013 providing guidance on the implementation of the Law on Value-added tax;

The Government s Decree No. 218/2013/ND-CP dated December 26, 2013 of the Government on providing guidance on the implementation of the Law on Corporate income tax;

The Government s Decree No.  91/2014/ND-CP dated October 1, 2014 on amendments to tax decrees;

The Government s Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, entitlements and organizational structure of the Ministry of Finance;

Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government s Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on amendments to Laws on taxation and amendments to tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance were promulgated pursuant to:

 “The Law on Corporate income tax No. 14/2008/QH12 and Law No. 32/2013/QH13 on amendments to the Law on Corporate income tax;

The Law No. 71/2014/QH11 on amendments to some Articles of Laws on taxation;

The Government s Decree No. 218/2013/ND-CP dated December 26, 2013 on guidelines for the Law on Corporate income tax;

The Government s Decree No. 12/2015/ND-CP dated February 12, 2015 on guidelines for the Law on amendments to Laws on taxation and amendments to Degrees on taxation;

The Government s Decree No. 215/2013/ND-CP dated December 23, 2013 defining the functions, tasks, entitlements and organizational structure of the Ministry of Finance;

3This Clause is amended by Article 1 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

4This Clause is amended by Article 2 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

5This Clause is amended by Article 3 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

6This Point is amended by Clause 1 Article 6 of Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 on tax formality simplification, which comes into force from September 01, 2014.

7This Article is amended by Article 4 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

Clause 2.21 Article 6 of Circular No. 78/2014/TT-BTC dated June 18, 2014 is abolished by Clause 2 Article 14 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015).

 (Part of this Article is amended by Clause 2 Article 6 of Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 on tax formality simplification, which comes into force from September 01, 2014 and by Article 1 of Circular No. 151/2014/TT-BTC on amendments to the Government s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014.

8This paragraph is amended by Clause 1 Article 5 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

9This Clause is amended by Clause 2 Article 5 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

10This Clause is amended by Article 2 of Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014.

11This Clause is superseded by Clause 3 Article 5 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

12This Clause is amended by Clause 1 Article 6 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

13This Clause is amended by Article 3 of Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014.

14This Clause is amended by Clause 2 Article 6 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

 (This Clause is amended by Article 4 of Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014).

15This Clause is added by Clause 3 Article 6 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

16This Clause is amended by Article 7 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

17This paragraph is amended by Article 8 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

18This Clause is amended by Article 9 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

19This Clause is amended by Clause 1 Article 10 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

20This Clause is amended by Clause 2 Article 10 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

21This Clause is amended by Clause 3 Article 10 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

 (This Clause is amended by Article 5 of Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014).

22This Point is amended by Clause 4 Article 10 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

The replacement of the phrase “Khu công nghiệp nằm trên địa bàn các quận nội thành của đô thị loại đặc biệt, đô thị loại I trực thuộc trung ương và khu công nghiệp nằm trên địa bàn các đô thị loại I trực thuộc tỉnh” (“Industrial zones in the administrative divisions of urban districts of special class cities, class I cities affiliated to the central and industrial zones in the administrative divisions of class I cities affiliated to provinces") in Circular No. 78/2014/TT-BTC with the phrase  “Khu công nghiệp nằm trên địa bàn các quận nội thành của đô thị loại đặc biệt, đô thị loại I trực thuộc trung ương và các đô thị loại I trực thuộc tỉnh, không bao gồm các quận của đô thị loại đặc biệt, đô thị loại I trực thuộc trung ương và các đô thị loại I trực thuộc tỉnh mới được thành lập từ huyện kể từ ngày 01/01/2009” (“Industrial zones in the administrative divisions of special class cities, class I cities affiliated to the central and class I cities affiliated to provinces, not including aforesaid districts converted from towns from January 1, 2009" is specified in Clause 1 Article 23 of Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014.23This Clause is added by Clause 5 Article 10 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

24This Clause is amended by Clause 1 Article 11 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

Point dd of this Clause is amended by Clause 3 Article 6 of Circular No. 119/2014/TT-BTC on amendments to Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 on tax formality simplification, which comes into force from September 01, 2014.

25This Clause is amended by Clause 2 Article 11 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

26This Point is amended by Clause 3 Article 11 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

27This Point is amended by Clause 4 Article 11 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

28This Clause is added by Clause 5 Article 11 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

29This Point is amended by Clause 1 Article 12 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

30This Clause is amended by Article 6 of Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014.

31This Clause is amended by Clause 2 Article 12 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

32This Clause is abolished by Clause 2 Article 14 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

33Article 7 of Circular No. 119/2014/TT-BTC dated August 25, 2014 of the Ministry of Finance on amendments to Circular No. 156/2013/TT-BTC dated 06/11/2013, Circular No. 111/2013/TT-BTC dated 15/8/2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance to simplify tax formalities, which comes into force from September 01, 2014, stipulates that:

 “Article 7. Effect

1. This Circular comes into effect from September 01, 2014.

In the cases where an enterprise needs time to prepare for following the procedures and completing the forms provided in the Circulars mentioned in Clause 2 this Article, it may choose the procedures and forms according to current regulations and the regulations on amendment by November 01, 2014 without being required to notify and register with the tax authorities. The General Department of Taxation shall provide instructions on the implementation of this regulation.

