Friday, July 19, 2024 10:13:53 AM - Markets open
VN-INDEX 1,276.31 +1.87/+0.15%
HNX-INDEX 241.82 -0.67/-0.28%
UPCOM-INDEX 97.47 -0.15/-0.15%
MOF proposes exemption on corporate taxes on income from green bond interest and carbon credits
vietnamnews - 7/5/2024 11:21:23 AM
 (0 ratings. You must sign in to rate.)
The Ministry of Finance is proposing amendments to the Law on Corporate Income Tax to encourage environmental protection and sustainable development
 
 
The proposal aims to protect the environment and promote sustainable development in line with the global trend of using tax policies to incentivise environmentally friendly practices. — Photo courtesy of pace.edu.vn
 
The Ministry of Finance is proposing amendments to the Law on Corporate Income Tax to encourage environmental protection and sustainable development.
 
These amendments stipulate that firms will be exempt from corporate taxes on income from green bond interest and carbon credits.
 
The proposal aims to protect the environment and promote sustainable development in line with the global trend of using tax policies to incentivise environmentally friendly practices.
 
Several countries, including Mexico, India and the United States, have implemented tax policies related to corporate income to support environmental protection and sustainable development.
 
In the United States, income generated from green bonds issued by local governments is exempt from income tax; in Thailand there are policies to exempt or reduce corporate income tax on income derived from carbon credit transfers.
 
Carbon credits provide an economic incentive for reducing greenhouse gas emissions by allowing organisations or countries to trade emissions permits. This market-based approach encourages emission reductions in a cost-effective manner and promotes sustainable development.
 
Việt Nam's Law on Environmental Protection (No. 72/2020/QH14), passed by the National Assembly in 2020 and effective on January 1, 2022, includes regulations on carbon credits and exchange and transfer mechanisms. These regulations provide a legal framework for the implementation and management of carbon credit activities in the country. By setting out supporting policies and mechanisms, the State aims to encourage the development of carbon market and promote environmental protection efforts.
 
In addition to carbon credits, the Law on Environmental Protection also addresses the issue of green bonds.
 
The Ministry of Finance (MoF) has assessed the potential impact of tax exemption for interest income from green bonds and green bond transfer income. It is estimated that if successful issuance of green bonds were to occur, with a scale of 0.17- 0.5 per cent of the bond market size, the amount of corporate income tax exempted would be approximately VNĐ100 billion-VNĐ300 billion (between US$4 million-$12 million).
 
The ministry considers this reduction in State budget revenue to be relatively small, constituting a very small proportion of the total State budget revenue from current corporate income tax.
 
In addition, it has identified that the current Corporate Income Tax Law exempts tax on income from transferring emission reduction certificates (CERs) of enterprises that are granted such certificates. It has also recognised the existence of voluntary emission reduction certificates (VERs), which serve a similar purpose, but tax on income from the transfer of VERs not exempted.
 
Therefore, finance officials have suggested the need to amend the regulations in the Law on Corporate Income Tax to encompass income from the tax-free transfer of emission reduction certificates, including both CERs and VERs. — VNS
 
Read original article here
Newer News
18/07 Petrol distributors not allowed to buy from each other: Draft
18/07 MoF considers withdrawing 50 per cent car registration fee reduction proposal
17/07 H1 State budget revenue increases over 17%: MoF
17/07 HCM City Tax Department refunds VNĐ4.7 trillion of VAT
16/07 Mobile Money users in Vietnam rise rapidly
16/07 Cheap money period in Vietnam forecast to come to an end
16/07 Taxing gold buyers is a tax-on-tax, say experts
15/07 Compulsory e-signature might be a cost burden: banking association
15/07 PM asks SOEs to consider hiring foreign CEOs to improve efficiency
15/07 Vietnamese cashback app aims for 10 million users by 2025
Older News
04/07 Inflation target is achievable, wage increase expected not to have significant impact on prices
04/07 Ha Noi collects over $390m in taxes from e-commerce
03/07 New law tightens cross-ownership in credit institutions
02/07 Delays loom for trillions of đồng in bond payments in June
02/07 New policy on reducing credit limits to have impacts on big banks, groups
01/07 8% VAT rate extended to the end of this year
01/07 Central bank works to raise interbank rates and ease forex market
29/06 Finance ministry cuts fees to aid businesses, citizens from July 1
29/06 Inflation a concern following salary increases
29/06 IFC and Welcome Financial Group collaborate to tackle non-performing loans in Việt Nam
 
Newsletter Signup
Top Stories
VCCI recommends mineral mining rights be granted through auction and bidding
Central bank works to raise interbank rates and ease forex market
Inflation a concern following salary increases
National Council for Sustainable Development established
Việt Nam, Cambodia look forward to $20 billion trade
Market Update
Last updated at 10:04:53 AM
VN-INDEX 1,276.31 +1.87/+0.15%
Real-time chart
Top 5 Actives
Top 5 Gainers
Top 5 Losers
My Favorite Quotes
Your most recently viewed tickers will automatically show up here if you type a ticker in the Get Quotes box on the top of the page.
Company Research
Type in the symbol above for thorough background information, key statistics and financial information.
Stock Sectors
We continuously improve our services, here are the latest updates...
Portfolio
Allow you to monitor a customised group of securities. You can set up multiple Portfolios to help you better manage your investments.
Trigger Alerts
Get up-to-date alerts delivered directly to your email address.
Stock Screener
Allow you to filter the market and find exactly what sort of company you are looking for.
Live Terminal
Get instant access to FREE REAL-TIME streaming quotes for hundreds of stocks from HOSE, HNX and UPCOM exchanges.