Corporate income tax on smaller enterprises might be cut to as little as 15%

By VNA   June 21, 2024 | 04:49 pm PT
Corporate income tax on smaller enterprises might be cut to as little as 15%
An employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy
The corporate income tax on small and micro-sized enterprises might be cut to 15-17% from a current common rate of 20%, depending on previous revenues.

More appropriate tax rates for small and micro–sized enterprises is one highlight of the draft amendments to the Law on Corporate Income Tax, which with aims to promote the development of the private economic sector and encourage a transition from business households into enterprises, according to the Ministry of Finance.

The ministry said that most countries apply tax rates lower than the common rate on small enterprises. Tax rates can vary according to revenue scale and taxable income.

In comparison with ASEAN countries, the ministry said that the common tax rate of 20% is equal to that of Thailand, Laos and Cambodia, lower than the Philippines (at 30% ), Myanmar (at 25%) and Indonesia (at 22%) but higher than Singapore (at 17%) and Brunei (at 18.5%).

Statistics show that there are about 900,000 enterprises in Vietnam, of which small and micro-sized enterprises account for nearly 94%.

It is necessary to encourage their development to generate revenue for the State budget in the long term, the ministry said.

The ministry is therefore proposing a tax rate of 15% for enterprises with revenues of less than VND3 billion per year and 17% for enterprises with revenues between VND3 billion and VND50 billion.

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