LEGAL UPDATE: Did you know that the Government has issued the resolution to reduce CIT by 30% for companies in 2020?

On 19 June 2020, the National Assembly passed Resolution No. 116/2020/QH14 on reducing corporate income tax (“CIT”) in 2020 (“Resolution 116”).

Qualified entities will receive a 30% reduction in CIT.

We wrote about this previously and promised that we would update you once we receive actual legislation.

1. Applicable entities

Resolution 116 applies to the following entities:

• An enterprise established under the law of Vietnam;

• An organization established under the Law on Cooperatives;

• A professional entity established under the law of Vietnam; 


• Any other organization established under the law of Vietnam and conducting activities of production and/or trade in goods and services which earns income.

2.  Condition to qualify for CIT reduction

There is only one condition to qualify for CIT reduction: total revenue in 2020 does not exceed VND 200 billion. 

In addition, each qualified taxpayer may self-assess the amount of the reduction when paying  provisional CIT on a quarterly basis and at the end when CIT is finalized for 2020. 

Resolution 116 took effect on 3 July 2020 and applies to the tax periods in 2020. 

The translation in English is in the link below:

DN Legal, 17 July 2020