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Information on new tax laws released   2008-06-24 - VNA

The President Office on June 23 released information on four revised laws on corporate income tax, value added tax, management and use of State properties and compulsory purchase and requisition of property, which will be made effective next year.

The corporate income tax is now 25% instead of 28%

Under the Law on Corporate Income Tax, taxable incomes will be deprived from production, trading, service, transfers of capital and real estate and property leasing.

Meanwhile, incomes of cattle-breeding and aquacultural business, scientific activities as well as businesses involving handicapped people will be made tax free.

The Law stipulates that the general tax rate for corporate be decreased from the previous 28 percent to 25 percent, while oil and gas related businesses will have a wider range of tax rates from 32 to 50 percent.

Regarding preferential treatments for start-ups and companies operating in difficult areas, the law offers a maximum tax-exempt period of four years with a 50 percent deduction of tax rate over a period of nine consecutive years.

The Law also sets the preferential tax rate at maximum 10 percent for 15 years.

It regulates that the enterprises can spend 10 percent of their pre-tax income for R&D activities.

According to the law drafting committee, the new tax rates will cost the State Budget an estimated 5,000 billion VND ( 312 million USD) annually, but will create a more favourable business environment, thus bringing in steady incomes in the long-term.

The revised Value Added Tax Law stipulates that all goods and services, except for unprocessed agricultural and marine products, consumed within Vietnam will be subject to taxes,

A tax rate of 5 percent will be applied to clean water, fertiliser ore, pesticides, animal feed, unprocessed foodstuffs, medical equipment and agricultural machineries, while remaining goods and products will pay 10 percent.

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