Thông tư 199/2012/TT-BTC

CIRCULAR

GUIDING IMPLEMENTATION OF THE GOVERNMENT’S DECREE NO. 122/2011/ND-CP OF DECEMBER 27, 2011, ON CHANGE OF THE ENTERPRISE INCOME TAX INCENTIVES FOR ENTERPRISES BEING ENJOYED THE ENTERPRISE INCOME TAX INCENTIVES BY MEETING THE CONDITIONS FOR INCENTIVES ON THE EXPORT RATE WHICH ARE TERMINATED DUE TO THE IMPLEMENTATION OF WTO COMMITMENT.

Pursuant to the Law on Tax administration No. 78/2006/QH11, of November 29, 2006 and documents guiding implementation;

Pursuant to the Law on Enterprise income tax No. 14/2008/QH12 of June 03, 2008;

Pursuant to the Government’s Decree No. 122/2011/ND-CP of December 27, 2011, amending and supplementing a number of articles of the Government’s Decree No. 124/2008/ND-CP detailing and guiding implementation of a number of articles of the Law on Enterprise income tax;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of Director General of General Department of Taxation;

The Minister of Finance promulgates Circular guiding on change of enterprise income tax incentives as follows:

Article 1. Scope of regulation

This Circular guides change of enterprise income tax incentives as prescribed in clause 2, Article 2 of the Decree No. 122/2011/ND-CP for enterprises being enjoyed the enterprise income tax incentives by meeting the conditions on the export rate (except enterprises meeting conditions on the export rate for textile and garment) which are terminated the enterprise income tax incentives by meeting the conditions on the export rate due to the implementation of WTO commitment.

Article 2. Principles of selection when changing the enterprise income tax incentives

1. Enterprises, which had been granted investment licenses, certificates of Business registration, certificates of investment before the day the Socialist Republic of Vietnam becomes official member of the World Trade Organization (January 11, 2007) and having turnover from business activities during time being enjoyed the enterprise income tax incentives by meeting the conditions on the export rate as prescribed in legal documents on foreign investment in Vietnam, on domestic investment promotions, on enterprise income tax, may continue enjoying the enterprise income tax incentives as prescribed in these legal documents until ending 2011.

2. Enterprises during time being enjoyed the enterprise income tax incentives by meeting the conditions for incentives on the export rate which are terminated the enterprise income tax incentives by meeting the conditions on the export rate due to the implementation of WTO commitment, as from 2012, are entitled to select to continue enjoying the enterprise income tax incentives for the remaining preferential duration corresponding to the actual conditions of enterprises meeting the investment incentives (except conditions for incentives by meeting the conditions on the export rate), specifying as follows:

- Being entitled to select to continue enjoying enterprise income tax incentives for the remaining duration corresponding to the actual conditions of the enterprises meeting the investment incentives as stipulated in the legal documents on enterprise income tax which have taken effect in the period of between the date of the enterprises to be licensed for establishment and before the effective date of the Government’s Decree No.24/2007/ND-CP dated February 14, 2007 detailing the implementation of enterprise income tax law (in according to legal documents on enterprise income tax in time of between the tax calculation period of 2006 and prior-2006 time when enterprises are licensed for establishment).

- Or being entitled to select to continue enjoying enterprise income tax incentives for the remaining duration corresponding to the actual conditions of the enterprises meeting the investment incentives as stipulated in the legal documents on enterprise income tax which have taken effect at time of being adjusted tax incentives due to implementation of WTO commitment (in according to legal documents on enterprise income tax applicable to the tax calculation period of 2012).

3. Selection of changing the enterprise income tax incentives for the remaining duration mentioned above must ensure the following principles:

- Till 2012, enterprises during time being applied the preferential tax rates of enterprise income tax by meeting the conditions for incentives on the export rate which are terminated the enterprise income tax incentives due to the implementation of WTO commitment, are entitled to change incentives on tax rates in accordance with guides in this Circular. If till 2012, enterprises have no longer been applied the preferential tax rates of enterprise income tax, they shall be not entitled to change incentives on tax rates.

- Till 2012, enterprises during time being exempted or reduced enterprise income tax by meeting the conditions for incentives on the export rate which are terminated the enterprise income tax incentives due to the implementation of WTO commitment, are entitled to change incentives on time of tax exemption or tax reduction in accordance with guides in this Circular. If till 2012, time being exempted or reduced the enterprise income tax was ended, they are not entitled to change incentives on time of tax exemption or tax reduction.

