Start-ups and other specified enterprises in Ho Chi Minh City exempt from corporate and personal income tax

8 April 2024

On 2 February 2024, the Vietnam Government issued Decree No. 11/2024/ND-CP on Loan Interest, Fair Return, Payment Methods, Settlement of Investment Projects under BT Contracts, Exemption from Corporate Income Tax, Personal Income Tax in Ho Chi Minh City (“Decree”).

The Decree implements part of Vietnam National Assembly Resolution No. 98/2023/QH15 (“Resolution 98”) which provides for the introduction of certain regulations and policies for the development of Ho Chi Minh City (“HCMC”). Resolution 98 came into effect on 1 August 2023 and replaced a previous resolution for the same purposes issued in 2017. Specifically, the Decree implements:

  • post-construction interest, fair return, payment methods, settlement of investment projects in Build-and-Transfer contracts (“BT projects”) in HCMC; and
  • exemption from corporate income tax (“CIT”) and personal income tax (“PIT”) in HCMC for specified businesses.

The Decree applies to parties to BT projects, agencies, organisations, and individuals relevant to investment in BT projects in HCMC and to enterprises, agencies, organisations, and individuals relevant to renovation start-ups and business start-ups in HCMC.

Corporate income tax exemption

Article 13 of the Decree provides that the following will be eligible for exemption from CIT subject to compliance with applicable regulations of HCMC People’s Council on priority sectors, criteria, conditions, and details of business start-up and renovation operations:

  • Business start-up enterprises;
  • Science and technology organisations;
  • Renovation centres;
  • Intermediate organisations assisting business start-ups; and
  • Renovation generating revenues from business start-ups and renovations in HCMC.

CIT exemptions granted under the Decree will last for five years from the date on which eligible enterprises generate CIT payable from start-up and renovation operations.

Organisations generating revenue from the transfer of capital and right to capital contributions to business start-up enterprises in HCMC will be eligible for CIT exemption for these revenues, with the exception of revenues generated from the transfer of shares, bonds, fund certificates, and other securities.

Personal income tax exemption

Individuals generating revenues from transfer of capital, right to capital contributions to business start-up enterprises in HCMC will be eligible for an exemption from PIT for these revenues.

Further guidelines on the implementation of these tax exemption policies are expected in due course.