The Ministry of Finance recently issued guidelines to local tax departments regarding tax policies on preferential corporate income tax treatment for socialized enterprises.
The Ministry of Finance stated that the policy of encouraging establishments operating in the field of socialization is reflected in Decision No. 1466/QD-TTg dated October 10, 2008, of the Prime Minister on the detailed list of types, scale criteria, and standards of establishments implementing socialization in the fields of education and training, vocational training, health, culture, sports, and environment.
1. New tax incentives
Decision 693/QD-TTg dated May 6, 2013 amends and supplements some contents of the detailed list issued together with Decision 1466.
On July 22, 2016, the Prime Minister issued Decision No. 1470/QD-TTg amending and supplementing the detailed list issued with Decision 1466. Accordingly, the contents not amended or supplemented in Decision 1470 remain in effect. The amended contents will take effect from July 22, 2016.
2. Based on the legal documents on taxation, the Ministry of Finance provides guidance.
Socialized facilities established before the effective date of Decision 1470, if they do not meet the conditions (regarding the list of types, criteria, scale, and standards) in Decision 1466 and Decision 693 (old conditions) but meet the conditions in Decision 1470, will be entitled to corporate income tax incentives for the remaining period from July 22, 2016 (when Decision 1470 came into effect).
Establishments founded before July 22, 2016, that are currently enjoying corporate income tax incentives due to meeting the conditions of Decision 1466 and Decision 693 but do not meet the conditions of Decision 1470, will continue to enjoy tax incentives for income from socialized activities under the old conditions for the remaining period.
Establishments founded since the date of Decision 1470 that meet the conditions of this decision are entitled to corporate income tax incentives on income from socialized activities, starting from the date they meet the conditions of this decision. If the establishment does not meet the conditions of Decision 1470, income from socialized activities must be declared and taxed according to regulations.
Socialization facilities that do not meet the conditions of all three decisions above will not be entitled to tax incentives on income from socialization activities and must declare and pay taxes according to regulations.
There are some cases where establishments do not meet the conditions of the two previous decisions but do meet the conditions of Decision 1470; others do not meet the conditions of all three decisions. For these types of establishments, the corporate income tax that has not yet been collected according to Resolution No. 63/NQ-CP dated August 25, 2014 of the Government will be implemented according to the Government's regulations when there is an amended, supplemented, or replaced document.
Businesses implementing socialized services must separately determine income from socialized services to be eligible for corporate income tax incentives.