Article 3. Methods of selection to change the enterprise income tax incentives

1. Enterprises, which are still in time to apply the preferential tax rate and in time of exemption, reduction of the enterprise income tax, are entitled to select to continue enjoying enterprise income tax incentives for the remaining preferential duration corresponding to the actual conditions of the enterprises meeting the investment incentives (except conditions for incentives by meeting conditions on export rate) as stipulated in the legal documents on enterprise income tax in the period of between the date of the enterprises to be licensed for establishment and before the effective date of the Government’s Decree No.24/2007/ND-CP or in according to legal documents on enterprise income tax at time of being adjusted tax incentives due to implementation of WTO commitment).

In case enterprises, which are still in time to apply the preferential tax rate and in time of exemption, reduction of the enterprise income tax, select to change incentives into other conditions for incentives (except conditions for incentives by meeting conditions on export rate), when they change incentives on tax rates and time of tax exemption, tax reduction for the remaining time, they must comply with provisions of legal documents at a selected time by them.

2. Enterprises, which are still in time to apply the preferential tax rates but have ended time of tax exemption, tax reduction, are entitled to select change to apply the preferential tax rates for the remaining duration corresponding to the actual conditions of the enterprises meeting the incentives (except conditions for incentives by meeting on export rate) as stipulated in the legal documents on enterprise income tax in the period of between the date of the enterprises to be licensed for establishment and before the effective date of the Government’s Decree No.24/2007/ND-CP or in according to legal documents on enterprise income tax at time of being adjusted tax incentives due to implementation of WTO commitment).

3. Enterprises, which are still in time of tax exemption, tax reduction but have ended time of application of the preferential tax rates, are entitled to select change to apply incentives on time of tax exemption, tax reduction for the remaining duration corresponding to the actual conditions of the enterprises meeting the incentives (except conditions on export rate) as stipulated in the legal documents on enterprise income tax in the period of between the date of the enterprises to be licensed for establishment and before the effective date of the Government’s Decree No.24/2007/ND-CP or in according to legal documents on enterprise income tax at time of being adjusted tax incentives due to implementation of WTO commitment).

In case enterprises are in time of tax exemption, tax reduction or have been ended time of tax exemption, but still in time of tax reduction, and when changing incentives, if number of years being exempted the enterprise income tax by meeting conditions on export rate exceeds number of years being exempted in according to plan on selection for change by meeting other conditions for incentives (except conditions for incentives by meeting the export rate), each 01 year being exempted the enterprise income tax which exceed, they shall be deducted 02 years enjoyed reduction of 50% of the enterprise income tax.

If till 2012, enterprises have not yet been enjoyed incentives of exemption, reduction of the enterprise income tax for export rate because they have not yet had taxable turnover: In case enterprises have not yet had the taxable turnover for 3 first years, from the first year they have turnover, time of tax exemption, tax reduction shall be calculated from the fourth year getting turnover. Change of incentives for the remaining duration shall be implemented in according to the principles mentioned above.

4. In case enterprises during time being enjoyed the enterprise income tax incentives by investment expansion but being terminated the enterprise income tax incentives by conditions for incentives on export rate, they are allowed to select to continue being enjoyed the enterprise income tax incentives for the remaining duration corresponding to the actual conditions of the enterprises meeting the investment incentives by expansion (except conditions for incentives by meeting the conditions on the export rate) at time licensed for investment expansion or at time when expansion investment project being put in business and production operation (in cases not been licensed for expansion investment).

5. A few of specific cases are guided as follows:

a) For enterprises being enjoyed incentives by conditions on export rate (not including export processing enterprises).

Example 1:

Enterprise A was established in 1988, being enterprise with 100% foreign capital, operating production for exports, meeting conditions on investment incentives: Investment project in 5 first years complied with the Law on investment; project of export at least 80% of products. Under the Establishment permit, Enterprise A is enjoyed the profit tax incentives (the enterprise income tax): The tax rate of Profit tax is 15% during implementation of project, exempted profit tax for 2 years, reduced 50% of profit tax in 2 next years. Enterprise began arising taxable turnover from 2001. Enterprise enjoyed tax incentives: Exemption of the enterprise income tax for 2 year: 2001 and 2002, reduction of 50% of the enterprise income tax for 2 next years: 2003 and 2004.

