Opportunity for Small and Medium businesses (SMEs) post COVID-19
The Ministry of Finance has just proposed the Government to submit to the National Assembly a draft Resolution on income tax policies to support and develop small and medium-sized enterprises (SMEs) at the National Assembly Meeting in May 2020. Notably, the expected effective date of the policy starts right from 1 July 2020 rather than 1 January 2021 as previously proposed.
The proposed reduced tax rates are from 15-17% versus the standard tax rate 20%. Namely:
|Tax rate||Annual Revenue||Average number of employees |
subject to social insurance
|15%||< 3 Bil VND||≤10 staff|
|17%||≥ 3 Bil VND and < 50 Bil VND||≤100 staff|
The proposed 15% tax rate will be applicable to enterprises having annual revenue less than 3 Billion VND and having no more than 10 employees subject to social insurance in a year.
The proposed 17% tax rate will be applicable to enterprises having annual revenue from 3 Billion VND to less than 50 Billion VND and no having more than 100 employees subject to social insurance in a year.
In addition, to encourage household businesses converting to enterprises, theses newly converted enterprises shall entitle 2 year tax exemption since being profitable
Should you need more information, feel free to contact us for a free consultation on business setup in Vietnam.