Proposed Tax Cuts for Media Industry and Investment Focus

The National Assembly’s Committee on Culture and Education has suggested a significant reduction of corporate income tax for the media sector to 10%. This is aimed at aiding the struggling journalism field, which has faced a downturn in advertising revenue.

During the presentation, Deputy Finance Minister Cao Anh Tuan emphasized the government’s push for corporate tax benefits, especially as a strategy to enhance investment in underprivileged regions.

The proposal advocates for a 10% corporate tax rate for new investment projects within special economic zones for 15 years, marking a considerable drop from the current tax rates. This incentive aims to pull investments into areas requiring economic revitalization.

Nguyen Dac Vinh, Chairman of the Culture and Education Committee, shared that after collaboration with the Ministry of Information and Communications, they endorsed a standardized 10% corporate tax for the media sector encompassing both digital and broadcast platforms, akin to the rate for print media.

“Vietnamese media, predominantly state-managed, relies heavily on ad revenue, which has dramatically decreased. Therefore, our proposal for a unified 10% tax rate addresses this challenge for the media landscape,” Vinh elaborated.

The draft law also recommends a special 15% tax rate for digital media, radio, and television, which reflects a 5% decrease from current rates. Meanwhile, printed newspapers will continue to benefit from the 10% tax rate.

Beyond media, the draft law proposes incentives for other sectors. Businesses that assist small and medium enterprises, offer incubation facilities, and operate co-working spaces for startups may be eligible for a 17% tax rate over the next 10 years.

Amendments to the law are set to impact technologies, agriculture, and the production of supporting industrial goods.

Furthermore, the legislation aims to clarify the tax responsibilities of foreign businesses earning income in Vietnam, regardless of their physical presence. This includes those involved in e-commerce and digital services.

The regulation stipulates that revenues generated within Vietnam will be subject to local tax laws, even if the businesses do not have an established office in the country.

Nevertheless, the Finance and Budget Committee has raised concerns regarding the practicality of this measure. Chairman Le Quang Manh pointed out that the present definition of “permanent establishment” fails to capture the modern operational realities of many foreign companies that function digitally without physical locations.

“It is essential to refine these regulations to streamline the taxation of foreign e-commerce platforms and ensure fair taxation of international suppliers operating in Vietnam,” Manh noted.

The Committee urged for more in-depth analyses to enhance tax regulations, particularly focused on the implications for international companies within Vietnam’s expanding digital economy.