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) What are supporting industry products? (2) Subjects eligible for incentives under Decree 57.
1. What are supporting industry products?
According to Clause 1, Article 3 of Decree 111/2015/ND-CP stipulating support and preferential policies for the development of supporting industries, the following are defined: “Supporting industries are industries that produce raw materials, materials, components and spare parts for the production of finished products”.
Details of the List of Supporting Industry Products are specified at:
– Appendix 1: List of supporting industrial products prioritized for domestic development that can be produced before January 1, 2015 (issued together with Circular No. 55/2015/TT-BCT dated December 30, 2015, of the Ministry of Industry and Trade);
– Appendix: List of supporting industry products prioritized for development (Issued together with Decree No. 111/2015/ND-CP dated November 3, 2015, of the Government).
2. Subjects eligible for incentives under Decree 57
Being an enterprise with an investment project (new investment and expansion investment) producing supporting industry products (“Enterprise”), implemented before January 1, 2015, has been granted Certificate of Incentives for production of supporting industry products by The Competent Authority:
a. Subject 1: Enterprises whose income from the project of producing supporting industry products has not yet enjoyed CIT incentives.
b. Subject 2: Enterprises whose incomes from projects to produce supporting industry products have enjoyed all CIT incentives under other preferential conditions (besides preferential conditions for supporting industry products production projects).
c. Subject 3: Enterprises that earn income from supporting industry product production projects are enjoying CIT incentives under other preferential conditions (besides preferential conditions for supporting industry products production projects).
Meaning of Decree 57:
There are two particularly important meanings from the implementation of Decree 57:
– Firstly: It has special meaning for enterprises in the field of supporting industry. Through the CIT incentive policy, businesses can partly overcome financial difficulties due to the complicated impact of the Covid-19 pandemic, which directly and deeply affects the financial situation for a long time and has no end yet.
– Secondly: Decree 57 has recognized the Government’s efforts in policy reform and creating a favorable business environment for enterprises.
Decree 57 takes effect from the date of signing (June 4, 2021).
Hope the above information is helpful to The Esteemed Readers.
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