Preschool Tax Exemptions: A Simple Guide

“Spare the rod and spoil the child,” as the saying goes. Every parent wishes to give their children the best, a solid foundation from their very first steps. And preschool – a second home – is where those tender dreams are nurtured. However, opening a preschool is not a simple task; the paperwork can be overwhelming, and tax exemptions are a major concern for many. Understanding these worries, this article will provide you with the most helpful information about preschool tax exemption documents.

How to open a preschool is not easy, especially when you are faced with piles of paperwork and legal procedures.

Types of Taxes Preschools Must Pay

According to current regulations, preschools are mainly divided into two types: public and private. Each type has different regulations regarding tax obligations.

Public Preschools

These are schools invested in and managed by the State, operating on a non-profit basis. Therefore, public preschools are exempt from corporate income tax.

Private Preschools

These are schools established and managed by organizations or individuals, operating on a tuition-based model. This type is required to fulfill all tax obligations like businesses, including:

Corporate Income Tax: Applied at a tax rate of 20% on after-tax profit.
Value Added Tax (VAT): Applied at a tax rate of 5% on revenue.
Personal Income Tax: Applied to teachers and staff working at the school.

Conditions for Preschool Tax Exemption

Good news for education investors: private preschools can fully enjoy attractive tax exemption policies if they meet all of the following conditions:

Possess an operating license issued by a competent authority.
Do not distribute profits in any form.
Have tuition fees approved by a competent state agency.
Use revenue to reinvest, develop facilities, and improve the quality of education.

Ms. Lan, principal of Hoa Huong Duong Preschool in Hue, shared: “Initially, I was very worried about tax issues. But after careful research, I realized there are many supportive policies for private preschools like ours. Thanks to that, the school can focus on investing in facilities, improving the quality of education, and providing children with the best learning environment.”

Preschools in Hue are known for their quality training and are always at the forefront of applying educational support policies.

Documents for Preschool Tax Exemption Application

To enjoy tax exemption incentives, preschools need to prepare a complete set of documents as required, including:

Application form for tax exemption.
Copy of Business Registration Certificate.
Copy of Operating License.
Financial statements for the most recent year.
Documents proving eligibility for tax exemption (if any).

Important Notes When Applying for Tax Exemption

Understand the tax laws and regulations thoroughly.
Prepare complete and accurate documents.
Submit documents on time.
Regularly update on the latest circulars and decrees regarding tax policies.

Understanding preschool tax exemption documents not only helps you reduce financial burdens but also demonstrates your responsibility to society. Because investing in education is investing in the future.