CEO Bloggers - Markus Patrick Chan
Ph.D(Mgt) MBA(BankMgt) BBus(Finance) FChFP CICFP
A CEO is almost always the best single human asset a company has. Yet many businesses hide their top asset behind a marketing curtain. A short website bio, usually without contact information, makes most CEOs appear inaccessible. If your goal is to be a customer-facing and customer-focused organization, a CEO blog can create a public face for a company. Showcasing your company’s personality can go a long way toward defining your values.
Head of Academy
VNHK Academy of Leadership and Management
PLANNING TO SLASH CORPORATE
INCOME TAX FROM 22% TO 15% IN VIETNAM
Publish Date: 08/04/2018
Planning to slash corporate income tax rates from the current 22% to 15% in an effort to make Vietnam as one of the most tax-competitive economies in South East Asia.
Foreign investors considering the Vietnamese market are often drawn by its competitive costs. Vietnam’s low wages have traditionally provided these cost savings; however, the country has also quietly developed one of the most competitive tax regimes throughout Southeast Asia. Vietnam’s tax incentives are a standout feature of the tax regime and are applied to a variety of industries and projects throughout the country.
Vietnamese government continues to improve business conditions through reform and have included tax incentives in recent legislative updates – most notably Vietnam’s Law on Investment – to lower the cost of doing business within the country. Foreign investors, particularly those involved in slightly higher value-add production, should be able to use incentives to offset their temporary costs until regulatory reforms take hold, and to position themselves ahead of their competitors in the years ahead.
Tax Incentives for Foreign Investment
Vietnam’s Law on Investment specifies three forms of incentives that are available to companies operating within the country.
The following incentives are listed under Section 1, Article 15.1:
Application of a lower rate of corporate income tax for a certain period of time or throughout the project execution;
Exemption or reduction of import tax on goods imported as fixed assets on raw materials, supplies, and parts used for the project;
An exemption, reduction of land rents and land levy.
Preferential rates : The different preferential rates include:
10 percent for the lifetime of the entire project;
10 percent for 15 years from the first year of income generation;
17 percent for the lifetime of the entire project;
17 percent for 10 years from the first year of income generation.
Tax holidays and tax exemptions include:
Tax exemption for 4 years, 50 percent reduction of payable tax amounts for 9 subsequent years;
Tax exemption for 4 years, 50 percent reduction of payable tax amounts for 5 subsequent years;
Tax exemption for 2 years, 50 percent reduction of payable tax amount for 4 subsequent years.
Vietnam’s Law on Investment, as well as its subsequent decrees and circulars, specify in the types of projects that qualify for incentives and the nature of incentives that these projects qualify for. The most common incentives are those available for investments made in specialized locations, industries, or investment zones in the country.
Tax-Incentives for prioritized industries
Vietnam extends investment incentives to a number of industries and projects that it has identified to be of strategic importance for the country. Vietnamese policy in recent years has broadly promoted projects in high tech industries, large capital, or labor-intensive investments, and projects that are expected to have a tangible impact on social conditions, such as education or healthcare.
Tax-Incentives in economic zones
Vietnam has encouraged the establishment of economic zones throughout the country. These zones provide increased access to infrastructure, pools of talent, and networks of suppliers. Foreign investors in these zones also benefit from tax incentives extended by the Vietnamese government.
Most economic zones will qualify an investor for tax holiday incentives. In limited cases, where the zone is located in a disadvantaged area, a preferential rate of corporate income tax will also apply. Foreign investors must set up their operations inside of a zone that offers incentives in order to qualify for preferential treatment or tax holidays.
Vietnam’s economic zones are a common entry point for a variety of firms. Firms in need of specialized labor, easy access to ports, and good business conditions should strongly consider setting their operations up within one of Vietnam’s industrial zones.
By quoting the words of Mr. Nguyen Xuan Phuc , the Prime Minister of Vietnam
The Prime Minister announced the plans of Tax-cut & Tax-incentive in a speech at the GMS Business Summit held in Hanoi last week.
He reiterated Vietnam’s commitment to an action-oriented government working in the interest of the people and businesses, for which tax reform is one of the crucial undertakings in its efforts to enhance the country’s competitiveness.
Also said that his government would focus on creating a favourable business environment by fine-tuning the institutions and legal frameworks, improving the administration capacity to bring equal opportunities for all economic sectors.
He also affirmed Vietnam’s commitment to protect intellectual property rights and innovative ideas during the start-up process.
The Prime Minister stated that these improvements have boosted the confidence of foreign investors and businesses in the Government’s reform efforts and inspired the Government to continue its reform programme.
Conclusion and we can help you.
In Vietnam, whether you are venturing into new markets, services or product lines, understanding trends, market potential and the socio-political climate are key to the success of your business. The challenge, however, lies in making sense of the information available and the impact of evolving developments on your business.We speak your language and appreciate your business challenges. Our professionals bring to every engagement with you their breadth of experience and depth of expertise.
By leveraging our knowledge, skills and experience,
you gain insights and access to resources that can help transform your business - whether driving revenue growth, redefining customer service or achieving cost efficiencies
you can more effectively manage and develop your business plans , investment plans, trading plans and M&A plans we develop for you.
tapping into our wealth of industry and market insights, we cut through complexity to home in on the real issues.
We develop plans not just to support your business needs today, but where you want to be in the future.
Should there be any questions , please freely contact Dr. Markus Chan
Tax Incentive in Vietnam ( 2018 Feb Version ) researched by VNHK Academy
Please be aware that information provided by this blog is subject to change. We recommend that you do not take any information held within as a definitive guide to the law or the relevant matter being discussed. You are advised to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.
Due to the nature of the matters discussed on this blog, the information contained within it and any pages linked to from it are clearly subject to change, without warning. The law, regulations and other forms of legal governance are constantly changing and adapting to meet the needs of the modern world and it is impossible to comprehensively detail the nature of such within the confines of a blog in a concise, up-to-date manner.
Any opinions expressed within the blog are those of the author and not necessarily held by ASIA CEO COMMUNITY itself. For the most up to date information, prices, offers and more offered by ASIA CEO COMMUNITY, please visit our website or contact a member of our team on +852 2193 5057.
Guest Blog Disclaimer
From time-to-time we have guest bloggers post on our site.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of ASIA CEO COMMUNITY LIMITED. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.