Official Letter No. 962/CCTKV.XVI-QLDN4-TNI dated June 11, 2025, issued by the Sub-Department of Taxation of Region 16 regarding Corporate Income Tax Incentives and the Recognition of Gains/Losses from Foreign Exchange Rate Differences upon Finalization of Corporate Income Tax

by KMC Consulting Company Limited

Pursuant to:

  • Article 3 of the Law on Value-Added Tax No. 13/2008/QH12;
  • Clause 2, Article 3 and Article 10 of the Law on Corporate Income Tax No. 14/2008/QH12, as amended and supplemented under Law No. 32/2013/QH13;
  • Articles 13 and 18 of the Law on Corporate Income Tax No. 14/2008/QH12, as amended and supplemented under Clauses 7 and 12, Article 1 of Law No. 32/2013/QH13;
  • Article 15 and Clause 3, Article 19 of Decree No. 218/2013/NĐ-CP, as amended and supplemented under Article 1 of Decree No. 12/2015/NĐ-CP;
  • Clause 3, Article 7 and Point a, Clause 4, Article 8 of Decree No. 126/2020/NĐ-CP dated October 19, 2020, of the Government;
  • Article 8 of Decree No. 123/2020/NĐ-CP, as amended and supplemented under Clause 5, Article 1 of Decree No. 70/2025/NĐ-CP;
  • Article 22 of Circular No. 78/2014/TT-BTC dated June 18, 2014, and Clause 2, Article 10 of Circular No. 96/2015/TT-BTC dated June 22, 2015;
  • Clause 2, Article 6 of Circular No. 78/2014/TT-BTC, as amended and supplemented under Article 4 of Circular No. 96/2015/TT-BTC;
  • Article 69 of Circular No. 200/2014/TT-BTC, as amended and supplemented under Article 1 of Circular No. 53/2016/TT-BTC;
  • Clause 2, Article 5 of Circular No. 96/2015/TT-BTC.

Based on the above regulations , the following guidance is provided:

  • Export processing enterprises that engage in real estate transfers are subject to Corporate Income Tax (CIT) and Value-Added Tax (VAT) in accordance with current laws. The applicable tax rate shall be determined based on the actual nature of the transaction.
  • In cases where, during the same period, an enterprise is eligible for multiple tax incentive rates applicable to the same income, the enterprise may choose to apply the most favorable incentive based on the actual business circumstances.
  • Enterprises shall, based on the actual transactions, recognize foreign exchange differences as either income or expenses related to production and business activities.. The timing for recognizing foreign exchange differences shall be determined at the point of preparing the financial statements, in accordance with relevant legal regulations.

For more detailed information about this or related Tax Advisory, please don't hesitate to contact us.
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