Income tax free from PIT

INCOMES ARE FREE OF CIT:

I. Legal basis for income exempt from CIT:

Circular 78 / TT-BTC.

At the same time, it was amended and supplemented by Circular 151/2014 / TT-BTC, Circular 96/2015 / TT-BTC.

II. Latest CIT exempt earnings:

Includes the following 12 items:

1. Income is exempt from CIT related to cultivation, husbandry, and cultivation of agriculture, forestry, fishery and salt production.

Specifically include:

- Income from the following activities of the cooperative:

+ Cultivating, breeding, cultivating, processing agricultural and aquatic products, producing salt

Agriculture, forestry, fisheries, salt production in areas with difficult or extremely difficult socio-economic conditions.

- Income from the following activities of the enterprise:

+ Cultivating, breeding, rearing and processing agricultural and aquatic products in areas with extremely difficult socio-economic conditions.

+ Activities of fishing.

- Income from liquidation of products from cultivation, husbandry, and farming (except liquidation of rubber gardens).

- Income from the sale of waste products related to cultivation, husbandry, and processing of agricultural and aquatic products.

Note:

* Taxpayers must separately determine income from products and goods processed from agricultural and aquatic products to enjoy preferential CIT rate.

* Products from the above mentioned cultivation, husbandry and breeding are determined according to the level 1 code of the agriculture, forestry and fishery sectors specified in the System of Vietnam's economic sectors.

Income subject to CIT exemption from technical services directly serving agriculture.

Include the earnings below:

- Income from irrigation and drainage services; plow soil; dredging inland canals and ditches; pest control services for plants and animals.

- Agricultural product harvesting services.

3.Incomes from contracts for scientific research and technological development under the Law on Science and Technology are CIT-exempt if eligible.

In order for these subjects to be eligible for CIT-exempt incomes, the following conditions must be met:

* Condition 1:

+ Tax exemption during the contract performance.

+ The period of exemption must not exceed 3 years from the date of commencement of revenue. Particularly for incomes from the sale of products made from a new technology for the first time applied in Vietnam, they shall be exempt from tax for no more than 5 years from the date of turnover (must be certified by a competent agency).

+ Income from the sale of products under trial production during trial production in accordance with law.

* Condition 2: Incomes from the performance of the contract must:

+ Having a certificate of registration for scientific research;

+ Having been certified by a competent State management agency in charge of science as a scientific research and technological development contract.

4. Income of enterprises with an average of 30% or more of employees in a year who are disabled, after detoxification and HIV infection are among the CIT-exempt incomes.

- Except for the following cases:

+ "Other income" items are specified in Article 7 of Circular 78/2014 / TT-BTC.

+ Enterprises operating in the field of finance, real estate business.

Note:

+ Employees who are disabled, after detoxification or infected with HIV must have a certification from a competent agency

+ The average number of employees in a year is at least 20 people or more, the new income belongs to the income exempted from CIT.

5. CIT-exempt incomes from vocational training exclusively for ethnic minorities, people with disabilities, children in extremely difficult circumstances, social evils, detoxifying people, the latter detoxification, HIV / AIDS infected people.

- Conditions to be counted in income that is exempt from CIT:

+ Vocational training institutions are established and operate in accordance with vocational training regulations.

+ There must be a list of trainees who are ethnic minorities, people with disabilities, children in extremely difficult circumstances, social evils, detoxifying people, people after detoxification, people infected with HIV / AIDS.

Note:

Where a vocational training institution has other subjects as well. Income exempted from CIT needs to be allocated, determined as follows:

CIT-exempt incomes = (ethnic minorities, people with disabilities, children in extremely difficult circumstances, social evils, detoxifying people, people after detoxification, HIV / AIDS / Total number of trainees) x Total income.

6. Income divided from capital contribution, share purchase, joint venture or economic association with domestic enterprises, after the party receiving capital contribution, issuing shares, joint venture or associate has paid CIT .

Including the parties receiving capital contribution, issuing stocks, joint ventures or associates are entitled to corporate income tax incentives.

7. The sponsorship is under CIT exempt income. If used for educational activities, scientific research, culture, art, charity, humanitarian and other social activities in Vietnam.

Note:

If the sponsorship is not used for the right purpose, the organization using it must calculate and pay CIT on the portion used for the wrong purpose during the period of misuse.

8. Income from transferring certificates of emission reduction (CERs) belongs to income tax exempted from CIT.
Note:

- This certificate must be certified by a competent environmental authority.

- Income tax exemption in this case is only applicable to the first time the certificate of deflation is released. In the next transfer times, pay normal corporate income tax.

9. Income tax-exempt incomes from performing the State-assigned tasks of the units according to the provisions of law.

If the units generate incomes other than those from revenue-generating activities assigned by the State. CIT on such revenues must be calculated and paid.

10. The undivided income part of the income is exempt from CIT.
- Undivided income of socialized institutions in the fields of education - training, health care and other socialization domains (including the Judicial Examination Office) left for investment in development Department according to the provisions of the specialized law on education - training, health and other socialization fields.

The above income is included in the CIT exempt amounts, excluding the cases where the unit leaves to invest in expanding other industries and business activities not in the fields of education - training, health care and other socialization sector.

- Undivided income of the cooperative left to form the cooperative's assets.

Note:

If the income is not divided, then it is divided or spent for the wrong purpose. The corporate income tax will be retrospectively collected at the tax rate at the time of division or misuse. At the same time, to be sanctioned for tax law violations according to regulations.

11. Incomes from technology transfer in priority domains transferred to organizations and individuals in geographical areas with extremely difficult socio-economic conditions belong to CIT-exempt incomes.

12. Income tax-exempt income from redundant office income during the pilot implementation in accordance with the law on civil judgment enforcement.
Except for income from activities other than redundancy.

Above are the incomes that are exempt from CIT. These 12 non-taxable income will be deducted when determining corporate income tax.

Related article: Income subject to CIT.

If you have questions about CIT and other taxes (VAT, PIT ..), please contact TASCO Tax Agent for a free consultation and service.

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