30% corporate tax cut offered for SMEs
However, those businesses which operate in the areas of real estate, lottery, securities, banking, insurance, and production or provision of commodities and services and are subject to the special consumption tax will not be eligible for the tax reduction.
Under the decree, labour-intensive businesses in the fields of farm produce processing, footwear and garment making, electronic components, and construction will also be given the 30% tax cut. In these cases, enterprises must have at least 300 regular labourers employed as on 2012, except for those working under the contract of less than three months.
In the same period of time, if an enterprise is entitled to different tax incentives for the same taxable income, it can choose the most preferential incentive.
In cases where enterprises are already enjoying other corporate income tax incentives under the prevalent law, then the tax reduction as provided for in this decree will be calculated on the remaining sum after deduction of the tax incentives.
The decree also stipulates the exemption of value-added taxes and personal income tax for households and individuals involved in providing guest-houses for workers, labourers and students as well as those taking care of children and supplying food services for workers.
The tax incentives are among the Government’s movements to support companies. The bankruptcy of thousands of businesses have slowed the national GDP growth to just 4% in the first quarter, and 4.66% in the second quarter of this year, lower than the levels of previous years.
The ministry has been working on a project to assist the business community, focusing on dealing with their inventories and creating outlets for their products.