2. The instructions and forms provided in the Circular No. 156/2013/TT-BTC dated November 06, 2013, Circular No. 111/2013/TT-BTC dated August 15, 2013, Circular No. 219/2013/TT-BTC dated December 31, 2013, Circular No. 08/2013/TT-BTC dated January 10, 2013, Circular No. 85/2011/TT-BTC dated June 17, 2011, Circular No. 39/2014/TT-BTC dated March 31, 2014 and Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance that is amended, replaced or annulled by this Circular are invalidated.

3. Other tax procedures that are not mentioned in this Circular shall be implemented according to applicable regulations of law.

Any difficulty or obstacle that arises during the implementation of this Circular should be reported to the Ministry of Finance for consideration./."

Article 22, Article 24 and Article 25 of Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014, stipulate that:

 “Article 22. Effect

This Circular takes effect on November 15, 2014.

Provisions of Chapter I of this Circular shall be applied to the tax period 2014 onwards.

Article 24.Collection ofCIT arrears from private investors in the public sectors such as education, vocational training, heath, culture, sport, or environment without meeting criteria in the List of types, scale, or standards applied to private investors in the public sector promulgated by the Prime Minister will be suspended (even if a decision on collection of tax arrears has been issued or the enterprise’s complaint is being processed) until new instructions are provided by competent authorities.

Article 25. Implementation responsibility

1. The People’s Committees of provinces shall instruct regulatory bodies to organize the implementation of this Circular in accordance with regulations of the Government and guidance of the Ministry of Finance.

2. The tax authorities are responsible for instructing organizations or individuals to implement this Circular.

3. Organizations regulated by this Circular must follow instructions in this Circular.

Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Finance for consideration./.”

Article 14 and Article 15 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015 stipulate that:

 “Article 14. Effect

1.This Circular takes effect on August 06, 2015 and applies to the tax period 2015 onwards.

- With regard to enterprises whose fiscal years are different from the solar calendar year:

+ The transfer of CIT incentives (tax exemption/reduction period, preferential tax rate period) specified in this Circular will apply to the remaining period from the tax period 2015.

+ Other amendments come into force from January 01, 2015.

- Enterprises shall declare and pay tax on incomes from overseas investment projects that are set up in the tax period 2014 and earlier in accordance with the Circular on CIT applicable at that time. From 2015, transfer of such incomes to Vietnam is exempt from CIT. This Circular applies to incomes from overseas investment projects from the tax period 2015.

2.Point 2.21 of Clause 2 Article 6, Clause 5 Article 20 of Circular No. 78/2014/TT-BTC and guidance on CIT promulgated by the Ministry of Finance and other authorities that contravene this Circular are abolished.

Article 15. Implementation responsibility

1. The People’s Committees of provinces shall instruct regulatory bodies to organize the implementation of this Circular in accordance with regulations of the Government and guidance of the Ministry of Finance.

2. Tax authorities are responsible for disseminating this Circular and instructing enterprises to implement this Circular.

3. Enterprises regulated by this Circular must follow instructions in this Circular.

Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Finance for consideration./.

34This Clause is added by Clause 1 Article 13 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

35This Clause is added by Clause 1 Article 13 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

36This Clause is added by Clause 1 Article 13 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

37This Clause is added by Clause 1 Article 13 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

38This Clause is added by Clause 1 Article 13 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

39This Clause is amended by Clause 2 Article 13 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.

The replacement of the phrase “Khu công nghiệp nằm trên địa bàn các quận nội thành của đô thị loại đặc biệt, đô thị loại I trực thuộc trung ương và khu công nghiệp nằm trên địa bàn các đô thị loại I trực thuộc tỉnh” (“Industrial zones in the administrative divisions of urban districts of special class cities, class I cities affiliated to the central and industrial zones in the administrative divisions of class I cities affiliated to provinces") in Circular No. 78/2014/TT-BTC with the phrase  “Khu công nghiệp nằm trên địa bàn các quận nội thành của đô thị loại đặc biệt, đô thị loại I trực thuộc trung ương và các đô thị loại I trực thuộc tỉnh, không bao gồm các quận của đô thị loại đặc biệt, đô thị loại I trực thuộc trung ương và các đô thị loại I trực thuộc tỉnh mới được thành lập từ huyện kể từ ngày 01/01/2009” (“Industrial zones in the administrative divisions of special class cities, class I cities affiliated to the central and class I cities affiliated to provinces, not including aforesaid districts converted from towns from January 1, 2009" is specified in Clause 1 Article 23 of Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014.

40This added by Article 7 of Circular No. 151/2014/TT-BTC providing guidelines for implementation of the Government’s Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to tax decrees, which comes into force from November 15, 2014.

41This specimen is abolished by Article 4 of Circular No. 96/2015/TT-BTC providing guidelines for corporate income tax in the Government’s Decree no. 12/2015/ND-CP dated February 12, 2015 elaborating the Law on amendments to tax laws and tax decrees and amendments to Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, which comes into force from August 06, 2015.