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Cash-strapped firms get tax relief

Update: August, 04/2012 - 08:03

 

The Song Da Garment Co generates about 400 jobs in the central province of Hoa Binh. The garment industry is one of several to enjoy a corporate income tax reduction. — VNA/VNS Photo Tran Viet
HA NOI — Struggling enteprises and household businesses will officially enjoy corporate income tax breaks when the Government announces a decree on the implementation of new tax policies.

Under the decree, the Government will slash corporate income tax in 2012 by 30 per cent for small and medium-sized enterprises, not including those operating in the fields of property, securities, finance, banking, insurance and commodity production.

The Government will also reduce corporate income tax by 30 per cent for businesses that employ more than 300 people involved in production, processing, agriculture, fisheries, garments and textiles, and electrical accessories.

The decree will also apply to VAT and personal income tax for household businesses or individuals that run guest houses and lease rooms to workers, labourers and students, as well as those that provide childcare services and supply daily rations for workers.

In order to enjoy these benefits, the above-mentioned household businesses and individuals will have to pledge to maintain rent and fees for childcare and daily rations at the same rate as of December 2011.

Starting from July 1 this year, those with a monthly income of less than VND5 million (US$238) in the first tax bracket will be exempt from personal income tax. Under new regulations, the increase in the personal tax rate from the current VND4 million ($190) to VND9 million ($428) and for each of the taxpayer's dependants from VND1.6 million ($77) to VND3.6 million ($115) will be applied. The Law on Personal Income Tax was approved by the National Assembly on October 21, 2007, and came into force on January 1, 2009.

The new decree will take effect from September 20, 2012. — VNS

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