Amending Law on Corporate Income Tax must ensure budget revenue and overcome tax evasion

VCN - On September 23, 2024, the National Assembly Standing Committee gave opinions on the draft Law on Corporate Income Tax (amended). Many important contents of the draft Law such as: the scope of regulation of the draft Law; the authority of the National Assembly and the Government in directing, implementing the Law; tax rates for small and micro enterprises... were discussed.
Amend the Law on Corporate Income Tax to ensure stable revenue sources for the budget Amend the Law on Corporate Income Tax to ensure stable revenue sources for the budget
Legal basis for tax collection, payment and management for foreign enterprises Legal basis for tax collection, payment and management for foreign enterprises
Adding tax exemption conditions in the draft revised Law on Corporate Income Tax Adding tax exemption conditions in the draft revised Law on Corporate Income Tax
The session
The session

Content of legalization of the provisions in the Global Minimum Tax Resolution has not been added

At the session, referring to the basic content of the amendment of the Law on Corporate Income Tax (CIT), Deputy Minister of Finance Cao Anh Tuan said that with four chapters and 20 articles, the Bill has closely followed the policy groups in the proposal to build the CIT Bill (amended) which was approved by the National Assembly. At the same time, the Bill has legalized a number of contents that are being implemented stably in by-law documents.

Regarding the content of legalization of the provisions in Resolution No. 107/2023/QH15 on applying additional corporate income tax according to the regulations against global tax base erosion, through research and review, although Resolution No. 107/2023/QH15 takes effect from the 2024 tax period, the declaration and payment of additional corporate income tax is due 12 - 18 months after the end of the 2024 fiscal year.

Deputy Minister of Finance Cao Anh Tuan speaks at the session
Deputy Minister of Finance Cao Anh Tuan speaks at the session

Accordingly, until 2026 enterprises will reach the deadline for applying the provisions of Resolution No. 107/2023/QH15 and it is not possible to assess the effectiveness and issues arising in practical implementation. Therefore, the Bill has not added the content of legalizing the provisions of Resolution No. 107/2023/QH15 mentioned above to ensure the principle and viewpoint of building the Law is "Legalizing clear issues that have been tested in practice to be appropriate, including the contents that have been implemented stably in by-law documents".

Along with that, the Bill devotes a chapter to regulations on corporate income tax incentives and has new regulations on tax rates for small-sized enterprises and applies criteria to promote the development of this group.

Thus, in Chapter 2 on corporate income tax rates, the Bill stipulates the tax rate of 20%. Enterprises with total annual revenue of no more than VND 3 billion shall apply a tax rate of 15%; those with total annual revenue from over VND 3 billion to no more than VND 50 billion shall apply a tax rate of 17%.

The Bill also amends the minimum tax rate of the tax rate bracket for oil and gas exploration and exploitation activities from "from 32% to 50%" to "from 25% to 50%" and "the Prime Minister shall decide on the specific tax rate appropriate to each oil and gas contract" to be consistent with the Law on Petroleum; at the same time, it supplements detailed regulations on tax rates for exploration, exploitation and processing of rare mineral resources on the basis of legalizing the provisions in by-Law documents that are being implemented stably and without problems to ensure transparency and stability of the policy.

Regarding preferential tax rates and preferential application period, the Bill amendments and supplements the provisions on the application of a 10% corporate income tax rate for the 15 year-period for new investment projects in economic zones located in areas with difficult or extremely difficult socio-economic conditions.

At the same time, the Bill adds provisions on the application of a 15% preferential tax rate for income of press agencies from press activities other than print newspapers. Print newspapers continue to apply the 10% preferential tax rate as currently prescribed.

It is necessary to clearly define the authority of the National Assembly and the Government in implementation

At the meeting, Chairman of the Law Committee Hoang Thanh Tung highly appreciated the proposal of the Government as well as the Report on the assessment of the draft Law on Corporate Income Tax (amended) of the Finance and Budget Committee. However, the drafting agency is required to clarify the regulation scope of the draft Law.

At the same time, it is recommended that the Government and the Finance and Budget Committee study methods for amending and reviewing a number of taxes, including the draft Law on Corporate Income Tax (amended) to have a common approach to taxes, ensuring that tax amendments meet the socio-economic development situation, especially tax exemption policies.

