Lower corporate income tax rates and her incentives for small and medium nterprises

A lower corporate income tax rate and other incentives will be granted to small and medium enterprises, effective 1 January 2018. These will be applicable to both foreign invested and domestic SMEs.

Law 04/2017/QH14, passed on 12 June, defines SMEs as enterprises having no more than 200 employees registered in the state social insurance scheme in a year, and which meet one of the following conditions:

Total “capital” (not defined) not exceeding VND100 billion.

Total revenue of the preceding financial year not exceeding VND 300 billion.


The key incentives provided by the Law include:

SMEs will be entitled to a CIT rate lower than the standard rate for a finite period.

The Law does not specify the rate or the period, but its previous draft in May proposed a rate lower by 5% for a maximum 5 years. The rate and period will thus be provided in a guiding regulation.

CIT exemption and reduction are available to enterprises investing in distribution chains in which at least 80% SMEs supply goods produced in Vietnam.

SMEs can apply a simplified accounting system as stipulated in the accounting regulations.

SMEs can receive credit guarantees by a fund set up by provincial People’s Committees.

Domestic SMEs located in industrial zones or high-tech zones can enjoy land lease support by provincial People’s Committees.

Ministries and provincial People’s Committees must support and/or cooperate with SMEs in technology research and development, technology transfer/training/consulting, intellectual protection, or in establishment of common technology working units.

SMEs can also receive support in human resource development and legal consultancy.

Additional incentives can be granted to start-up SMEs and SMEs participating in value chains.



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