From the enterprise income tax period of 2012, the enterprise income tax incentives by meeting conditions on export are terminated: If enterprise A was enjoyed all time of exemption, reduction of the enterprise income tax by meeting conditions on export rate, and enjoyed only the enterprise income tax incentive on tax rate of 15% by meeting conditions on export rate, from 2012, enterprise A must terminate the enterprise income tax incentive on tax rate of 15% by meeting conditions on export rate. The incentives on tax rate of enterprise income tax which enterprise may select by meeting conditions for enterprise income tax incentives other than meeting conditions on export rate, in order to notify with tax agencies for application since 2012:

a) At time of being licensed for establishment – the Decree No. 139-HDBT, of September 05, 1988 of the Council of Minister (time of grant for investment license): If cut down condition on export project with at least 80% products for export, enterprise A will just meet 1 condition as prescribed in clause 2 Article 37 of the Decree No. 139-HDBT (investment project in 5 first years of implementation of the Law on investment), therefore it not subject to be prioritized, it is common case, its tax rate of enterprise income tax being applied will be 21% for the remaining time of project.

b) In according to the Decree No. 28-HDBT, of December 06, 1991 of the Council of Ministers: Enterprise A just meets 1 condition: Enterprise meets condition on investment project in 5 first years of implementation of the Law on investment, enterprise is common case, the tax rate of enterprise income tax applied will be 21% for the remaining time of project.

c) In according to the Decree No.18/CP, of April 16, 1993, the Decree No. 12/CP, of February 18, 1997, the Decree No. 24/2000/ND-CP, of July 31, 2000, the Decree No. 27/2003/ND-CP of March 19, 2003, of the Government: Enterprise A failed to meet conditions of investment incentives, the common tax rate of enterprise income tax applied will be 21% for the remaining time of project.

d) In according to the Decree No. 164/2003/ND-CP of December 22, 2003, Decree No. 152/2004/ND-CP of August 06, 2004: Enterprise A failed to meet conditions of investment incentives, applied the common tax rate of enterprise income tax of 28%; from 2009, applied the common tax rate of enterprise income tax of 25% as prescribed in the Government's Decree No. 124/2008/ND-CP of December 11, 2008, for the remaining time of project.

e) At time of termination of export incentives due to acceding WTO - the Government’s Decree No. 122/2011/ND-CP of December 27, 2011: Enterprise A failed to meet conditions of investment incentives, the common tax rate of enterprise income tax applied will be 25% for the remaining time of project.

Therefore enterprise A is entitled to select under points a, b, c, d, e stated above in which the most advantage plan is selection of time stated in point a and point b: Applied the tax rate of enterprise income tax of 21% from 2012 for the remaining time of project, in according to the Decree No. 139-HDBT, of September 05, 1999 or the Decree No. 28-HDBT, of December 06, 1991 of the Council of Ministers.

Example 2:

Enterprise B was established on April 16, 1993, with activities of export production, meeting conditions for investment incentives: Investment project employing from 500 laborers or more; project of export at least 80% products. Under the Establishment permit, Enterprise B is enjoyed the profit tax incentives (the enterprise income tax): The tax rate of Profit tax is 20% during implementation of project, exempted profit tax for 2 years, reduced 50% of profit tax in 3 next years. Enterprise began arising taxable turnover from 2003. Enterprise enjoyed tax incentives: Exemption of the enterprise income tax for 2 year: 2003 and 2004, reduction of 50% of the enterprise income tax for 3 next years: 2005, 2006 and 2007.

From the enterprise income tax period of 2012, the enterprise income tax incentives by meeting conditions on export are terminated: If enterprise B was enjoyed all time of exemption, reduction of the enterprise income tax by meeting conditions on export rate, and enjoyed only the enterprise income tax incentive on tax rate of 20% by meeting conditions on export rate, from 2012, enterprise B must terminate the enterprise income tax incentive on tax rate of 20% by meeting conditions on export rate. The incentives on tax rate of enterprise income tax which enterprise may select by meeting conditions for enterprise income tax incentives other than meeting conditions on export rate, in order to notify with tax agencies for application since 2012:

a) At time of being licensed for establishment – the Government’s Decree No. 18/CP, of April 16, 1993: If cut down condition on export incentives, enterprise B will just meet condition on employing 500 laborers or more: Enterprise B will fail to meet conditions of investment incentives, it must apply the common tax rate of enterprise income tax of 25% for the remaining time of project.

b) In according to the Government’s Decree No. 12/CP, of February 18, 1997: Enterprise B, by meeting preferential conditions on employing 500 laborers or more, is applied tax rate of the enterprise income tax of 20% during 10 years from 1993 (establishment day of enterprise), by 2012 ended preferential time of tax rate, it must apply the common tax rate of enterprise income tax of 25% for the remaining time of project.