According to the Chairman of the Law Committee, to avoid overlapping in functions and tasks in the process of directing, implementing and enforcing the law, it is necessary to clearly define which tasks the National Assembly assigns to the Government to perform, and which issues are under the authority of the Government to implement.

Giving opinion at the session, National Assembly Chairman Tran Thanh Man said that it is necessary to solve problems in the current law and continue study unclear contents. If the Law on Corporate Income Tax is to be comprehensively amended, there must be an impact assessment and the amended law must be better than the current one.

In addition, the amendment of the Law on Corporate Income Tax must ensure state budget revenue, overcome tax evasion and tax losses, and must be consistent with international practices.

Concluding the session, Vice Chairman of the National Assembly Nguyen Khac Dinh requested the Government to direct the drafting agency and relevant agencies to study and absorb the opinions of the National Assembly Standing Committee and the opinions of the assessment agency to complete the draft Law dossier.

At the same time, he requested relevant agencies to propose new approaches and methods in synchronously and comprehensively amending and supplementing laws in the fields of taxes and fees and laws in the fields of finance and budget in general; meeting practical requirements and renewing thinking in law-making in the new development stage of the country.

Clarifying the issue of a comprehensive review of tax policies, especially tax incentives, Deputy Minister Cao Anh Tuan said that the Government has prepared to submit to the National Assembly three tax laws at the 8th Session, including the Law on Corporate Income Tax, the Law on Special Consumption Tax, and the Law on Value Added Tax. These laws have been comprehensively reviewed, meeting the requirements of the Politburo and the National Assembly’s Resolution 23 on expanding the tax base and limiting incentives.

In particular, the incentive sectors have been narrowed down to only 30 groups, including 23 groups applying high incentives and 7 groups applying low incentives (the current Investment Law currently stipulates 100 groups of industries, including 32 groups of special incentives and 67 groups of incentives). The Law has also focused on the groups of industries that are encouraged to receive incentives and has been reported in detail.

By Hoai Anh/ Huyen Trang

Related News

Does goods imported for investment incentives project subjected to tax exemption?

Does goods imported for investment incentives project subjected to tax exemption?

VCN - That is the problem of Ba Ria - Vung Tau Customs Department related to processing tax exemption documents for imported goods to serve investment incentive projects.
Continuing to evaluate impacts and controversial issues to complete VAT Bill

Continuing to evaluate impacts and controversial issues to complete VAT Bill

VCN - On the afternoon of June 24, continuing the Program of the 7th Session of the 15th National Assembly, the National Assembly discussed the project of the Law on Value Added Tax (revised). At the discussion session, Minister of Finance Ho Duc Phoc explained a number of issues of concern to delegates.
Building a flexible mechanism and "reinforcing" administration for state-owned enterprises

Building a flexible mechanism and "reinforcing" administration for state-owned enterprises

VCN - State-owned enterprises (SOEs) always need flexible and responsive operating mechanisms as well as adequate legal corridors to remove bottlenecks and release resources for SOEs in socio-economic development.
Opportunity for Vietnam to improve its business investment environment

Opportunity for Vietnam to improve its business investment environment

VCN - Minister of Planning and Investment Nguyen Chi Dung affirmed that it is necessary to comprehensively evaluate the system of policies and laws on investment encouragement to supplement and adjust new incentive and investment support mechanisms to ensure ensuring competitiveness and attractiveness of the investment environment.

Latest News

Increasing institutional investors – improving quality of corporate bond market

Increasing institutional investors – improving quality of corporate bond market

VCN - The structure and quality of investors have been one of the limitations of the corporate bond market in recent times. To improve the quality of the market, increasing institutional investors and improving the quality of investors, including individual investors, is one of the solutions that have been implemented by management agencies, thereby building a sustainable corporate bond market.
Urgent measures to restore production post-disaster

Urgent measures to restore production post-disaster

VCN - To quickly restore agricultural production after storm No. 3 and floods, the Prime Minister assigned the Ministry of Finance to guide the immediate implementation of financial support policies, tax exemptions, reductions, and extensions, land rents, water surface rents, etc. for those affected by storms and floods; continue to research to have policies to exempt and reduce fees and charges for those affected.
Risks for the economy when cash flow has not yet been put in to production and business

Risks for the economy when cash flow has not yet been put in to production and business

VCN - Investment channels in Vietnam have a lot of potential, but financial and banking expert Dr. Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets, said that cash flow into production and business is still modest, leading to risks for the economy.
An open banking system is essential for a smart city

An open banking system is essential for a smart city

Building a smart city with a smart payment system playing a key role has helped Hanoi gradually transform and make breakthroughs in the process of development, said Ha Minh Hai, Vice Chairman of the municipal People's Committee.

