The Government Grants Tax Exemptions to Numerous Businesses and Individuals in Ho Chi Minh City, Vietnam
The government has issued Decree No. 11/202/ND-CP, which provides clear regulations regarding tax exemptions on corporate and personal income within the jurisdiction of Ho Chi Minh City.
For corporate income tax, the government has decided that startups, innovative businesses, scientific and technological organizations, innovation and creativity centers, and intermediary organizations supporting startup and innovation activities (hereinafter referred to as “enterprises”) generating income from innovative startup activities within the Ho Chi Minh City jurisdiction will be exempt from corporate income tax on this income.
Enterprises benefiting from tax exemptions must meet the criteria and conditions set forth by the People’s Council of Ho Chi Minh City in the field of priority, criteria, conditions, and content of innovative startup activities.
The tax exemption period is five years, starting from the moment the enterprise generates corporate income tax liability from innovative startup activities within the Ho Chi Minh City jurisdiction and during the effectiveness of Resolution No. 98/2023/QH15 on the pilot mechanism and special policies for Ho Chi Minh City.
If Resolution No. 98/2023/QH15 expires while the tax exemption period has not yet concluded, enterprises shall continue to enjoy the tax exemption until the end of the tax exemption period.
In cases where enterprises are currently within the tax exemption period or eligible for corporate income tax exemptions under different conditions, they can choose the tax exemption option.
During the effectiveness of Resolution No. 98/2023/QH15, organizations generating income from the transfer of capital contribution or equity participation in innovative startup businesses within the Ho Chi Minh City jurisdiction will also be exempt from corporate income tax on this income.
Regarding personal income tax, the government’s decree states that “individuals receiving income from the transfer of capital contribution or equity participation in innovative startup businesses within the Ho Chi Minh City jurisdiction shall be exempt from personal income tax on this income.” This provision applies concurrently with the effectiveness of Resolution No. 98/2023/QH15.
Following the government’s decree, innovative startup businesses within the Ho Chi Minh City jurisdiction must comply with the criteria and conditions specified by the People’s Council of Ho Chi Minh City in the field of priority, criteria, conditions, and content of innovative startup activities.
Income from the transfer of capital contribution or equity participation as mentioned in this provision refers to income derived from the transfer of part or all of the capital or equity participation in innovative startup businesses within the Ho Chi Minh City jurisdiction (including the sale of businesses), excluding income from the transfer of stocks, bonds, fund certificates, and other securities as regulated.
As per the government’s decree, in cases where an individual, as the owner of an entire business, transfers ownership under a capital contribution transfer related to real estate, they must declare and pay personal income tax following real estate transfer activities.
The determination of income from the transfer of capital contribution, equity participation, and the declaration process with tax authorities shall be carried out following the laws governing personal income tax and tax management.
