Education and training are focused businesses on developing in Vietnam via various incentive policies, including tax policies. The Vietnamese Government has issued a number of regulations to support businesses to maintain and restore business operations as it is affected by the Covid-19 pandemic, including the education and training sector. Therefore, currently, businesses operating in the field of education and training are being applied the following tax regulations:
Firstly, according to the provisions of the Law on Corporate Income Tax (CIT), the incentive tax rate of 10% is applied for the income that the enterprise has been carrying out socialization activities in the period of operation in the education and training sector. Along with, in case an enterprise implements a new investment project in the field of socialization of education and training in an area with difficult or extremely difficult socio-economic conditions, it is entitled to tax exemption for not more than 4 years and 50% reduction of the maximum amount of tax payable for the next 9 years; enterprises implementing new investment projects in the field of socialization of education and training in other localities are entitled to 4 years tax exemption and 50% reduction of the maximum amount payable tax for the next 5 years. In addition, enterprises are also entitled to CIT exemption for: (1) The undivided income of establishments carrying out in the field of socialization of education and training to be left to invest in developing such establishments according to regulations of specialized law; and (2) Grants received for educational use. For businesses and organizations that make educational expenses, they are also included in deductible expenses when determining taxable income.
Secondly, according to the provisions of the Law on Value Added Tax (VAT), teaching and vocational training activities that are not subject to VAT include: Teaching and vocational training; Publishing, importing and distributing newspapers, magazines, specialized bulletins, political books, textbooks, legal documents, scientific and technical books, etc. reduce costs and price of educational products and services.
Thirdly, according to the provisions of the Laws on Export and Import Tax, and the Law on Non-agricultural Land Use Tax, education is an investment incentive sector. Therefore, enterprises in the field of education can apply incentive policies such as import tax exemption to create fixed assets; import tax exemption for goods imported exclusively for education purposes that cannot be produced in the country; exempting from tax on the use of non-agricultural land for the land of the establishment performing “socialization” for activities in the field of education;
Fourthly, according to the provisions of Decree No. 69/2008/ND-CP dated May 30, 2008 and Decree No. 59/2014/ND-CP dated June 16, 2014, socialization projects in the field of education and training are entitled to incentives for the entire duration of the project, of which the maximum incentive level is an exemption from land rent and the minimum level is equal to the incentive level prescribed by the law on land and law on investment.
Fifth, according to Resolution No. 43/2022/NQ-QH15 dated January 11, 2022, the VAT rate is reduced by 2% for a certain group of goods and services that are currently applying the 10% VAT rate. Activities in the field of education are subject to 10% VAT, from January 1, 2022 to December 31, 2023, this VAT rate will be only 8%. At the same time, this Resolution is included in deductible expenses when determining taxable income for donations and sponsorships of businesses and organizations for Covid-19 epidemic prevention and control activities in Vietnam.
In addition, implementing Resolution No. 43/2022/QH15, the Ministry of Finance is also studying and developing to submit to the Government and the Prime Minister for consideration according to its competence the continued implementation of support solutions on taxes, fees, charges and land rent in 2022, such as: extension of tax payment deadline and land rent; reducing the land rent payable in 2022; The Ministry of Finance also continues to reduce the collection of many fees and charges according to its authority in 2022.
Otherwise, the Ministry of Education and Training has proposed that “allowing public educational institutions that have not yet made their own recurrent expenditures do not have to pay CIT on regular tuition fees”. This proposal has been recognized by the Ministry of Finance, in addition to conducting a report on reviewing, evaluating and proposing amendments to the Law on CIT, to report to the Government and the National Assembly Standing Committee for consideration and decision.
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Note: This article is for informational purposes only and it is not a legal advice. The content of the article represents its own of TTVN Legal, it subject to change without prior notice.