On 19 June 2013, the National Assembly approved the following key amendments to the CIT Law, which take effect from 1 January 2014 (unless otherwise stated):
|-||Tax rates will be reduced to 22% (from 25%) with effect from 1 January 2014 and 20% from 1 January 2016.|
|-||Enterprises having total revenue of less than VND 20 billion must apply a 20% rate from 1 July 2013, excluding certain types of transactions such as the transfer of capital, transfer of real property, transfer of the right to explore, mine and process minerals, etc.|
|-||Other taxable income now also includes income from: (i) transfer of investment projects; (ii) transfer of right to participate in investment projects; (iii) transfer of right to contribute capital; (iv) transfer of the right to explore, mine and process minerals; and (v) income from transfer, leasing out or liquidation of valuable papers. Amounts recovered from contingency reserves no longer constitute other income.|
|-||For tax declaration and payment purposes, the following income is to be accounted for separately: (i) real property transfers; (ii) transfer of rights to participate in investment projects; (iii) transfer of rights to explore, mine and process minerals.|
|-||The scope of investment entitled to CIT incentives has been broadened to include large manufacturing projects in excess of VND 6,000 billion (approximately USD 300 million) and investment projects in selected industrial zones. Incentives are also now available to both new and expanded qualifying projects.|
|-||The cap for the deduction of advertisement and promotion expenses will increase to 15% (from 10%) and payment discounts will be fully deductible. Payments to voluntary retirement funds/social welfare funds/voluntary retirement insurance programme for employees will be deductible. Expenses incurred for sponsoring scientific research will also be fully deductible.|
|-||Note that the thin capitalization restrictions (of 4-5 times equity and 12 times equity for banks and credit institutions) that were in the previous drafts have not been adopted.|
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