Income tax to be cut 30% for small business

According to Decree 101/2011/ND-CP, corporate income tax payable by small- and medium-sized enterprises this year will decline by 30-per-cent.

Enterprises in line for tax reductions include those operating in agricultural, forestry, fisheries, textile, garment, leather, footwear and electronic part production sectors and those contributing to socio-economic development.

The reduction would be not applied for income tax from business sectors related to the lottery, real estate, finance, securities, banking, insurance, goods production and service trading.

Parent company subsidiaries will also fall outside the sphere of new tax levels.

The decree additionally stipulates a 50 per cent reduction in individual income tax from July 1 to December 31, 2011, alongside a fixed value-added tax to be applied to households or individuals providing accommodation and catering services to shift workers, students and baby-sitters.

Both value added and corporate income tax will be halved over the same period, but will exclude shift workers employed in transport and aviation.

To be eligible for a tax reduction, households and individuals will have to engage in keeping rent, baby-sitting costs and food prices stable and at the same level as those in December 2010.

Meanwhile, individual income tax from August 1 to December 31, 2012, will be made exempt based on individual dividends gained from securities and corporate investments (excluding dividends from joint stock banks, financial investment funds and credit organizations).

A reduction of 50 per cent will be levied on individual income tax from August 1, 2011 until December 31, 2012, in relation to securities trading.

The decree will come into effect on December 20, 2011.