DECREE No.114/1997/ND-CP OF DECEMBER 16, 1997 AMENDING A NUMBER OF ARTICLES OF DECREE No.57-CP OF AUGUST 28, 1993 OF THE GOVERNMENT DETAILING THE IMPLEMENTATION OF THE LAW ON PROFIT TAX AND THE LAW ON THE AMENDMENTS AND SUPPLEMENTS TO A NUMBER OF ARTICLES OF THE LAW ON PROFIT TAX

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Law on Profit Tax adopted by the VIIIth National Assembly of the Socialist Republic of Vietnam on June 30, 1990; the Law on the Amendments and Supplements to a Number of Articles of the Law on Profit Tax adopted by the IXth National Assembly of the Socialist Republic of Vietnam on July 6, 1993;

At the proposal of the Minister of Finance,

DECREES:

Article 1.- To amend a number of articles of Decree No.57-CP of August 28, 1993 of the Government detailing the implementation of the Law on Profit Tax and the Law on the Amendments and Supplements to a Number of Articles of the Law on Profit Tax, as follows:

1- Article 2 is amended as follows:

"Article 2.- The turnover for calculation of taxable profit is the total goods sale money, processing remuneration, commissions, service charges and other turnover amounts, without deducting any expenses of the business establishment during the taxation period".

2- Point g, Item 5, Article 4 is amended as follows:

"g) Taxes eligible for being deducted include export tax, import tax, turnover tax, special consumption tax and those payable taxes and fees directly related to business activities, such as: housing and land levy, natural resources tax, registration fee, traffic toll, etc.

3- Item a, Article 5 is amended as follows:

"a) Business establishments (except for small-scale business households, households engaged in lot trading) shall pay profit tax at the fixed rates on the taxable profit earned in the whole year for each of the following business lines and trades:

- A tax rate of 25% is applicable to electricity generation sector; exploitation sectors: mining, minerals, forest products, aquatic products, water supply in service of production and daily life; metallurgy, machine building: machinery, equipment, transport means and conductors; production of basic chemicals, fertilizer, pesticide and building materials; transport including loading-unloading activities at ports; waste transport; construction including survey and designing activities; agricultural irrigation; newspaper publishing; production of agricultural products by farms, stations and plantations including processing of rubber latex; education and vocational training activities; interests on treasury bills; construction of infrastructure for lease in industrial zones, export processing zones and hi-tech zones.

- A tax rate of 35% is applicable to such industries as: consumer goods production; foodstuff industry; food processing and other production branches.

- A tax rate of 45% is applicable to trading sector, restaurants and services of various kinds.

An establishment engaged in several business lines and trades and subject to different tax rates shall have to separately account its taxable profit earned from each branch or trade and pay profit tax at the tax rate applicable to such branch or trade. In cases where the establishment fails to separately account its taxable profit earned from each branch or trade, the highest profit tax rate for its business branch or trade shall be applied to the total taxable profit of the whole establishment".

4- Item b, Article 6 is amended as follows:

"b) Non-State economic organizations such as joint stock companies, limited liability companies, collective economic organizations with capital mobilized from individuals and organizations shall have to pay profit tax and additional profit tax (if any). The additional profit tax shall be determined on the basis of profit tax rate and profit subject to the additional profit tax. The profit subject to the additional profit tax is profit remaining after payment of profit tax at the fixed tax rate, minus (-) investment fund".

Article 2.- This Decree applies to the final settlement of profit tax from 1997. The previous stipulations which are contrary to this Decree are now annulled.

Article 3.- The Ministry of Finance shall guide the implementation of this Decree.

On behalf of the Government

For the Prime Minister

Deputy Prime Minister

NGUYEN TAN DUNG