On June 4, 2021, the Government issued Decree No. 57/2021/ND-CP (“Decree 57”) amending and supplementing Decree No. 218/2013/ND-CP on Corporate Income Tax (“CIT”) for projects producing supporting industry products (“supporting industry”) implemented before January 1, 2015, and has been granted Certificate of Incentives for production of supporting industry products.
This newsletter reviews the following main points: (1) How to determine the period of application preferences?; (2) Things Enterprises should do to take advantage of the preferential policies in Decree 57.
1. How to determine the period of application preferences?
In case an enterprise whose income from a project to produce supporting industry products is not yet entitled to CIT incentives, the incentive period = the time to enjoy CIT incentives according to the conditions of the supporting industry (from the tax period that the Certificate of eligibility for the supporting industry sector was issued by the competent authority).
In case an enterprise whose income from the supporting industry project has fully enjoyed/is enjoying CIT incentives under other preferential conditions (besides the preferential conditions for supporting industry projects), Incentive period = remaining time of supporting industry incentives (from the tax period that the Certificate of eligibility for the supporting industry sector was issued by the competent authority).
Therein:
The remaining time = CIT incentive period according to the conditions of supporting industry projects (-) number of years of tax exemption, number of years of tax reduction, number of years of enjoying preferential tax rates under other preferential conditions.
2. Things Enterprises should do to take advantage of the preferential policies in Decree 57
Enterprises operating in the field of producing supporting industry products, especially those with supporting industry projects implemented before January 1, 2015, should:
– Reviewing the ability to meet the conditions as prescribed in Decree 57 and related documents;
– Timely implement necessary procedures with specialized management agencies such as the Ministry of Industry and Trade and tax authorities to apply tax incentives in accordance with regulations and in a timely manner.
– If tax incentives have been applied in the field of supporting industry, it is still necessary to review to ensure that preferential conditions are maintained during the operation of the project in accordance with regulations.
Decree 57 takes effect from the date of signing (June 4, 2021).
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