c) In according to the Decree No. 24/2000/ND-CP of July 31, 2000, the Decree No. 27/2003/ND-CP of March 19, 2003, of the Government: Enterprise B failed to meet conditions of investment incentives, it must apply the common tax rate of enterprise income tax of 25% for the remaining time of project.

d) In according to the Decree No. 108/2006/ND-CP of September 22, 2006, projects employing regularly of between 500 laborers and 5000 laborers is in the list of preferential investment fields. In according to the Decree No. 164/2003/ND-CP established-newly business facilities from investment projects in preferential investment fields are applied the tax rate of enterprise income tax of 20% during 10 years. Enterprise B, by meeting conditions on employing 500 laborers or more, is applied tax rate of the enterprise income tax of 20% during 10 years from 1993, by 2012 the preferential time of tax rate is endeded, it must apply the common tax rate of enterprise income tax of 25% for the remaining time of project.

e) At time of export incentive termination due to acceding WTO: The Government’s Decree No.122/2011/ND-CP of December 27, 2011: Enterprise B failed to meet conditions of investment incentives, it must apply the common tax rate of enterprise income tax of 25%.

Therefore enterprise B is entitled to select under points a, b, c, d, e stated above. Under the time stated above, Enterprise B ended time of being enjoyed the enterprise income tax incentives; it must apply the common tax rate of enterprise income tax of 25% from 2012 for the remaining time of project.

Example 3:

Enterprise C was established on January 01, 2003, with activities of export production, meeting conditions for investment incentives: Investment project in industrial zones; project of export at least 80% of products. Under the Establishment permit, Enterprise is enjoyed the enterprise income tax incentives: Being applied the tax rate of enterprise income tax of 10% during implementation of project, exempted enterprise income tax for 4 years, reduced 50% of enterprise income tax in 4 next years. Enterprise C began arising taxable turnover from 2006, for ending of 2011, Enterprise C enjoyed incentives: Exemption of enterprise income tax for 4 years, of from 2006 to the ending of 2009, reduction of enterprise income tax of 2010, 2011; since 2012, terminated incentives due to WTO commitment, therefore enterprise C is not entitled to reduce 50% of the enterprise income tax for 02 remaining years and not entitled to continue enjoying tax rate of enterprise income tax of 10%.

The incentives on exemption, reduction and tax rate of enterprise income tax which enterprise may select by meeting conditions for enterprise income tax incentives other than meeting conditions on export, in order to notify with tax agencies for application since 2012:

a) At time of being licensed for establishment – the Government’s Decree No. 24/2000/ND-CP of July 31, 2000: Enterprise, by meeting conditions being the production project in industrial zones is enjoyed incentives: Exemption of the enterprise income tax for 1 year: 2006, reduction of 50% of the enterprise income tax for 2 next years: 2007 and 2008; application of tax rate of enterprise income tax of 20% for the remaining duration of the project.

b) In according to the Government’s Decree No. 27/2003/ND-CP of March 19, 2003: Enterprise, by meeting conditions being the production project in industrial zones is enjoyed incentives: Exemption of the enterprise income tax for 2 year: 2006 and 2007, reduction of 50% of the enterprise income tax for 3 next years: 2008, 2009 and 2010; application of tax rate of enterprise income tax of 15% for the remaining duration of the project.

c) In according to the Decree No. 152/2004/ND-CP: Based on the condition on production in industrial zones, enterprise is enjoyed the enterprise income tax incentives, which include exemption for 3 years, reduction of 50% of enterprise income tax for 7 next years. By 2012, because enterprise C has been exempted tax for 4 years: from 2006 to the ending of 2009, reduced 50% in 2010, 2011; enterprise C has been exempted tax in excess 1 year, 1 year exempted tax of enterprise shall be deducted by 2 years reduced 50%. Therefore, by 2012, enterprise remains 3 years reduced 50% (7 years deducted by 2 years reduced and 1 year exempted in excess equal to 2 years of reduction).

On tax rate of enterprise income tax: In according to the Decree No. 152/2004/ND-CP Enterprise, which meets conditions on production in industrial zones, is applied the tax rate of enterprise income tax of 15% during 12 years (from 2003 to 2014); from 2015, is applied the common tax rate of enterprise income tax of 25% for the remaining time of project.

d) At time of export incentive termination due to acceding WTO: The Government’s Decree No.122/2011/ND-CP of December 27, 2011: Enterprise C failed to meet conditions of investment incentives, it must apply the common tax rate of enterprise income tax of 25%.

