Business

About 700,000 firms to benefit from cut in corporate income tax

About 700,000 enterprises are expected to enjoy a cut in corporate income tax (CIT) to between 15-17 percent from July 1 this year, down from the current rate of 20 percent.
About 700,000 firms to benefit from cut in corporate income tax ảnh 1People apply for business registration certificates at the Department of Planning and Investment. (Photo: baodauthau.vn)

Hanoi (VNS/VNA) - About700,000 enterprises are expected to enjoy a cut in corporate income tax (CIT)to between 15-17 percent from July 1 this year, down from the current rate of20 percent.

This isone proposal by the Ministry of Finance to be submitted to the NationalAssembly in the May meeting to implement the CIT incentive scheme for micro andsmall enterprises from July 1, six months earlier than the initial roadmap ofJanuary 1, 2021, to alleviate business difficulties amid the COVID-19 pandemic.

The taxrate for micro and small enterprises is 15-17 percent depending on the revenueand the number of employees of the business.

At thesame time, new enterprises who transform from business households will enjoy anincome tax exemption for two consecutive years from the time they first make aprofit.

“In thecase of implementing from July, the policy will assist 700,000 businesses,accounting for 93 percent of the total enterprises nationwide, reducing theirtax obligation by about 7.8 trillion VND in 2020,” said Minister of Finance DinhTien Dung.

It isestimated that the State budget will lose about 15.6 trillion VND (669.5million USD) in revenue every year.

Inaddition, to further support new enterprises, the ministry is proposing toslash business-related fees by between 50 percent and 70 percent, worth anestimated 500 billion VND (21.5 million USD) this year.

The cutincludes 70 percent of the enterprise registration fee; 67 percent of chargesfor providing information about enterprises; 50-70 percent of the fee forassessment, amendment and supplementation of postal operation licences.

Theministry is also revising its circular on licence tax. It is expected that inthe second quarter, micro and small business converted from business householdswill be exempt from the licence tax.

The taxexemption period is three years from the issuing date of the first businessregistration certificate.

Earlier,the Ministry of Finance issued a circular slashing fees for nine service groupsand offering six service groups free in the field of securities applied at thestock exchanges and depository centre./.
VNA
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