Incentives of investment

I. INCENTIVES AND INVESTMENT SUPPORT

1. Investment Incentives

 

1.1 Subjects of investment incentives

 

a. Investment projects belong to the branches of investment incentives or lines of special investment incentives as provided for in the Annex I, Decree 118;

b. For investment projects with at least VND6000 billion capital size, it is required to disburse at least VND6,000 billion within 03 years from the date of issuance of the CIR or investment policy decisions. Investment projects, which can meet these conditions, will be received investment incentives as provided for investment projects in areas of which socio- economic condition is extremely difficult;

c. Investment projects in rural areas, which employ 500 or more workers. Investment projects which meet these conditions, will be received investment incentives as provided for investment projects in areas of which socio- economic condition is extremely difficult;

d. High-tech enterprises, scientific and technological enterprises, science and technology organizations;

e. New investment projects and expansion projects.

Investment projects which meet the conditions of investment incentives at various levels will be applied the highest level of incentive.

 

1.2 Lines of investment incentives

 

a. Hi-tech activities, industrial products supporting for high-tech, research and development;

b. Production of new materials, new energy, clean energy, renewable energy, manufacturing products with the added value of 30% or higher, energy-saving products;

c. Production of electronic products, key mechanical products, agricultural machinery, automotive, shipbuilding;

d. production of Industrial products supporting for textile industry, leather and footwear;

e. manufacturing information technology products, software, digital content;

f. Aquaculture, processing of agricultural, forestry and aquatic products; forestation; salt production; fishing and fishing logistics services; manufacturing plant varieties and animal breeds; biotechnology products;

g. Collecting, processing, recycling or reuse of waste;

h. Investment in development, operation and management of infrastructure projects; development of public passenger transport in urban areas;

i. Preschool education, general education, vocational education;

j. Healthcare; drug production, drug materials; vaccines and medical products, traditional medicines; biotechnology to produce new drugs;

k. Investments into fitness centers, sporting event hall for the disabled or professional athletes; protection and promotion of cultural heritage values;

l. Investments into geriatric centers, psychiatric, treatments to patients who are affected by Agent Orange; care facilities for the elderly, the disabled, orphans, unaccompanied children;

m. People credit institutions, microfinance institutions.

 

1.3 areas of investment incentives

 

a. the areas have the difficult socio - economic condition, the areas have the extremely difficult socio- economic condition (Annex II, Decree 118).

b. Industrial zones, export processing zones, high-tech zones and economic zones (Annex II, Section 55 of Decree 118).

 

1.4 Adjustment of investment incentives

 

a. Where investment projects meet the conditions to be entitled to receive more investment incentives, investors are entitled to receive those investment incentives in the remaining time;

b. Investors are not entitled to investment incentives under the provisions of the certificate of investment registration, the written investment policy decision in the case which investment projects do not meet the conditions for investment incentives stipulated in Certificate for investment registration, investment policy decisions. Where investment projects meet the conditions of other investment incentives, investors are entitled to investment incentives according to those conditions;

c. Where in a certain time, investment projects do not meet the conditions of investment incentives, the investor does not enjoy investment incentives for the time that the project does not meet the conditions of investment incentives;

d. an economic organizations have just established or investment projects is performed by shifting forms of economic organization, change of ownership, division, separation, merger, consolidation, transfer of investment projects which are inherited the investment incentives of the investment project before conversion, division, separation, merger, consolidation or transfer.

 

1.5 Form of investment incentives

a. Incentives of financial policies.

 

(i)Corporate Income Tax ("CIT")

Tax rate

Conditions

Applied duration

Exemption or reduction of CIT

Legal foundation

Exemption

Reduction

10%

  • Enterprise Income is from implementation of new investment projects in the areas with the extremely difficult socio-economic condition, economic zones, high-tech zones;
  • Enterprise Income from implementation of new investment projects in the fields as specified in point b, paragraph 1, article 15 of Decree 218/2013 / ND-CP dated December 26th 2013;
  • Enterprise Income from implementation of new investment projects in the fields of environmental protection;
  • high-tech enterprises, agricultural enterprises using high technology applications;
  • Enterprise Income from implementation of new investment projects in the manufacturing sector to meet one of two criteria: (i) projects with at least VND6000 billion size, it is required to disburse not  more than 3 years after the investment project is licensed and has a total turnover of at least VND10,000 billion/year no later than 3 years since the project has turnover and (ii) the projects with at least VND6000 billion size, disbursement shall not exceed 3 years since the investment project is license and use over 3000 workers, who are contracted to work full time, at the latest 3 years after the project has revenue.

