Supporting Industrial Products Enjoy Tax Incentives According to Decree 57/2021/ND-CP
Supporting industrial products play an important role in serving the production and economic development needs of each country. The Government often applies tax incentives and support policies for businesses to encourage the production of these types of products.
Decree No. 57/2021/ND-CP has just been issued to supplement regulations on corporate income tax incentives for projects manufacturing supporting industrial products. This helps businesses have more opportunities to take advantage of incentive policies to develop production.
Interested businesses should clearly understand the details of tax incentives under this Decree to have an effective production plan. Taking advantage of tax incentives will help businesses save costs and increase competitiveness in the market. Get detailed information and expert advice to get the most out of your supporting industrial product manufacturing project.
1. Incentives for Supporting Industrial Products
According to Decree No. 57/2021/ND-CP, projects manufacturing supporting industrial products are considered for corporate income tax incentives. This helps reduce tax fees for businesses, creating favorable conditions for them to develop production and business.
Specifically, businesses with investment projects (new investment and expansion investment) manufacturing products on the list of priority supporting industrial products for development, implemented before January 1, 2015, meeting the conditions of a supporting industrial product manufacturing project as prescribed in Law No. 71/2014/QH13 and being granted a certificate of incentives for manufacturing supporting industrial products by a competent authority will enjoy corporate income tax incentives.
2. Cases in which Enterprises are Eligible for Incentives
Decree 57/2021/ND-CP of the Government has added point g, clause 2, article 20 in Decree 218/2013/ND-CP (amended and supplemented in clause 20, article 1 of Decree 12/2015/ND-CP) on corporate income tax (CIT) incentives for projects manufacturing supporting industrial products.
According to the new regulations, enterprises with investment projects (new investment and expansion investment) manufacturing products on the list of priority supporting industrial products for development, implemented before January 1, 2015, meeting the conditions of a project manufacturing supporting industrial products as prescribed in Law No. 71/2014/QH13 and being granted a certificate of incentives for manufacturing supporting industrial products by a competent authority will enjoy CIT incentives.
For enterprises with supporting industrial product manufacturing projects whose income from this project has not yet enjoyed CIT incentives, they will enjoy CIT incentives under the conditions of supporting industrial product manufacturing projects from the tax period in which the competent authority issues a certificate of incentives.
For enterprises with supporting industrial product manufacturing projects whose income from this project has fully enjoyed CIT incentives under other incentives, they will enjoy CIT incentives under the conditions of supporting industrial product manufacturing projects for the remaining period.
For enterprises with supporting industrial product manufacturing projects whose income from this project is enjoying CIT incentives under other incentives, they will enjoy CIT incentives under the conditions of supporting industrial product manufacturing projects for the remaining period.
3. Incentive Period
Decree 57/2021/ND-CP also provides specific guidance on how to determine the remaining incentive period for supporting industrial product manufacturing projects.
Specifically, to determine the remaining incentive period, it is necessary to take the CIT incentive period according to the conditions of the supporting industrial product manufacturing project and subtract the incentive period that the enterprise has enjoyed under other incentive conditions, including:
1. Remaining tax exemption period: Take the tax exemption period according to the conditions of the supporting industrial product manufacturing project and subtract the tax exemption period already enjoyed under other incentive conditions.
2. Remaining tax reduction period: Take the tax reduction period according to the conditions of the supporting industrial product manufacturing project and subtract the tax reduction period already enjoyed under other incentive conditions.
3. Remaining preferential tax rate application period: Take the preferential tax rate period according to the conditions of the supporting industrial product production project minus the preferential tax rate period already enjoyed under other preferential conditions (if any).
If the implementation of the above provisions leads to a reduction in the amount of corporate income tax and late payment fees (if any) that have been declared or inspected, the enterprise may submit a written request to adjust the reduction of the payable corporate income tax amount to the direct tax authority. After the adjustment, if there is an excess amount of tax and late payment fees, it shall be implemented according to the provisions of Article 60 of the Law on Tax Administration.
4. Example of guidance on incentives for supporting industrial products under Decree 57/2021/ND-CP
Decree No. 57/2021/ND-CP has supplemented Clause 2, Article 20 of Decree No. 218/2013/ND-CP on corporate income tax incentives for projects manufacturing supporting industrial products. This helps create favorable conditions for enterprises operating in the supporting industrial sector and at the same time promotes economic development.
Specifically, the method of determining the incentive period under Decree 57 is by taking the corporate income tax incentive period under the conditions of the supporting industrial product manufacturing project minus the number of years of tax exemption, the number of years of tax reduction, and the number of years of preferential tax rates that have been enjoyed under other incentive conditions.
Specific Examples
Example 1: In 2010, an enterprise implemented an expansion investment project in an area not included in the list of tax incentive areas. During the 2011 tax period, the project generated revenue and taxable income. In this case, the enterprise will be considered for incentives according to the provisions of Decree 57/2021/ND-CP.
Example 2: An enterprise has a project to manufacture supporting industrial products and has enjoyed CIT incentives under other preferential conditions. After Decree 57 takes effect, the enterprise may enjoy incentives under the newly prescribed conditions, depending on the specific regulations.
See more articles: 55 List of industries prioritized for development support
5. Tam Viet Tax Expert Advice for Supporting Industry Products
Make sure that your business fully understands the conditions and regulations in Decree 57/2021/ND-CP to take advantage of all opportunities and support from this policy. Compliance with regulations will help businesses receive the best benefits from the tax incentive program.
In addition, contacting the tax authority or tax consultants will help businesses get detailed instructions on how to apply and the necessary requirements to effectively enjoy incentives.
We are confident with many years of experience helping dozens of Vietnamese and foreign businesses including Japan, Korea, Taiwan, China, etc. to enjoy incentives successfully in the shortest time. 100% of our customers are satisfied with Tam Viet Tax's services and are willing to recommend them to other partners.
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