REVIEW
of
FINANCE -
November, 2018
7
comes into effect since January 1
st
2018.
Achievements
The released tax policies encourage and
support SMEs to solve their capital problems,
expand business operation and apply technology.
Extension of tax payment and tax reduction
enables SMEs to use tax amounts as investment
capital, reduce interest payment on bank loans,
reduce costs and lower price and promote product
sales. The reduction of business income tax rate
from 22% down to 20% is a remarkable step
helping enterprises increase after-tax earnings
and resources for business investment expansion.
Tax policies contribute to stabilize and
develop business operation of the SMEs. Tax
system of Vietnam has been built specifically;
each type of tax has been built with relevant tax
law such as: Value Added Tax Law, Business
Income Tax Law, Export and Import Tax Law,…
These laws prevent overlaps in tax regulations.
Variety of tax regulations have been adjusted and
improved to be more simplified and transparent
to facilitate SMEs in their business operation and
avoid tax frauds and tax invasion. Mechanism
and incentives are more effective to promote the
activities of enterprises.
In addition, tax policies contribute to attract
foreign investment, enabling SMEs to mobilize
more capital for their business. The promulgation
of a tax policy system in line with international
practices, meeting the requirements of integration
helps attract investment capital from abroad. It
TAX POLICIES TO SUPPORT SMALL ANDMEDIUM-SIZED
ENTERPRISES INVIETNAM
ASSOC. NGUYEN XUAN THACH, PhD. -
Academy of Finance*
Small and medium-sized enterprises (SMEs) account for more than 97% of the total number of active
enterprises, contribute to 50% of GDP and create 52% of employment each year. SMEs are proving their
important role in the economy. The deep globalization and international integration process bring about
more opportunities for these enterprises: market expansion, technology transfer, management capacity
building... However, these SMEs are facing serious challenges during their business operation and
intensive competition in both local and international markets.
Keywords: Tax, policies, SMEs, tax reduction, business operation
Received: June 7
th
, 2018
Revised: September 19
th
, 2018
Accepted for publication: October 3
rd
, 2018
Practical tax policies for SMEs in Vietnam
Released tax policies
In 2015, tax policies were applied to support
market and facilitate SMEs by means of the
Decree No. 12/ND-CP dated February 12
nd
2015
of the Government and instruction documents
regulating more transparent and favorable tax
incentives, conditions, tax allowances towards
enterprises and particularly the SMEs.
Since January 1
st
2016, all enterprises had to
follow a tax rate of 20% according to the Decree
No. 218/2013/ND-CP, The Law No. 106/2016/
QH13 dated April 6
th
2016 modified and
supplemented provisions of the Value Added
Tax Law; Special Consumption Tax Law and Tax
Administration Law.
The Resolution No. 35/NQ-CP dated May 16
th
of the Government on enterprise support and
development by 2020was assigned to theMinistry
of Finance to prepare report and submit to the
Parliament on addressing difficulties of tax to the
enterprises in 2016; settling delayed tax payments
for enterprises; studying and recommending
business income tax rate for SMEs.
The Law on SMEs Tax Support No. 04/2017/
QH14 dated June 12
nd
2017 was promulgated by
the Parliament regulating principles, contents
to support SMEs; responsibilities of related
agencies, organizations and individuals. The law
* Email:
