In the Submission to the Government on the development of a new Personal Income Tax Law project, the Ministry of Finance proposed amending and supplementing the provisions on tax exemption for income from:
First transfer of emission reduction credits and carbon credits after issuance.
Income from green bond interest and first green bond transfer after issuance.
The Ministry of Finance believes that tax exemption is necessary to encourage the development of clean technology investment projects that are environmentally friendly, contributing to reducing greenhouse gas emissions and achieving environmental protection goals.
Encourage the development of carbon markets
According to the Ministry of Finance, developing the carbon credit market is an important solution to achieve international climate commitments. The Law on Environmental Protection 2020 clearly stipulates the mechanism for exchanging and transferring carbon credits, along with support policies to promote the development of this field.
Countries such as Thailand, Malaysia, and China have introduced tax exemptions on income from carbon credits, while the US and India offer tax incentives for green bonds. For example, in the US, income from green bonds issued by local governments is tax-free.
Promoting sustainable development
To promote green growth goals and fulfill commitments at COP26, the Ministry of Finance believes that Vietnam needs to study and apply similar international policies. Income from emission reduction credits, carbon credits and green bonds should be exempted from tax to encourage investment in environmental protection activities.
The draft Law on Corporate Income Tax (amended) also proposes tax exemption for these incomes, creating more favorable conditions for businesses and individuals to participate in green economic development.
This tax exemption, if approved, will contribute to bringing Vietnam closer to the goal of sustainable development, reducing carbon emissions and protecting the environment.
