Can a New Project Inheriting Assets from an Old Project Enjoy Corporate Income Tax Incentives?

Issued Basis: Official Letter No. 2327/TCT-CS dated June 3, 2024, by the General Department of Taxation regarding corporate income tax policies.

Based on Clause 3, Article 10 of Circular No. 96/2015/TT-BTC dated June 22, 2015, issued by the Ministry of Finance, which provides guidance on corporate income tax (CIT) and amends and supplements Clause 5, Article 18 of Circular No. 78/2014/TT-BTC (as amended and supplemented by Article 5 of Circular No. 151/2014/TT-BTC). According to this circular:

• New investment projects eligible for CIT incentives are defined as those projects granted the first Investment Certificate from January 1, 2014, and generating revenue after being granted the Investment Certificate.

• Independent investment projects, even if their investment capital is less than VND 15 billion and not in the list of conditional investment sectors, with an Investment Certificate from January 1, 2014, are also considered new investment projects.

• New investment projects eligible for CIT incentives must be granted an Investment License or Investment Certificate by a competent state agency or permitted to invest in accordance with the law on investment.

In this context, if a company has an investment project that inherits assets, business locations, and business lines, and utilizes machinery and equipment from an existing project to continue its production and business activities, this project is not considered a new investment project according to tax laws. Therefore, it does not meet the conditions for enjoying tax incentives for new investment projects as stipulated in Clause 3, Article 10 of Circular No. 96/2015/TT-BTC.

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