In a decree to take effect on September 20, 2012, the Vietnamese government has confirmed that small and medium-sized enterprises (SMEs) will be given a 30 percent reduction in corporate income tax (CIT) this year.
Businesses, with at least 300 full-time employees, involved in labour-intensive production and processing activities in the agricultural produce, footwear, garment, electronic component and infrastructural construction industries will also benefit from the CIT cut, but SMEs in the real estate, lottery, securities, banking and insurance sectors, as well as those involved in the production or provision of commodities and services that are subject to excise tax, will not.
With the government looking to help businesses and individuals in the current difficult economic conditions, it has also been decided to grant a personal income tax exemption for individuals earning salaries or business income within the first tax bracket, from July 1 to the end of this year.
In addition, a 50 percent reduction in value-added tax and CIT has been provided in 2012 for individuals or businesses that rent accommodation to workers or students, or that provide meals for workers of other firms, except for those in transport and aviation.
Finally, if, at the same time, a business is entitled to more than one tax incentive over the same taxable income, it will be allowed to choose the most advantageous incentive.