Therefore enterprise C is entitled to select under points a, b, c, d, e stated above in which the advantage plan is selection of time stated in point b or point c for application since 2012:

+ Incentives in according to the Government’s Decree No. 27/2003/ND-CP: Termination of incentives for tax exemption, tax reduction from 2012; application of tax rate of the enterprise income tax of 15% for the remaining time of project.

Or:

+ Incentives for exemption, reduction of enterprise income tax in according to the Government’s Decree No. 152/2004/ND-CP: Reduction of 50% in 3 years from 2012 to 2014; application of tax rate of the enterprise income tax of 15% from 2012 to 2014.

Example 4:

Enterprise D was established on January 07, 2004 in locality with socio-economic difficulties, business trades: Production of exports over 50% of products, Enterprise began arising taxable turnover from 2005.

In according to the Government's Decree No. 164/2003/ND-CP of December 22, 2003, enterprise meets conditions on business trades specified in the List A (export project attaining value over 50% of total value of goods from business and production of project in the financial year) of Annex promulgated together with the Decree No. 164/2003/ND-CP and enterprise is placed in localities specified in the List B of Annex promulgated together with the Decree No. 164/2003/ND-CP enterprise is enjoyed incentives: Application of tax rate of the enterprise income tax of 15% in 12 years from 2004 to 2015, enjoying incentive on exemption of enterprise income tax for 3 years: 2005, 2006 and 2007, being reduced 50% of enterprise income tax for 7 years: from 2008 to the ending of 2014.

From the enterprise income tax period of 2012, incentives for export are terminated: Enterprise is still in time being reduced and applied the preferential tax rate, therefore it shall be terminated incentives on time of tax reduction and time of application of preferential tax rate by meeting export rate. The enterprise income tax incentives which enterprise may select by meeting conditions for enterprise income tax incentives other than condition on export rate in order to notify with tax agencies for application since 2012:

a) At time of being licensed for establishment – the Government’s Decree No. 164/2003/ND-CP of December 22, 2003: Cutting down condition on export project, enterprise which meets conditions of being project in locality with socio-economic difficulties, is applied the tax rate of enterprise income tax of 20% for 10 years, from 2004 to the ending of 2013, is enjoyed incentive of tax exemption for 2 years (2005 and 2006), reduced 50% of enterprise income tax for 6 years (from 2007 to the ending of 2012). By the ending of 2011, enterprise has enjoyed incentive of tax exemption for 3 years: From 2005 to the ending 2007 (exempted tax in excess 1 year, 1 year exempted tax of enterprise shall be deducted by 2 years reduced 50%). Thus enterprise is enjoyed incentive of reduction of 50% in 4 years: from 2008 to the ending of 2011, by 2012, incentives of tax exemption, tax reduction are no longer.

b) At time of export incentive termination due to acceding WTO: The Government’s Decree No.122/2011/ND-CP of December 27, 2011: Enterprise which meets condition of newly-established enterprise from investment project in locality with socio-economic difficulties, is applied the tax rate of enterprise income tax of 20% for 10 years, from 2004 to the ending of 2013, enjoyed incentive of tax exemption for 2 years (2005 and 2006), reduced 50% of enterprise income tax for 4 years (from 2007 to the ending of 2010).

Therefore enterprise D is entitled to select under points a, b stated above in which the advantage plan is selection of time stated in point a: Application of the tax rate of enterprise income tax of 20% in 2012 and 2013 in according to the Government’s Decree No. 164/2003/ND-CP of December 22, 2003, from 2014, application of common tax rate of 25%; from 2012, ending time of tax exemption, tax reduction.

Example 5:

Enterprise E is established on January 07, 2004, with activities of export production, meeting conditions for investment incentives: The project on export of over 50% of products. Enterprise E is enjoyed the enterprise income tax incentives: In according to the Decree No. 164/2003/ND-CP enterprise is applied the tax rate of enterprise income tax of 20% during 10 years, exempted enterprise income tax for 2 years, reduced 50% of enterprise income tax in 3 next years. Enterprise began arising taxable turnover from 2004. Enterprise E enjoyed tax incentives: Exemption of the enterprise income tax for 2 year: 2004 and 2005, reduction of 50% of the enterprise income tax for 3 next years: from 2006 to the ending of 2008.

