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Tax incentive policies for innovative startups contributing to promoting the development of the startup ecosystem in Vietnam. These policies are designed to support innovative startups to overcome initial difficulties, focusing on research, development and application of new technology. This article will delve into current tax incentive policies for innovative startups, as well as the benefits they bring.
According to Clause 2, Article 3 of the Law on Provision of Assistance for Small and Medium Sized Enterprises 2017 (Law on Support for SMEs 2017), creative small and medium-sized enterprises (SMEs) are small and medium-sized enterprises established to implement ideas on the basis of exploiting intellectual property, technology, and models. New business with rapid growth potential.
Tax incentive policy is one of the tools that the State uses to support SMEs. Currently, tax incentive policies focus on two main forms: preferential tax rates and preferential corporate income tax exemptions.
Clause 1, Article 10 of the Law on Provision of Assistance for Small and Medium Sized Enterprises 2017 stipulates: “SMEs may apply the corporate income tax rate lower than the common tax rate applied to enterprises for a limited period of time according to regulations of law on corporate income tax”.
However, the law does not specifically stipulate preferential tax rates applicable to SMEs. Therefore, in reality, SMEs still have to apply the tax rate according to the provisions of the Law on Corporate Income Tax 2008.
Specifically, according to Clause 1, Article 13 of the Law on Corporate Income Tax 2008, amended and supplemented in 2013, SMEs can apply a preferential tax rate of 10% for a period of 15 years if operating in the following fields:
In addition to tax rate incentives, SMEs can also enjoy corporate income tax exemptions and reductions.
Clause 1, Article 14 of the Law on Corporate Income Tax 2008, amended and supplemented in 2013, stipulates that SMEs operating in priority fields (as mentioned above) can be exempted from tax for 4 years and have a 50% reduction in taxes. Tax must be paid for a maximum of no more than the next 9 years. The tax exemption and reduction period is calculated continuously from the first year the enterprise has taxable income from the investment project.
Clause 3, Article 18 of the Law on Provision of Assistance for Small and Medium Sized Enterprises 2017 also mentions corporate income tax exemption and reduction for investors in SMEs. However, this regulation has not yet been specified in the Law on Corporate Income Tax, so in reality it has not brought practical benefits.
Tax incentive policies play an important role in supporting and promoting the development of SMEs. Specific benefits include:
Understanding and applying tax incentive policies for SMEs can be difficult due to the complex and frequently changing legal system.
Long Phan providing professional consulting services on tax incentive policies for SMEs, including:
Tax incentive policies are one of the State’s important tools to support innovative startups. Mastering the regulations on tax incentives will help businesses make the most of development opportunities. Customers who need advice on tax incentive policies for innovative startups, please contact the hotline: 0906735386 for support.
Note: The content of the articles published on the website of Long Phan Investment Consulting Company is for reference only regarding the application of legal policies. Depending on the time, subject, and amendments, supplements, and replacements of legal policies and legal documents, the consulting content may no longer be appropriate for the situation you are facing or need legal advice on. In case you need specific and in-depth advice according to each case or incident, please contact us through the methods below. With our enthusiasm and dedication, we believe that Long Phan will be a reliable solution provider for our clients.
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