HANOI – Certain companies will pay half of value added tax and 30% of corporate income tax as the Government has determined to pull the corporate sector out of the economic stress through tax breaks.
In a newly released circular which guides the execution of Prime Ministerial Decision 58/QD-TTg, the Ministry of Finance says businesses will also enjoy an extension for VAT payment for certain imports, and organizations and individuals will get 50% off vehicle registration fees.
Circular 85/2009/TT-BTC signed on April 28 by Deputy Finance Minister Do Hoang Anh Tuan states that these tax benefits will take effect on May 1.
The items, which are subject to a 50% tax cut from early May to December 31 no matter whether they are imported, locally produced and processed or traded, are yarn, fabric, garments, footwear, all types of pulp and paper but newsprint, all paper products but books, cement, tiles, roof tiles including asbestos cement sheets, and motorcycles and tricycles of above 125cc.
Importers of machinery, equipment, spare parts and specialized vehicles for use on production lines that are not locally produced will have a six-month extension for payment of VAT. This will relieve them of the financial burden at a time of economic hardship.
The period of extension will begin to be counted, inclusive of holidays, from the date of customs declarations for imports being made between May 1 and December 31, says the circular.
The circular specifies a 30% reduction in corporate income tax payable in the final quarter of last year, but it is applicable only to producers and processors of yarn, textiles, garments, leather goods and footwear, and dyeing businesses.
Registration fees for passenger vehicles of less than 10 seats will be slashed by half from early May to end-December. This tax benefit will not apply to motor tricycles and vehicles designed for both cargo and passenger transport.