| THE NATIONAL ASSEMBLY --------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------- |
| No. 14/2008/QH12 | Hanoi, June 3, 2008 |
LAW
ON ENTERPRISE INCOME TAX
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10;
The National Assembly promulgates the Law on Enterprise Income Tax.
Chapter I
GENERAL PROVISIONS
Article 1.- Governing scope
This Law provides for enterprise income taxpayers, taxable incomes, tax-exempt incomes, tax bases, tax calculation methods, and tax incentives.
Article 2.- Taxpayers
1. Taxpayers are goods and service production and business organizations which have taxable incomes under the provisions of this Law (below referred to as enterprises), including:
a/ Enterprises established under Vietnamese law;
b/ Enterprises established under foreign laws (below referred to as foreign enterprises) with or without Vietnam-based permanent establishments;
c/ Organizations established under the Law on Cooperatives;
d/ Non-business units established under Vietnamese law;
e/ Other organizations engaged in income-generating production and business activities.
2. Enterprises having taxable incomes under Article 3 of this Law shall pay enterprise income tax as follows:
a/ Enterprises established under Vietnamese law shall pay tax on taxable incomes generated in and outside Vietnam;
b/ Foreign enterprises with Vietnam-based permanent establishments shall pay tax on taxable incomes generated in Vietnam and taxable incomes generated outside Vietnam which are related to the operation of such establishments;
c/ Foreign enterprises with Vietnam-based permanent establishments shall pay tax on taxable incomes generated in Vietnam which are not related to the operation of such permanent establishments.
d/ Foreign enterprises without Vietnam-based permanent establishments shall pay tax on taxable incomes generated in Vietnam.
3. Foreign enterprises permanent establishments are production and business establishment through which foreign enterprises conduct some or all income-generating production and business activities in Vietnam, including:
a/ Branches, executive offices, factories, workshops, means of transport, mines, oil and gas fields, or other places of extraction of natural resources in Vietnam;
b/ Construction sites, construction works, installation and assembly projects;
c/ Establishments providing services, including consultancy services through employees or other organizations or individuals;
d/ Agents for foreign enterprises;
e/ Vietnam-based representatives, in case of representatives which are competent to conclude contracts in the name of foreign enterprises or representatives which are incompetent to conclude contracts in the name of foreign enterprises but regularly deliver goods or provide services in Vietnam.
Article 3.- Taxable incomes
1. Taxable incomes include income from goods and service production and business activities and other incomes specified in Clause 2 of this Article.
2. Other incomes cover income from the transfer of capital or real estate; income from the right to own or use assets; income from the transfer, lease or liquidation of assets; income from interests, loans or foreign currency sales; refund of provisions; recovery of bad debts already written off; collection of payable debts of unidentifiable creditors; omitted income from previous years business activities, and other incomes, including income generated from production and business activities outside Vietnam.
Article 4.- Tax-exempt incomes
1. Income from cultivation, husbandry and aquaculture of organizations established under the Law on Cooperatives.
2. Income from the application of technical services directly for agriculture.
3. Income from the performance of contracts on scientific research and technological development, trial products and products turned out with technologies applied for the first time in Vietnam.
4. Income from enterprises goods and service production and business activities exclusively reserved for disabled, detoxified and HIV-infected laborers. The Government shall specify criteria and conditions for the determination of enterprises exclusively reserved for disabled, detoxified and HIV-infected laborers.
5. Income from job-training activities exclusively reserved for ethnic minority people, the disabled, children in extremely disadvantaged circumstances and persons involved in social evils.
6. Incomes divided for capital contribution, joint venture or association with domestic enterprises, after enterprise income tax has been paid under the provisions of this Law.
7. Received financial supports used for educational, scientific research, cultural, artistic, charitable, humanitarian and other social activities in Vietnam.
Article 5.- Tax period
1. An enterprise income tax period is the calendar year or fiscal year, except the cases defined in Clause 2 of this Article.
2. The enterprise income tax period upon each time of income generation applies to foreign enterprises specified at Points c and d, Clause 2, Article 2 of this Law.
Chapter II
TAX BASES AND TAX CALCULATION METHODS
Article 6.- Tax bases
Tax bases include taxed income and tax rate.
Article 7.- Determination of taxed income
1. Taxed income in a tax period is the taxable income minus tax-exempt incomes and losses carried forward from previous years.
2. Taxable income is turnover minus deductible expenses for production and business activities plus other incomes, including income received outside Vietnam.
3. Income from real estate transfer must be separately determined for tax declaration and payment.
The Government shall detail and guide the implementation of this Article.
