Thông tư 212/2015/TT-BTC

CIRCULAR

GUIDELINES FOR THE CORPORATE INCOME TAX POLICIES FOR ENVIRONMENTAL PROTECTION ACTIVITIES REGULATED AT THE GOVERNMENT’S DECREE NO. 19/2015/ND-CP DATED FEBRUARY 14, 2015 DETAILING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LAW ON ENVIRONMENTAL PROTECTION

Pursuant to the Law on Corporate Income Tax and guidance instruments for implementation;

Pursuant to the Government’s Decree No. 19/2015/ND-CP dated February 14, 2015 detailing the implementation of a number of articles of the Law on Environmental Protection;

Pursuant to the Government’s Decree No.215/2013/ND-CP dated 23 December 2013 defining the functions, tasks, powers and organizational structures of Ministry of Finance;

At the request of Director of Department of Tax Policy;

Minister of Finance promulgates this Circular providing guidelines for the Corporate Income Tax Policies for the environmental protection activities regulated at the Government’s Decree No. 19/2015/ND-CP dated 14 February 2015 detailing the implementation of a number of articles of the Law on Environmental Protection.

Article 1. Scope of regulation

1. This Circular provides guidelines for deductible expenditures upon determination of income subject to corporate income tax (hereinafter referred to as taxable income) for the environmental protection activities of organizations, companies, co-operatives (hereinafter referred to as the enterprise) and the tax incentives for the environmental protection activities which are eligible for incentives on the corporate income tax as stipulated in Article 43 and Article 48 of the Decree No. 19/2015/ND-CP.

2. Regulations of law on corporate income tax (CIT) shall apply to other environmental protection activities not regulated in the Decree No. 19/2015/ND-CP and other expenses not regulated by this Circular.

Article 2. Expenditures on product advertising and waste classification at source

1. The actual expenditure on product advertising from the environmental protection activities, collection and treatment of discarded products; the expenditure on production and publishing of various kinds of scientific reportages, films, and TV programs on environmental protection and the expenditure on provision of complimentary tools for people to classify daily-life wastes and discarded products at source as stipulated at Clause 1 Article 48 of the Decree No. 19/2015/ND-CP shall be deductible upon determination of taxable income if the following conditions are satisfied:

- The expenditures have adequate lawful invoices and documents as required by law.

- There is documentary evidence of non-cash payment for every purchase of goods of service with an invoice for VND 20 million or over (inclusive of VAT), except for cases without non-cash payment documents as stipulated at the Government’s Decree No. 218/2013/ND-CP dated 26 December 2013 and its instructional documents.

2. The expenditure on product advertising from the environmental protection activities, collection and treatment of discarded products stipulated at Item 1 of this Article include:

a) The expenditure on for organizing scientific seminars on the methods of production, features and uses of products from the environmental protection activities, of collection and treatment of discarded products.

b) The expenditure on market research: investigation, survey, interview, collection, analysis and evaluation of information concerning products from the environmental protection activities, collection and treatment of discarded products.

c) The expenditure on market research, development and support.

d) The expenditure for hiring consultants to conduct market research, development and support.

đ) The expenditure on product exhibition and introduction and organization of commercial fairs and exhibitions: expenditure on opening product showrooms or show-cases; expenditure on hiring space to exhibit and introduce products; expenditure on materials and tools used in product exhibition and introduction; and expenditure on transport of exhibited or introduced products.

3. Scientific reportages, films, and TV programs on environmental protection stipulated at Clause 1 of this Article include:

a) Scientific reportages, films, and TV programs for disseminating knowledge and improving public awareness about environmental protection and sustainable consumption of eco-friendly products award Vietnam Green Labels by Ministry of Natural Resources and Environment.

b) Scientific reportages, films, and TV programs for disseminating knowledge of classification of daily-life wastes and discarded products at source .

4. Provision of complimentary tools for people stipulated at Clause 1 of this Article include: waste baskets and bags; baskets and bags for storing discarded products; boots, gloves and other single-purpose tools for classifying daily-life wastes and discarded products at source.

In case the enterprise provides complimentary tools for people for classifying daily-life waste and discarded products at source as stipulated at this Clause together with leaflets explaining how to classify organic and inorganic solid wastes by the above-mentioned tools, the expenditure on production of the said leaflets is deductible upon determination of taxable income.

Each enterprise providing complimentary tools for people as stipulated at this Clause shall make a detailed list stating the full names and addresses of persons provided with such tools; quantity and value of each kind of tools; signatures of these persons; and signature of the legal representative or an authorized person of the enterprise.

The legal representative or an authorized person of the enterprise shall subscribe his/her signature to the list of provided complimentary tools and assume responsibility before law for the accuracy and truthfulness of the said list.

Article 3. The corporate income tax incentives

1. The corporate income tax incentives stipulated in this Circular shall be applied to the enterprise’s income from execution of new investment projects:

a) Centralized treatment of domestic wastewater with design capacity from 2,500 m³ of wastewater/day for urban areas of grade IV or more.

b) Collection, transport and centralized treatment of common solid wastes.

c) Treatment and renovation of polluted environment in public areas.

d) Response to oil spill, chemical incidents and other environmental incidents.

