Vietnam Slashes Corporate Tax
June 21, 2013 Taxation in Vietnam
HANOI – Vietnam is looking to encourage more economic activity by lowering the tax burdens faced by businesses.
On June 19th the National Assembly of Vietnam voted on and approved a cut the country’s corporate tax rate, lowering the tax from the current 25 percent to 22 percent on January 1st 2014, with a further reduction down to 20 percent scheduled for the beginning of 2016.
Small and medium sized enterprises in Vietnam, which make up the majority of the country’s businesses, will be granted even greater tax benefits, with a 20 percent tax rate being applied from July this year, ultimately being reduced to 17 percent in 2016.
In a further effort to reduce tax burdens on businesses, the government will also now allow companies to carry forward any losses incurred, and to deduct these losses from tax calculations.
The government has acknowledged that the cuts will lead to a drop in overall tax collections in Vietnam, but the reduction is intended to spur greater economic activity and to boost Vietnam’s competitiveness amongst other Asian countries.
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