On June 19th 2020, in the last working day of the 9th session, the National Assembly passed the Resolution on reduction of payable corporate income tax (CIT) of 2020. With 442/446 (>92%) National Assembly deputies voted to approve, the National Assembly decided to reduce 30% of CIT for enterprises with revenue of less than VND 200 billion. It will come into force after 45 days of signing and applying for the tax period 2020.

Subjects entitled to corporate income tax reduction including:

          - Enterprises established under the provisions of Vietnamese law;

          - Organization established under the Law on Cooperatives;

          - Non-business units established under the provisions of Vietnamese law;

          - Other organizations established in accordance with Vietnamese law and engaged in production, trading goods and income-generating services.

Meanwhile, according to Law on Enterprise Income Tax, taxpayers are specified as:

“Taxpayers are goods and service production and business organizations which have taxable incomes under the provisions of this Law (referred to as enterprises), including:

          a/ Enterprises established under Vietnamese law;

          b/ Enterprises established under foreign laws (referred to as foreign     enterprises) with or without Vietnam-based permanent establishments;

          c/ Organizations established under the Law on Cooperatives;

          d/ Non-business units established under Vietnamese law;

          e/ Other organizations engaged in income-generating production and business activities.”

Thus, except foreign enterprises, most of aforementioned taxpayers with revenue of less than VND 200 billion condition can get reduction on Corporate Income Tax.

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