From the enterprise income tax period of 2012, incentives for export are terminated, enterprise was enjoyed all time of exemption, reduction for the enterprise income tax by meeting conditions on export, and enjoyed only time of application of tax rate of enterprise income tax of 20%, and therefore, enterprise shall be terminated incentives of tax rate of enterprise income tax of 20%. The incentives on tax rate of enterprise income tax which enterprise may select by meeting conditions for enterprise income tax incentives other than meeting conditions on export rate, in order to notify with tax agencies for application since 2012:

a) At time of being licensed for establishment – the Decree No. 164/2003/ND-CP of December 22, 2003: cutting down preferential condition by meeting export rate, enterprise fails to meet other conditions of investment incentives, and therefore, it must apply the tax rate of enterprise income tax of 28%; from 2009, applying the common tax rate of enterprise income tax of 25% as prescribed in the Government’s Decree No. 124/2008/ND-CP of December 11, 2008, for the remaining time of project.

b) At time of export incentive termination due to acceding WTO: The Government’s Decree No.122/2011/ND-CP of December 27, 2011: Enterprise fails to meet other conditions of investment incentives, it must apply the common tax rate of enterprise income tax of 25% for the remaining time of project.

Therefore enterprise E is entitled to select under points a, b stated above. Under the times stated above, Enterprise E ended time being enjoyed the enterprise income tax incentives, it must change to apply the common tax rate of enterprise income tax of 25% from 2012 for the remaining time of project.

b) For export processing enterprises operating in export processing zones, industrial zones.

Example 6:

The export processing enterprise G is an enterprise with 100% of foreign capital, established on October 18, 1991, operating production for exports. Under the Establishment permit, Enterprise G, being enjoyed the profit tax incentives (the enterprise income tax): the tax rate of enterprise income tax is 10% during implementation of project, being exempted enterprise income tax for 4 years. Enterprise began arising taxable turnover from 1994. Enterprise G has been enjoyed tax incentives: Exemption of the enterprise income tax for 4 year: from 1994 to the ending of 1997.

From the enterprise income tax period of 2012, incentives by meeting the export rate are terminated: Enterprise was enjoyed all time of exemption, reduction for the enterprise income tax, and has only time of application of preferential tax rate, and therefore, enterprise shall be terminated incentives in application of tax rate of enterprise income tax of 10% by meeting the export rate. The incentives on tax rate of enterprise income tax which enterprise may select by meeting conditions for enterprise income tax incentives other than meeting conditions on export rate, in order to notify with tax agencies for application since 2012:

a) At time of being licensed for establishment – In according to the Decree No. 28-HDBT, of December 06, 1991 of the Council of Minister: Enterprise G just meets 1 condition: Investment project in 5 first years of implementation of the Law on investment, the tax rate of enterprise income tax applied will be 21% for the remaining time of project.

b) In according to the Decree No. 18/CP, of April 16, 1993: Enterprise G fails to meet conditions of investment incentives, it is applied the common tax rate of enterprise income tax of 25% for the remaining duration of project.

c) In according to the Government’s Decree No. 129/CP, of December 28, 1994: If cutting down condition on export incentives, Enterprise G has only condition on project on production in industrial zones: Enterprise G is enjoyed incentives to apply the tax rate of enterprise income tax of 18% for the remaining time of project.

d) In according to the Government’s Decree No. 36/CP, of April 24, 1997: If cutting down condition on export incentives, Enterprise G has only condition on project on production in industrial zones: Enterprise G is enjoyed incentives to apply the tax rate of enterprise income tax of 15% for the remaining time of project.

e) In according to the Government’s Decree No. 27/2003/ND-CP of March 19, 2003: Enterprise which meets condition of project on production in industrial zones, is applied the tax rate of enterprise income tax of 15% for the remaining time of project.

g) In according to the Decree No.164/2003/ND-CP of December 22, 2003, Decree No.152/2004/ND-CP of August 06, 2004: Enterprise which meet conditions being project on production in industrial zones, is applied tax rate of the enterprise income tax of 15% during 12 years from1991 to 2002, from 2003, the time of tax rate incentives is ended, it must apply the common tax rate of enterprise income tax for the remaining time of project.

h) At time of export incentive termination due to acceding WTO: The Government’s Decree No.122/2011/ND-CP of December 27, 2011: Enterprise G fails to meet conditions of investment incentives, it must apply the common tax rate of enterprise income tax of 25%.

