How does Decree 11/2024/ND-CD regulate corporate income tax exemption and personal income tax exemption in Ho Chi Minh City?

Decree 11/2024/ND-CD stipulating corporate income tax exemption and personal income tax exemption in Ho Chi Minh City?

On February 2, 2024, the Government issued Decree 11/2024/ND-CD stipulating loan interest, reasonable profits, payment methods, and settlement of investment projects under BT contracts; corporate income tax exemption, personal income tax exemption in Ho Chi Minh City.

Decree 11/2024/ND-CD detailing a number of articles of Resolution 98/2023/QH15 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Ho Chi Minh City (hereinafter referred to as Resolution 98/2023/QH15) including:

– Loan interest after the construction period, reasonable profit, payment method, settlement of investment projects under BT contracts (hereinafter referred to as BT projects) in Ho Chi Minh City according to the provisions of Point d, Clause 5, Article 4 Resolution 98/2023/QH15;

– Exemption from corporate income tax and personal income tax according to the provisions of Points a and b, Clause 1, Article 8 Resolution 98/2023/QH15.

Decree 11/2024/ND-CD does not stipulate the following contents:

– Loan interest during the construction period of the BT project shall comply with the provisions of construction law;

– Ratio of equity capital mobilized by investors to implement real BT projects according to the provisions of Article 77 of the Law on Investment 2020 according to the public-private partnership method.

Decree 11/2024/ND-CD applies to the following subjects:

– Parties in the BT contract, agencies, organizations and individuals related to investment activities of BT projects in Ho Chi Minh City.

– Enterprises, agencies, organizations, and individuals related to innovative start-up activities and creative startups in Ho Chi Minh City.

Organizations that have income from transferring capital contributions and the right to contribute capital to creative startups are exempt from corporate income tax, right?

Pursuant to Clause 2, Article 13 of the Decree 11/2024/ND-CP stipulates as follows:

Exemption from corporate income tax

..

2. During the time Resolution No. 98/2023/QH15 is in effect, organizations that have income from transferring capital contributions and the right to contribute capital to creative start-up enterprises in Ho Chi Minh City are exempt from corporate income tax on this income.

Creative start-up enterprises in Ho Chi Minh City specified in this clause must meet the regulations of the People’s Council of Ho Chi Minh City in the field of priority areas; criteria, conditions, and content of innovative start-up activities.

Income from capital transfer and capital contribution rights specified in this clause is income derived from transferring part or all of the capital and capital contribution rights to innovative start-up enterprises in Ho Chi Minh City (including cases of selling businesses), except for income from transferring stocks, bonds, fund certificates and other securities according to regulations. determined.

Thus, based on the above regulations, during the period when Resolution 98/2023/QH15 takes effect, organizations that have income from transferring capital contributions and the right to contribute capital to creative startups in Ho Chi Minh City are exempt from corporate income tax on this income.

Individuals who have income from transferring capital contributed to creative startups are exempt from personal income tax, right?

Pursuant to the provisions of Article 14 of Decree 11/2024/ND-CD stipulate as follows:

Exemption from personal income tax kernel

1. During the period of Resolution No. 98/2023/QH15 in effect, individuals with income from the transfer of capital contributions and the right to contribute capital to creative start-up enterprises in Ho Chi Minh City are exempt from personal income tax on this income.

Creative start-up enterprises in Ho Chi Minh City specified in this clause must meet the regulations of the Ho Chi Minh City People’s Council on the field of priority areas; criteria, conditions, and content of innovative start-up activities.

Income from capital transfer and capital contribution rights specified in this Clause is income derived from transferring part or all of the capital and capital contribution rights to innovative start-up enterprises in Ho Chi Minh City (including cases of sale of businesses), except income from transfers of stocks, bonds, fund certificates and other types of securities as prescribed.

In case of sale of the entire enterprise by individuals. Individuals who are owners in the form of transferring capital attached to real estate shall declare and pay personal income tax according to real estate transfer activities.

2. Determination of income from capital transfer, capital contribution rights and declaration to tax authorities is carried out in accordance with the law on personal income tax and the law on tax administration.

Thus, based on the above regulations, during the time when Resolution 98/2023/QH15 is in effect, individuals with income from transferring capital contributions and the right to contribute capital to creative start-up enterprises in Ho Chi Minh City are exempt from personal income tax on this income.