HCMC – The Ministry of Finance is drafting a Government decree to implement certain provisions of the resolution on special mechanisms and policies to develop the private sector, including a proposal granting innovative startups a two-year corporate income tax exemption.
Innovative startups, intermediary organizations supporting innovation and startups, and venture capital management companies for innovative startups are proposed to be granted a two-year corporate income tax exemption and a 50% reduction in payable tax for the subsequent four years.
The tax exemption and reduction period would run consecutively from the first year a business records taxable income from innovative startup or innovation activities.
If no taxable income is generated within the first three years from when revenue is first recorded from these activities, the period would instead start in the fourth year.
Income from innovative startup and innovation activities eligible for tax exemptions must be recorded separately from income derived from other business and production activities that are not granted such incentives.
In addition, businesses earning income from the transfer of shares, capital contributions, rights to contribute capital, or rights to purchase shares or capital contributions in innovative startups will be exempt from corporate income tax on such earnings.
Small and medium-sized enterprises registering for business for the first time – excluding those formed through mergers, consolidations, divisions, separations, ownership transfers, or changes in business type – will be granted a three-year corporate income tax exemption starting from the date of their initial business registration certificate.
