Ho Chi Minh City offers 5-year tax exemption for innovative startups

Resolution No. 59 of the Ho Chi Minh City People's Council specifies tax exemption policies for innovative startup activities under the Law on Urban Development.

A project qualifies as an innovative startup if it creates a new product, service or business model, or makes significant improvements to existing products, services or business models.

Personal income tax is also waived for five consecutive years on salaries and wages earned by experts, scientists, individuals with exceptional talents and innovative startup founders working at innovative startups, science and technology organizations, innovation centers and innovative startup support organizations.

To qualify for the corporate income tax exemption, an innovative startup must have its headquarters in Ho Chi Minh City and hold a valid certificate recognizing it as an innovative startup.

Innovation centers must also be headquartered in the city and hold valid recognition certificates. Innovative startup support organizations must have their headquarters in the city.

Innovative startup support centers must hold valid recognition certificates, while other organizations must provide documents proving that they engage in innovative startup support activities.

Experts must hold valid certificates recognizing them as innovative startup support experts and have employment contracts or other lawful documents proving their employment and income are related to innovative startup activities.

Scientists and individuals with exceptional talents must be recognized in accordance with regulations or accepted, selected and recognized by Ho Chi Minh City.

They must also have contracts or other documents proving their employment and income are related to innovative startup activities.

Innovative startup founders must be founding members or co-founders of an innovative startup based in Ho Chi Minh City and hold valid recognition certificates.

Under the resolution, eligible taxpayers are not required to complete separate tax procedures to receive the exemptions. They must declare and determine the amount of tax exempted themselves and retain documents proving their eligibility in accordance with tax regulations.

The Ho Chi Minh City People's Committee has assigned the municipal Department of Science and Technology to monitor, inspect and evaluate implementation of the policy, while coordinating efforts to detect, prevent and handle cases of abuse.

Tax authorities will coordinate in providing guidance, while the people's committees of wards, communes and special zones will disseminate information and guide organizations and individuals in complying with the regulations.