Tax incentives for agricultural production enterprises in Vietnam

Since ancient times, agricultural production has always played an important role in our economy. Especially in the current period of Covid-19 raging, agriculture must promote even more strongly its role as a pedestal of the pandemic economy, ensuring the supply of food, food and essential goods. , is an important basis for the implementation of security and people’s security. Understanding the importance of the agricultural sector, our State always focuses on creating favorable conditions and incentives for agricultural production enterprises to develop, LSX Lawfirm will give you an article about: “Tax incentives for agricultural production enterprises in Vietnam”, as follows:

Legal grounds

– Law on corporate income tax 2008 (amended and supplemented 2013);

– Then, Law on import tax and export tax 2016;

– So, Decree 52/2021/ND-CP on extension of payment of value added tax, corporate income tax, personal income tax and land rent in 2021;

– Then Decree No. 134/2016/ND-CP detailing a number of articles and measures to implement the law on import and export tax;

– So, Resolution 107/2020/QH14 on extending the agricultural land use tax exemption period specified in Resolution 55/2010/QH12 dated November 24, 2010 as amended by Resolution 28/2016/QH14 dated 11/11/2016.

– Then, Circular 78/2014/TT-BTC guiding the implementation of the corporate income tax law;

– So, Circular 96/2015/TT-BTC providing guidance on corporate income tax in Decree 12/2015/ND-CP detailing the implementation of the Law amending and supplementing a number of articles of the Law on Taxation and amending the Law on Taxation; amending and supplementing a number of articles of Circular 78/2014/TT-BTC, Circular 119/2014/TT-BTC, Circular 151/2014/TT-BTC

Tax incentives for agricultural production enterprises in Vietnam

Regarding import tax and export tax

Pursuant to Article 18 of Decree No. 134/2016/ND-CP, import tax exempted for input materials for agricultural production (specifically, plant varieties; livestock breeds; fertilizers); fertilizers, plant protection drugs that can not produce domestically

Then They are necessary import according to regulations of competent state management agencies); goods imported to create fixed assets of investment projects in the industry occupations or areas eligible for investment incentives as prescribed in Article 16 of the 2016 Import and Export Tax Law.

Regarding value-added tax

So, products of cultivation, husbandry and aquaculture have not processe into other products or have only been preliminarily processed by organizations or individuals; who produce or fish themselves. sold and at the import stage are not subject to value added tax; fertilizer; specialized machinery and equipment in service of agricultural production; offshore fishing vessels, animal feed, poultry and other animal feed that are not subject to value added tax.

Related article: Levels of rural planning in Vietnam

In addition, you can see more articles related to functional areas in accordance with current Vietnamese laws or district, inter-district. You can refer to the article related to this paragraph such as:  Bases for formulating construction planning or review of construction planning.

Regarding personal income tax

• Firstly, Personal income tax exempted for incomes of households and individuals directly engaged in agricultural production, forestry, salt making, aquaculture, and fishing; which have not process into fishery products. other products or only conventionally processed; income from agricultural land conversion of households and individuals allocated by the State for production; ship owners, individuals with the right to use ships and individuals working on ships from the provision of goods and services directly serving offshore fishing and fishing activities.
• Then Households and individuals directly involved in production activities, to be eligible for tax exemption, must satisfy a number of conditions as follows:
• Finally, have the right to use land and use water surface lawfully for production and directly participate in labor in agricultural production, forestry, salt making, and aquaculture. For fishing, they must have the right to own or use ships, boats, fishing means and directly participate in fishing;

• Actually residing in the locality where agricultural, forestry, salt-making; aquaculture production activities take place according to the provisions of the law on residence.

Regarding corporate income tax

Tax exemption for enterprises’ incomes from cultivation, husbandry, farming and processing of agricultural and aquatic products in extremely difficult areas; income from fishing activities.

– Apply a preferential tax rate of 15% to incomes of farming, breeding; and processing enterprises in the fields of agriculture and fishery that are not located in difficult or extremely difficult areas.

– Then, apply the tax rate of 10% for 15 years, tax exemption for no more than 4 year; and 50% reduction of payable tax for no more than 9 subsequent years for enterprise incomes from implementing new investment projects. in areas with extremely difficult socio-economic conditions.

– Apply the tax rate of 17% for 10 years; tax exemption for no more than 2 years; and 50% reduction of payable tax for no more than 4 subsequent years for the enterprise’s income from the implementation of an investment project; in areas with difficult socio-economic conditions.

Regarding agricultural land use tax

Pursuant to Resolution 107/2020/QH14, extending the agricultural land use tax exemption period to the end of December 31, 2025 for the following subjects:

• The entire agricultural land area for research and trial production; the area of ​​land for growing annual crops with at least one rice crop in a year; salt land.
• All agricultural land is allocated by the State to poor households.
• The whole area of ​​agricultural land for the following subjects: Households and individuals; so who are allocated land by the State for agricultural production, including land inherited, donated, or received for transfer of land use rights; households and individuals; who are members of agricultural production cooperatives; farm members and forestry workers; then who have received stable contracted land from cooperatives, state-owned farms, and state-owned forestry farms for agricultural production according to regulations of the Law; households and individuals engaged in agricultural production contribute their agricultural land use rights to establish agricultural production cooperatives; in accordance with the Law on Cooperatives.
• Finally, area of ​​agricultural land allocated by the State to economic organizations, political organizations; socio-political organizations, socio-professional organizations, non-business units and other units are directly using. land use for agricultural production.

Note: So, for the agricultural land area that the State allocates to economic organizations, political organizations; socio-political organizations, socio-professional organizations, non-business units; and other units are managing but not directly using land for agricultural production but assigning them to other organizations; or individuals to receive contracts under contracts for agricultural production; the land shall be recovered according to the provisions of the Land Law; while the State has not recovered land, 100% of agricultural land use tax must be paid.

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