The Government has just issued Decree 11/2024/ND-CP dated February 2, 2024, which clearly stipulates the exemption of corporate income tax and personal income tax in Ho Chi Minh City.
This Decree details a number of articles of Resolution No. 98/2023/QH15 dated June 24, 2023 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Ho Chi Minh City.
Corporate income tax exemption
The Decree stipulates that innovative start-up enterprises, science and technology organizations, innovation centers and intermediary organizations supporting innovative start-ups (enterprises) with income from innovative start-up activities arising in Ho Chi Minh City are exempt from corporate income tax on this income.
Enterprises with income exempted from corporate income tax as prescribed in this clause must satisfy the regulations of the Ho Chi Minh City People's Council on priority fields; criteria, conditions, and content of innovative start-up activities.
The tax exemption period is 05 years from the time the enterprise generates corporate income tax payable from innovative start-up activities arising in Ho Chi Minh City during the effective period of Resolution No. 98/2023/QH15. After Resolution No. 98/2023/QH15 expires, if the tax exemption period prescribed in this clause has not ended, the enterprise shall continue to implement it until the end of the tax exemption period.
In case an enterprise is in the period of exemption or is subject to corporate income tax exemption under conditions other than those prescribed in this Decree, it may choose to enjoy tax exemption under other tax exemption conditions or tax exemption under the provisions of this Decree for the remaining period.
During the effective period of Resolution No. 98/2023/QH15, organizations with income from transferring capital contributions and capital contribution rights to innovative start-up enterprises in Ho Chi Minh City are exempt from corporate income tax on this income.
Innovative start-up enterprises in Ho Chi Minh City as prescribed in this clause must meet the regulations of the Ho Chi Minh City People's Council on priority areas; criteria, conditions, and content of innovative start-up activities.
Income from capital transfer and capital contribution rights specified in this clause is income obtained from transferring part or all of the capital and capital contribution rights to innovative start-up enterprises in Ho Chi Minh City (including cases of selling enterprises), except for income from transferring stocks, bonds, fund certificates and other types of securities as prescribed.
In case of selling the entire single-member limited liability company owned by an organization in the form of capital transfer associated with real estate, corporate income tax must be declared and paid according to real estate transfer activities.
In case an enterprise conducts many production and business activities, the enterprise shall determine and account for income from tax-exempt activities according to the provisions of the law on corporate income tax.
Enterprises shall declare and pay taxes in accordance with the provisions of the law on tax administration.
Personal income tax exemption
The Decree stipulates that during the effective period of Resolution No. 98/2023/QH15, individuals with income from transferring capital contributions and capital contribution rights to innovative start-up enterprises in Ho Chi Minh City are exempt from personal income tax on this income.
Innovative start-up enterprises in Ho Chi Minh City as prescribed in this clause must meet the regulations of the Ho Chi Minh City People's Council on priority areas; criteria, conditions, and content of innovative start-up activities.
Income from capital transfer and capital contribution rights specified in this clause is income obtained from transferring part or all of the capital and capital contribution rights to innovative start-up enterprises in Ho Chi Minh City (including cases of selling enterprises), except for income from transferring stocks, bonds, fund certificates and other types of securities as prescribed.
In case of selling the entire enterprise owned by an individual in the form of capital transfer associated with real estate, declare and pay personal income tax according to real estate transfer activities.
Determination of income from capital transfer, capital contribution rights and declaration to tax authorities shall comply with the law on personal income tax and the law on tax administration.
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