Therefore enterprise G is entitled to select under points a, b, c, d, e, g, h stated above in which the advantage plan is selection of time stated in points d, e: Applied the tax rate of enterprise income tax of 15% from 2012 for the remaining time of project, in according to the Decree No. 36/CP, of April 24, 1997, or in according to the Decree No. 27/2003/ND-CP

Example 7:

The export processing enterprise H is established on August 01, 2000, operating production for exports. Under the Establishment permit, Enterprise H is enjoyed the enterprise income tax incentives: Being applied the tax rate of enterprise income tax of 10% during implementation of project, exempted enterprise income tax for 4 years, reduced 50% of enterprise income tax in 4 next years. Enterprise began arising taxable turnover from 2004. Enterprise H has been enjoyed tax incentives: Exemption of the enterprise income tax for 4 years: from 2004 to the ending of 2007, reduction of 50% of the enterprise income tax for 4 next years: from 2008 to the ending of 2011.

From the enterprise income tax period of 2012, incentives for export are terminated: Enterprise was enjoyed all time of exemption, reduction for the enterprise income tax, and has only time of application of preferential tax rate, and therefore, enterprise shall be terminated incentives in application of tax rate of enterprise income tax of 10% by meeting the export rate. The incentives on tax rate of enterprise income tax which enterprise may select by meeting conditions for enterprise income tax incentives other than meeting conditions on export rate, in order to notify with tax agencies for application since 2012:

a) At time of being licensed for establishment – the Government’s Decree No. 24/2000/ND-CP of July 31, 2000: Enterprise which meets condition of project on production in industrial zones, is applied the tax rate of enterprise income tax of 20% for the remaining time of project.

b) In according to the Government’s Decree No. 27/2003/ND-CP of March 19, 2003: Enterprise which meets condition being project on production in industrial zones, is applied the tax rate of enterprise income tax of 15% for the remaining time of project.

c) In according to the Decree No.164/2003/ND-CP of December 22, 2003, Decree No.152/2004/ND-CP of August 06, 2004: Enterprise which meet conditions being project on production in industrial zones, is enjoyed incentives to apply tax rate of the enterprise income tax of 15% during 12 years from 2000 to the ending of 2011, from 2012, it must apply the common tax rate of enterprise income tax of 25%.

d) At time of export incentive termination due to acceding WTO: The Government’s Decree No.122/2011/ND-CP of December 27, 2011: Enterprise H fails to meet conditions of investment incentives, it must apply the common tax rate of enterprise income tax of 25%.

Therefore enterprise H is entitled to select under points a, b, c, d stated above in which the advantage plan is selection of time stated in point b: Applied the tax rate of enterprise income tax of 15% from 2012 for the remaining time of project, in according to the Government’s Decree No. 27/2003/ND-CP of March 19, 2003.

c) For cases of the export processing enterprises not operating in the export processing zones, industrial zones.

Example 8:

The export processing enterprise K was established in 2003, with operation of business and production of exports, the annual average number of laborers used is 6000 laborers. Under the establishment permit, enterprise K is enjoyed the preferential tax rate of enterprise income tax of 10% during implementation of project, exempted enterprise income tax in 4 years from year of arising turnover, reduced 50% of payable enterprise income tax in 4 next years. Enterprise began arising taxable turnover from 2003. Enterprise K has been enjoyed tax incentives for exemption of enterprise income tax in 4 years: from 2003 to the ending of 2006; reduction of 50% of enterprise income tax from 2007 to the ending of 2010.

From the enterprise income tax period of 2012, the enterprise income tax incentives by meeting conditions on export rate are terminated: Enterprise was enjoyed all time of exemption for the enterprise income tax, and therefore, enterprise shall be terminated incentives for time limit of application of tax rate of enterprise income tax of 10%.

The incentives on tax rate of enterprise income tax which enterprise may select by meeting conditions for enterprise income tax incentives other than meeting conditions on export rate, in order to notify with tax agencies for application since 2012:

a) At time of being licensed for establishment – the Government’s Decree No. 27/2003/ND-CP of March 19, 2003: Enterprise fails to meet conditions of incentives for tax rate of enterprise income tax, it must apply the tax rate of enterprise income tax of 25% for the remaining time of project.

b) In according to the Decree No. 108/2006/ND-CP of September 22, 2006, projects employing regularly of 5000 laborers or more is in the list of special preferential investment fields. In according to the Decree No. 164/2003/ND-CP established-newly business facilities from investment projects in preferential investment fields are applied the tax rate of enterprise income tax of 20% during 10 years. Enterprise K which meets conditions of employing 5000 laborers or more, is applied tax rate of the enterprise income tax of 20% during 10 years from 1993 to the ending of 2012, by 2013, it must apply the common tax rate of enterprise income tax of 25% for the remaining time of project.

c) At time of export incentive termination due to acceding WTO: The Government's Decree No. 122/2011/ND-CP of December 27, 2011, because Enterprise K fails to meet conditions of investment incentives; it must apply the common tax rate of enterprise income tax of 25%.

