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Foreign economic organizations and individuals have enjoyed the exemption of tax for transporting profits abroad since Jan.1,2004
Under the Law on Foreign Investment in Viet Nam, foreign organisations and individuals�€™ legal incomes earned from investment under any forms are exempted from tax for repatriating profits in replacement of paying 5 percent in the past.
Such tax exemption will also be applied for overseas Vietnamese who invest in the homeland and foreign residents in Viet Nam. Legal incomes include income taxes that have been repaid for reinvestment and incomes earned from transferring capital or buying stockshares.
Those foreign investors who use profits and other legal incomes earned from investing in Viet Nam to reinvest will not receive recovery of corporate income tax for profits from the reinvestment.
To offset, enterprises were exempted from or received a cut in taxes levied on their profit gained from the reinvestment, Quach Duc Phap, Head of Tariff Policy Department under the Ministry of Finance, said, adding that the move aims to create a fair environment between local and foreign enterprises, encourage them to expand production and avoid subsidising local enterprises, especially in the process of Viet Nam�€™s international integration.
The new corporate income tax of 28 percent, against 32 percent for domestic enterprises and 25 percent for foreign ones previously, applied for both of them, will create equality and transparency between them, the Ministry said, stressing this new tax approximates to that of other regional countries, for example, China and Malaysia.
The Government also abolished the 50 percent tax rate imposed on incomes of foreigners in Viet Nam and raised the taxable income to 5 million VND from the previous 3 million VND for Vietnamese citizens.
VNCG-VDC1 - (05/04/2004)
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