On 19 June 2020, Vietnam National Assembly has officially passed the Resolution for 30% reduction of Corporate Income Tax (“CIT”) in 2020 for businesses with turnover of less than VND 200 billion. This Resolution shall take effect after 45 days upon the signing date and will be applied to the tax year 2020.
The Resolution is applied for enterprises, non-business units, other organizations that generated income via production and trading goods and services established under the provisions of Vietnamese law; organizations established under the Law on Cooperatives.
Compared to the original draft, this Resolution has removed the condition on the number of employees contribute to the insurances (in the draft, the reduction of 30% CIT applies only to businesses with the average number of employees participating in insurance in 2020 not exceed 100 people). This change ensures the fairness for labor-intensive businesses and expand the application of the reduction to the medium-sized businesses.
This Resolution by Vietnam National Assembly is considered as one of the practical policies to support the business community, to resolve difficulties and promote production and business, provide incentive to the economy to cope with the epidemic Covid-19’s consequences.