Tax Incentive to organizations engaging in priority sector within HCMC (Ho Chi Minh City).
Government of Vietnam issued Decree No. 11/2024/ND-CP in which resolution No. 98 contains a number of tax incentives which aims to supporting the organizations involved in priority sectors within HCMC.
Corporates will be exempt from income tax for a period of 5 years from the year in which they start generating taxable income from innovative startup business.
Exemption from income tax available for individuals and corporates which are generating the income from the capital contributed in innovative startup enterprises in HCMC essentially gain on transfer of capital of such enterprises.
If a corporate deriving its revenue from multiple sources, then they have to record the streams of revenue separately to determine the income eligible for tax exemption.
The HCMC People’s Council will issue detailed regulations including specifying the prioritized sectors, criteria, conditions, and innovative startup activities for applicable entities.
SW Point of View:Companies operating in Vietnam or client operating/ intending to operate in Vietnam should keep a watch on the related developments which can help in reducing the tax outflow for the company or for the group.
Rishabh Jain,Executive Direct and International Tax, SW
