Tax incentives for high-tech enterprises

This option has the advantage of encouraging businesses to strive to become high-tech businesses...

One of the contents of the Draft Decree of the Government detailing and guiding the implementation of a number of articles of the Law on Corporate Income Tax (CIT) and the Law on amending and supplementing a number of articles of the Law on Corporate Income Tax (CIT), which has just been completed by the Ministry of Finance, is to specify CIT incentives for groups of enterprises operating in the high-tech sector and agricultural enterprises applying high technology.

According to the provisions of the Law amending and supplementing a number of articles of the Law on Corporate Income Tax, high-tech enterprises and high-tech agricultural enterprises are subject to a tax rate of 10% for 15 years, tax exemption for a maximum of 4 years, and a 50% reduction in corporate income tax for a maximum of 9 subsequent years. The tax incentive period is calculated from the date of being granted a certificate as a high-tech enterprise or high-tech agricultural enterprise.

TH True Milk Factory (Nghe An) under TH Milk Group is one of the high-application agricultural enterprises. Photo: Vnexpress

According to the assessment of the Ministry of Finance, in reality, there are currently cases where enterprises investing in High-tech Parks, Economic Zones, and areas with particularly difficult socio-economic conditions have enjoyed the highest level of corporate income tax incentives according to current regulations (10% tax rate for 15 years, tax exemption for 4 years, 50% reduction of corporate income tax for the next 9 years). If, during the incentive period, the enterprise meets all the conditions and is granted a Certificate of high-tech enterprise or high-tech agricultural enterprise by the competent authority, the level of incentives for the enterprise is determined clearly.

Therefore, in the Draft Decree, the Ministry of Finance proposed two options, specifically: High-tech enterprises will enjoy the entire incentive package (10% tax rate for 15 years, 4-year exemption, 9-year reduction) from the date of issuance of the certificate, regardless of the previous incentive period.

This option has the advantage of encouraging enterprises to strive to become high-tech enterprises, high-tech agricultural enterprises, but the disadvantage is that it does not ensure the preferential principle of the Corporate Income Tax Law, which is that an income is only entitled to one incentive package under the most favorable incentive conditions, and it can easily lead to cases where enterprises take advantage of incentive policies to enjoy long incentive periods.

Option 2 is: High-tech enterprises enjoy tax incentives for the remaining period, excluding the period already enjoyed.

Accordingly, it will ensure the principles of the Law on Corporate Income Tax and avoid cases where enterprises take advantage of preferential policies to enjoy long preferential periods, but it also has the disadvantage of not encouraging enterprises to strive to become high-tech enterprises or high-tech agricultural enterprises./.

According to VOV - LY