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THE
GOVERNMENT
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
26/2001/ND-CP
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Hanoi, June 04, 2001
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DECREE
AMENDING AND
SUPPLEMENTING A NUMBER OF ARTICLES OF THE GOVERNMENT�S DECREE No. 30/1998/ND-CP
OF MAY 13, 1998 DETAILING THE IMPLEMENTATION OF THE LAW ON ENTERPRISE INCOME
TAX
THE GOVERNMENT
Pursuant to the Law on Organization of the
Government of September 30, 1992;
Pursuant to the Enterprise Income Tax Law (No. 03/1997/QH9 of May 10, 1997);
Pursuant to Clauses 11 and 12, Article 1 of the Law amending and supplementing
a number of articles of the Foreign Investment in Vietnam Law (No. 18/2000/QH10
of June 9, 2000);
At the proposal of the Minister of Finance,
DECREES:
Article 1.- To amend and
supplement a number of articles of the Government’s Decree No. 30/1998/ND-CP of
May 13, 1998 detailing the implementation of the Law on Enterprise Income Tax
as follows:
1. To amend and supplement Clauses 1, 6 and
7, Article 3 stipulating the turnover for calculating the taxable incomes as
follows:
a) Clause 1, Article 3 shall be amended and
supplemented as follows:
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b) Clause 6, Article 3 shall be amended as
follows:
"6. For property-leasing activities, it
shall be the rentals to be collected in each period according to contracts. In
cases where the lessees pay rentals in advance for many years, the turnover
shall be divided for the number of such years correspondingly."
c) Clause 7, Article 3 shall be amended as
follows:
"7. For credit activities, it shall be the
to-be-collected loan interests arising in the tax calculation period."
2. To amend and supplement Clauses 6 and 7,
Article 4 stipulating the reasonable expenses allowed to be subtracted when
calculating the taxable incomes as follows:
a) Clause 6, Article 4 shall be amended and
supplemented as follows:
"6. Expenses paid to female laborers as
prescribed by law; labor protection expenses; expenses for working clothes
according to the maximum levels prescribed by the Ministry of Finance; expenses
for the protection of the business establishments; deductions for social
insurance and health insurance funds which fall under the responsibility of the
labor-employing business establishments; trade union’s budget; deductions for
forming the financial sources to cover expenses for management by superior
bodies according to the prescribed regime."
b) Clause 7, Article 4 shall be amended as
follows:
"7. Payment for the interests on the
capital borrowed from credit institutions, as well as other organizations and
individuals according to the actual interest rates agreed upon when signing the
borrowing contracts, which, however, must not exceed the highest lending
interest rate announced by commercial banks at the time of signing the
borrowing contracts".
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"Turnovers and reasonable expenses shall be
recorded in the accounting books of business establishments in Vietnam dong. In cases where a turnover or expenditure is made in foreign currency, it must
be converted into Vietnam dong at the average exchange rate of the inter-bank
market at the time when such turnover or expenditure arises".
4. Clause 3, Article 9 shall be amended as
follows:
"3. For business establishments that have
convenient business locations, less competitive but highly profitable business
lines, if, after paying enterprise income tax at the tax rate of 32%, the
remaining income is higher than the existing capital of their owners by 20%,
the amount exceeding 20% shall be liable to enterprise income surtax at the
rate of 25%.
Enterprise income surtax shall be temporarily
not collected in the following cases:
a) Business establishments entitled to enjoy the
enterprise income tax rate of 25% for a period of three years as from the
effective date of the Law on Enterprise Income Tax as prescribed in Clause 2,
Article 9 of the Government’s Decree No. 30/1998/ND-CP of May 13, 1998;
b) Investment projects in the fields, production
and/or business lines or geographical areas where investment is encouraged,
which are entitled to enjoy the enterprise income tax rates of 25%; 20% or 15%
as prescribed in Clauses 4 and 5, Article 9 of the Government’s Decree No.
30/1998/ND-CP of May 13, 1998;
c) Production establishments exporting more than
50% of their products or having an export turnover accounting for more than 50%
of their total turnover."
5. Article 12 shall be amended as follows:
"All incomes earned by foreign investors
from their investment in Vietnam (including the refunded income tax amount and
the amount of income tax gained due to capital transfer), which are either
transferred abroad or kept outside Vietnam, shall be liable to tax on the
transfer of income abroad.
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1. The tax rate of 3% shall apply to:
a) Overseas Vietnamese investing in the country
under the Law on Foreign Investment in Vietnam;
b) Foreign investors investing in industrial
parks, export-processing zones and hi-tech parks;
c) Foreign investors, who contribute an amount
of USD 10 million or more to legal capital or capital for the performance of
business cooperation contracts;
d) Foreign investors, who invest in geographical
areas meeting with special socio-economic difficulties, which are on the list
of geographical areas where investment is encouraged.
2. The tax rate of 5% shall apply to:
a) Foreign investors, who contribute an amount
of from USD 5 million to under 10 million to legal capital or capital for the
performance of business cooperation contracts;
b) Foreign investors investing in projects on
medical examination and treatment, education and training or scientific
research.
3. The tax rate of 7% shall apply to foreign
investors who make legal capital contributions or business cooperation capital
contributions other than cases prescribed in Clauses 1 and 2 of this
Article".
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The provisions of the Government’s Decree No.
30/1998/ND-CP of May 13, 1998 detailing the implementation of the Law on
Enterprise Income Tax and other guiding documents, which are contrary to this
Decree, are hereby annulled.
Article 3.- The Minister of
Finance shall guide the implementation of this Decree.
The ministers, the heads of the
ministerial-level agencies, the heads of the agencies attached to the
Government and the presidents of the People’s Committees of the provinces and
centrally-run cities shall have to implement this Decree.
ON BEHALF OF THE GOVERNMENT
FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER
Nguyen Tan Dung