More News

Tax sector focuses on simplifying tax administrative procedures

Tax sector focuses on simplifying tax administrative procedures

VCN - The tax sector is focusing on researching and proposing amendments to legal documents to simplify processes and procedures; promoting the modernization of information technology applications to support the settlement of tax refund dossiers more conveniently and quickly.
Individual customers' deposits in Jan-Jul see record high

Individual customers' deposits in Jan-Jul see record high

Total deposits from individual customers at banks had reached 6.8 quadrillion VND (276.3 billion USD) in the first seven months of this year, marking the highest level ever, according to the latest data released by the State Bank.
FED cuts interest rates: A good opportunity for Vietnam’s exports and investments

FED cuts interest rates: A good opportunity for Vietnam’s exports and investments

VCN - The U.S. Federal Reserve (FED) has decided to cut interest rates and announced plans for further reductions until 2026. According to Dr. Can Van Luc, Chief Economist at BIDV and a member of the National Financial and Monetary Policy Advisory Council, the FED's shift in monetary policy has presented a great opportunity for Vietnam's exports and investments.
Developing smart cities through open banking ecosystem

Developing smart cities through open banking ecosystem

VCN - Building smart cities is an inevitable development trend, requiring synchronous digital transformation of many fields, including banking and finance.
Vietnam’s stock market likely to reach 9 million accounts by 2025

Vietnam’s stock market likely to reach 9 million accounts by 2025

Vietnam is on track to reach 9 million stock trading accounts by 2025 and 11 million by 2030, CEO of Vietnam Report JSC Vu Dang Vinh has said.
Managing price effectively, reducing pressure on inflation

Managing price effectively, reducing pressure on inflation

VCN - Timely and effective price management helps control the consumer price index (CPI) and inflation in accordance with the set target.
Important step to soon upgrade stock market

Important step to soon upgrade stock market

VCN - According to experts, the Ministry of Finance's issuance of Circular No. 68/2024/TT-BTC dated September 18, 2024 is an important step in the process towards the goal of improving the quality of the Vietnam’s stock market.
Accelerate implementation of solutions to disburse public investment capital

Accelerate implementation of solutions to disburse public investment capital

VCN - Facing the impact of storm No. 3 on economic growth, many experts continue to believe that public investment will play a key role in economic recovery and growth for the entire year of 2024. However, there is only one quarter left until the end of 2024. The target of disbursing at least 95% of investment capital is facing many difficulties.
E-commerce platforms may declare and pay taxes on behalf of traders

E-commerce platforms may declare and pay taxes on behalf of traders

VCN – At the press conference for the third quarter of 2024 hold by the Ministry of Finance on September 27, the representative of the General Department of Taxation discussed contents related to tax management.
Read More

Your care

Latest Most read
Increasing institutional investors – improving quality of corporate bond market

Increasing institutional investors – improving quality of corporate bond market

VCN - The structure and quality of investors have been one of the limitations of the corporate bond market in recent times. To improve the quality of the market, increasing institutional investors and improving the quality of investors, including individu
Urgent measures to restore production post-disaster

Urgent measures to restore production post-disaster

To quickly restore agricultural production after storm No. 3 and floods, the Prime Minister assigned the Ministry of Finance to guide the immediate implementation of financial support policies
Risks for the economy when cash flow has not yet been put in to production and business

Risks for the economy when cash flow has not yet been put in to production and business

Investment channels in Vietnam have a lot of potential, but financial and banking expert Dr. Nguyen Tri Hieu said that cash flow into production and business is still modest, leading to risks for the economy.
An open banking system is essential for a smart city

An open banking system is essential for a smart city

Building a smart city with a smart payment system playing a key role has helped Hanoi gradually transform and make breakthroughs in the process of development, said Ha Minh Hai, Vice Chairman of the municipal People's Committee.
Tax sector focuses on simplifying tax administrative procedures

Tax sector focuses on simplifying tax administrative procedures

VCN - At the dialogue conference between the General Department of Taxation and enterprises of 5 southern provinces and cities held last weekend, the Tax sector received over 400 issues, of which the most prominent was the issue of corporate income tax (C
Mobile Version