đ) Development of technical infrastructure for environmental protection in industrial parks and clusters of handicraft villages.

e) Cremation and electric cremation.

g) Assessment of damage to environment; assessment of environmental health and environmental assessment for the goods, machines, equipments and technologies.

h) Production and application of invention to protect the environment under the state protection in the form of Patent or Patent of useful solutions.

i) Production of eco-friendly products awarded Vietnam Green Labels by Ministry of Natural Resources and Environment; products from the recycling and treatment of waste certified by the competent state authorities.

k) Production of gasoline, diesel and biological energy having certificates of conformity; biochar, energy from the use of wind power, sunlight, tide, geothermal energy and other forms of renewable energy.

l) Production of machines, equipments and single-purpose means for direct use in collection, transport, treatment of waste; environmental observation and analysis, production of renewable energy; treatment of environmental pollution; response to environmental incidents.

2. Levels of incentives:

a) The tax rate:

The enterprise having income from the execution of new investment projects as stipulated at Clause 1 of this Article shall be eligible for the tax rate of 10% for 15 years.

In case the investment project has large scale and high or especially new technology for attracting investment, the period for applying the concessional tax rate of 10% may be extended but total period for applying the tax rate of 10% shall not exceed 30 years as decided by the Prime Ministry at the request of the Minister of Finance.

In case the enterprise meets criteria for private sector involvement in the environment field under the Decision of the Prime Minister, the concessional tax rate of 10% may be applied to its income from environmental activities throughout its operation.

Concessional tax rate shall be continuously applied from the first year in which the enterprise has revenue from new investment projects.

b) Tax exemption and reduction:

The enterprise’s income from the execution of new investment projects stipulated at Clause 1 of this Article shall be exempted from tax for 04 years and given 50% tax reduction for the next 09 years

Tax exemption and reduction shall be continuously applied from the first year in which the enterprise has taxable income from new investment projects and is eligible for tax incentives. If there is no taxable income in the first three years, from the first year in which the new investment project generates revenue, the period of tax exemption or reduction shall begin from the fourth year when the enterprise has revenue from the project.

Year of tax exemption, reduction shall be determinate in conformity with the tax period.  Tax exemption or reduction shall be continuously applied from the first tax period in which the enterprise starts to earn taxable income (including losses carried forwards from previous tax periods).

In the first tax period, if the enterprise’s new investment project has been given tax incentives for less than 12 (twelve) months, the enterprise shall be entitled to choose whether the tax incentives for new investment project in that tax period or register with the tax authority for application of the tax incentives from the next tax period.  If the enterprise chooses the later, it must determinate the tax payable of the first tax period in order to pay to the State Budget in accordance with regulations.

c) Specific application of concessional tax rate to some projects:

-  For new investment project engaging in production and application of invention to protect the environment under the state protection in the form of Patent or Patent of useful solutions, the concessional tax rate shall be applied from the issuing year of the said Patent or Patent of useful solutions.

- For new investment project engaging in production of eco-friendly products awarded Vietnam Green Labels by Ministry of Natural Resources and Environment, the concessional tax rate shall be applied from the awarding year of Vietnam Green Labels by Ministry of Natural Resources and Environment.

- For new investment project engaging in production of products from the recycling and treatment of waste certified by the competent state authorities, the concessional tax rate shall be applied from certification year of the competent state authorities.

In the first tax period, if the operating periods of the enterprise’s new investment projects stipulated at this clause are less than 12 (twelve) months, the enterprise shall be entitled to choose whether the tax incentives for new investment projects in that tax period or register with the tax authority for application of the tax incentives from the next tax period.  If the enterprise chooses the later, it must determinate the tax payable of the first tax period in order to pay to the State Budget in accordance with regulations.

3. If the enterprise has an investment project for enlarging its another operating project which is eligible for tax incentives as stipulated at Clause 1 of this Article, it must determine criteria for tax incentives and apply the tax incentives for the enlarged investment project in accordance with the law on the corporate income tax.

Article 4. Effect and execution organization

1. This Circular shall take effect after 45 days as of the signing date and be applied to the tax period in 2016.

2. Circular No. 230/2009/TT-BTC dated December 08, 2009 of Ministry of Finance guiding tax incentives for environmental protection activities stipulated at the Government’s Decree No. 04/2009/ND-CP dated January 14, 2009 on incentives and supports of environmental protection activities are abrogated.

3. With regard to an enterprise having an investment project eligible for tax incentives as stipulated in this Circular, if the incentive period has not expired when this Circular takes effect (whether incentives have been or have not been provided) in accordance with legislative documents on the corporate income tax, the enterprise is entitled to select between tax incentives provided for by such legislative documents or tax incentives provided for this Circular for the remaining period.

4. The tax agencies of all levels are responsible for disseminating regulations of this Circular and guiding the enterprises to execute this Circular.

5. Any difficulties arising in the course of implementation should be promptly reported to the Ministry of Finance for study and resolution./.