Therefore enterprise K is entitled to select under points a, b, c stated above in which the advantage plan is selection of time stated in point b: In 2012, application of tax rate of the enterprise income tax of 20%, from 2013, application of common tax rate of the enterprise income tax of 25%.

d) For enterprises being enjoyed the enterprise income tax incentives by investment in expansion.

Example 9:

Enterprise L is established on May 02, 1997; on April 01, 2005, enterprise is permitted to implement project on investment in production expansion (project under trades, fields A and condition of project with the export level attaining over 50% and implemented in locality of C list), project is exempted tax for 04 years and reduced 50% of payable tax amounts in 07 next years. The project has finished and begun to put into business and production from 2006, Enterprise was enjoyed incentives for the income part from the project on investment in expansion as follows: Being exempted enterprise income tax for 04 years (from 2006 to the ending of 2009), and reduced 50% of enterprise income tax in 02 next years (from 2010 to the ending of 2011).

From the enterprise income tax period of 2012, the enterprise income tax incentives by meeting conditions on export rate are terminated.

a) At time of project on investment in expansion beginning to put into business and production: In according to Article 38 of the Decree No. 164/2003/ND-CP of December 22, 2003: If cutting down conditions on incentives for project under trades, fields A and project with the export level attaining over 50%, the project meets only condition on investment in locality under the C List, is enjoyed incentives for investment in expansion including tax exemption of 1 year in 2006, reduction of 50% of enterprise income tax for 2 years in 2007 and 2008. Enterprise has been exempted for 4 years and reduced 50% for 2 years, from 2012, enterprise end time enjoying incentives of exemption, reduction of enterprise income tax for project on investment in expansion.

b) At time of export incentive termination due to acceding WTO: In according to the Government’s Decree No.122/2011/ND-CP of December 27, 2011, projects on investment in expansion are not enjoyed investment incentives.

Therefore enterprise L is entitled to select under points a, b stated above. Under the times stated above, from 2012, Enterprise L ended time being enjoyed the enterprise income tax incentives for project on investment in expansion; it is no longer enjoyed the enterprise income tax incentives.

Article 4. Procedures for change of incentives

Enterprises shall notify for direct management tax agencies on their selection in plan enjoying tax incentives in according to Annex No. 01 promulgated together with this Circular.

Time limit to send written notice to the tax agencies is time limit of submission of declaration on settlement of enterprise income tax of 2012 as prescribed.

If enterprises have declared to enjoy the enterprise tax income incentives (including notified with tax agencies) but the incentive level selected for change is lower than the incentive level stipulated in this Circular or is not conformable with selections to change incentives as prescribed in this Circular, they are entitled to declare for adjustments and supplementations as prescribed in the Law on Tax administration and documents guiding on implementation of Tax administration, and they must have written notice again to tax agencies on selection of incentive level in conformity with change of incentives as prescribed in this Circular.

Article 5. Organization for implementation

1. This Circular takes effect on December 31, 2012 and is applied from the enterprise income tax period of 2012. Annulling contents of prior guides of the Ministry of Finance that not similar to contents guided in this Circular.

2. Tax agencies of all levels shall popularize, propagate,guide enterprises for implementation.

In the course of implementation, any arising problems should be reported to the Ministry of Finance for research and settlement.

SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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NOTICE ON SELECTING PLAN TO BE ENJOYED TAX INCENTIVES

IN ACCORDING TO PROVISIONS OF THE CIRCULAR NO. 199/2012/TT-BTC

Respectfully to: Tax agency: ……………………….……………….

[01] Name of taxpayer:

[03] Name of tax agent (if any):......................................................................................................

The enterprise income tax incentives being enjoyed till 2012 by meeting preferential conditions on export rate, which are terminated enterprise income tax incentives due to implementation of WTO commitment:

+ Incentives on tax rate of enterprise income tax: ….%; Duration of application: from year: …… to year…..

+ Incentives on tax exemption: ….year; from year: …… to year…..

+ Incentives on tax reduction: ….year; from year: …… to year…..

Now enterprise notifies selection to change the enterprise income tax incentives in according to legal documents on enterprise income tax :……………… Incentives are proposed for change for the remaining time from 2012:

+ Incentives on tax rate of enterprise income tax: ….%; Duration of application: from 2012 to year…..

+ Incentives on tax exemption: ….year; from: 2012 to year:…..

+ Incentives on tax reduction: ….year; from year: …… to year…..

I commit that the contents declared are right and I will take responsibility before law for these contents.