If you are starting a business and want to save costs, tax exemption policies are the “secret weapon” that every startup needs to know.In Vietnam, the government is offering many attractive tax incentives to support new businesses, especially in the fields of technology and innovation.But how to take advantage of them correctly and effectively?This article will reveal everything to you, from specific policies to essential notes that cannot be missed.
Tax exemption policy: “Golden door” for startups
Simply put, tax exemption is when the government allows you to “spend money” without having to pay back a portion (or all) of the tax for a certain period.For startups, this means you have extra money to invest in products, marketing, or hiring people without having to “worry” about taxes.
In Vietnam, the government has many policies to support startups, especially if you are in the technology, creative, or innovation sectors.
Ho Chi Minh City: According to Decree 11/2024, innovative startups are exempt from corporate income tax (CIT) for up to 5 years from the time they start making a profit.
High-Tech Zone: Exempt from CIT for the first 4 years, 50% reduction for the next 9 years, and only pay 10% tax for 30 years.
These incentives not only help you save money but also create opportunities for reinvestment and faster scaling.
Conditions for startups to be exempt from taxes
- Field of activity: Technology, software, renewable energy, education, healthcare, or having a new invention is a big plus.
- Registering correctly: The company must be granted a legal license and sometimes needs to be certified as an “innovative enterprise” by the relevant authorities.
- Investment capital: Some places require a minimum capital, for example, projects starting from 6,000 billion VND and above.
Top 5 tips for startups to not miss out on tax incentives
Self-assessment of eligibility: No one will automatically knock on your door to inform you that you are exempt from taxes.Check if you qualify and file your application when filing taxes.
Clear documentation: Prepare contracts, invoices, and research documents in advance to prove that you are doing something “top-notch.”Lack of paperwork makes it easy to be rejected.
Timing is crucial: Tax exemption usually starts when you make a profit or from the 4th year if there was no profit in the first 3 years.Be precise so you don’t miss out!
Policy update: Tax laws change in the blink of an eye.For example, starting in 2024, there will be a Global Minimum Tax, which could affect old incentives.Keep a close watch to avoid being “caught off guard.”
Ask the experts: If you feel confused, seek help from consulting companies like Acclimatise Vietnam to help you “untangle” the situation.
Benefits when startups take advantage of tax exemptions
- Excess tax revenue can be poured into marketing, products, or hiring more talent.
- Foreign investors are enamoured with tax-advantaged startups, making it easier for you to raise capital.
- Reduce costs, you can lower the selling price while still making a profit, easily “crushing” your competitors.
- The tax exemption policy is a powerful ally that helps Vietnamese startups overcome the challenging early stages.But to take advantage, you need to understand the law, prepare thoroughly, and always stay updated with new information.If you are starting a business or want to optimise costs, start learning today – don’t let this golden opportunity slip away!
H&P GROUP CO., LTD.
Address: 38/26 Nguyễn Văn Trỗi, Ward 15, Phú Nhuận District, Ho Chi Minh City, Vietnam
Hotline: 028.6650.4729
Email: info@hpg-tax.com
