The Ministry of Finance does not "undercut" the business preference
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Circular 83/2016 / TT-BTC has been reviewed thoroughly before promulgation. |
Only using the most profitable preference
After the Investment Law 2014 was approved and took effect from July 1, 2015, the Government issued Decree No. 118/2015/ ND-CP of the Government regulating details and guidance of the implementation of some provisions of the Investment Law, effective from November 27, 2015. At the same time, the Ministry of Finance issued Circular No. 83/2016/ TT-BTC guiding the implementation of investment incentives as defined in two above documents and took effect from August 1, 2016.
However, after the new circular was introduced, some articles have shown that the new rules and regulations were not consistent with the Investment Law 2014 and undercut the business incentives and preference.
Specifically, many articles stated there were two unreasonable contents, including: The new investment projects which meet the requirements of preferential conditions for company income tax (CIT) have the right to enjoy the best preferential level; The investment projects which were licensed before July 1, 2015 still were entitled to enjoy preference under the new rules for the remaining time.
Regarding the first content, a representative of the Tax Policy Department commented: Paragraph 3 of Article 15 of the Investment Law 2014 stipulated the specific investment incentives which were applied to each type of new investment projects according to the provisions of the tax law.
Meanwhile, in the tax law, especially Clause 4 of Article 18 of the Vietnam Enterprise Income Tax Law in 2013 stated quite clearly: At the same time, if enterprises enjoy many different levels of tax incentives for the same income, enterprises may choose to apply the most favorable tax incentives.
Thus, the investment projects enjoy the most favorable tax incentives if enterprises simultaneously satisfy several conditions of tax incentives under Circular No. 83 of the Ministry of Finance, consistent with the Investment Law and Enterprise Income Tax Law.
Ensure the legal rights when the laws change
Regarding contents that allow the investment projects licensed before July 1, 2015 to enjoy tax incentives under the new rules for the remaining time, a representative of the Tax Policy Department said that it ensures the legal rights of enterprises when the laws have changed.
This priority was regulated in the Investment Law 2014 and Decree 118 on the spirit of "incentives which investors were entitled to under the provisions of the legislation prior to the new legislation taking effect".
Thus, the statement: "The Ministry of Finance’s guidelines were seriously against the law, undercut the business preference in the field of investment” did not fully take into account the content of the guidance under Circular No. 83.
The Ministry of Finance also confirmed the issue that the guidelines for “new investment projects enjoying tax incentives if they meet the requirements of CIT incentives stipulated by the CIT Law" under Circular 83 was right, in accordance with the provisions of the Investment Law, the current Enterprise Income Tax Law, not undercutting the business preference.
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In conclusion, the content of Circular 83/2016 / TT-BTC has been reviewed thoroughly to ensure conformity with the provisions of the Investment Law and the current tax law.
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