15 years from the first year when the project has of taxable income

4 years

50% reduction not more than 9 subsequent years

 

 

 

 

 

 

 

 

 

  • Point a, item 1, item 2, article 15 and article 16 Investment Law No. 67;

 

  • Item 1, article 15 and

item 1, article 16

NĐ 218/2013/NĐ-CP on December 26th 2013 26/12/2013;

 

  • Item 1, article 19 and item 1, article 20

TT 78/2014/TT-BTC

On June 18th 2014.

10%

  • Enterprise Income from socialization activities in the field of education - training, vocational training, health, culture, sports and the environment;
  • income from publishing; printing newspapers;
  • Enterprise Income from investment project – trading social houses (selling, lease, hiring - purchasing);
  • Enterprise Income from: planting, caring and protecting forests, aquaculture and in the areas with the socio-economic difficulties; production, multiplication and creating a new variety of plant, animals; investments into preservation of agricultural products, fisheries and food.

The whole duration of the investment project

  
  • Item 2, article 15

NĐ 218/2013/NĐ-CP ngày 26/12/2013;

 

  • item 3, article 19

TT 78/2014/TT-BTC

June 18th 2014.

20%

  • Enterprise Income from implementation of new investment projects in geographical areas with socio-economic difficulties;
  • Enterprise Income from implementation of new investment projects: Production of high-grade steel; producing energy-saving products; manufacturing machinery and equipment for agricultural production, forestry, fisheries and salt; manufacturing irrigation equipment; production and refining of animal feed, poultry and aquatic products; development of traditional industries. From January 1st 2016, the enterprise income tax rate is 17%.
  • Enterprise Income from implementation of new investment projects in industrial zones, industrial parks except in areas with socio-economic advantages.

15 years from the first year when the project has of taxable income

2 years 

50% reduction not more than 4 subsequent years

 

 

  • Pointa, item 1, item 2, article 15 and article 16 Investment Law No.67;

 

 

  • Item 3, article 15 and

item 3, article 16

NĐ 218/2013/NĐ-CP on December 26th 2013;

 

  • Item 4, article 19 and

item 3, article 20

TT 78/2014/TT-BTC

On June 18th 2014.

 

(ii) Import and export tax rate

 

Pursuant to Decree No. 87/2010 / ND-CP on August 13, 2010 the following cases are exempt from import and export taxes as follows:

1. Goods temporarily imported for re-export or temporarily exported for re-import for participation in trade fairs, exhibitions, product introduction; machinery, equipment and professional equipment temporarily imported for re-export or temporarily exported for re-import in service of work in the specified period;

2. Upon the ending of fairs, exhibitions, product introduction or the job as prescribed by law, for temporary export goods must be imported into Vietnam, for goods temporarily imported must be re exported to foreign countries;

3. Goods which are exported and imported by organizations, foreign individuals are entitled to the investment incentives and diplomatic immunities in Vietnam;

4. Goods imported for processing for foreign partners are exempt from import duties (including goods imported for processing for foreign partners are allowed to destroy Vietnam in accordance with law after liquidation, liquidity of outsourcing contracts) and the products exported to foreign parties are exempted from export duties. Goods exported abroad for processing for the Vietnam export tax exemption, when imported into the import tax exemption on the value of goods exported to foreign countries for processing under contracts;

5. Goods imported to form fixed assets of investment projects in the field of preferential import tariffs as specified in Annex 1 enforced with Decree 87/2010 / ND-CP or the areas with preferential import tariffs, investment projects funded by official development assistance (ODA) to be exempt from import tax, including:

a. Equipment, machines;

b. Means of transport used the technological line which can not be produced in the country; vehicles picking up workers, including at least 24 seat cars and waterway vehicles;

c. Components, details, parts, accessories, fixtures, molds for assembly with equipment, machinery and means of transport specified at the points a and b, this item;

Raw materials and supplies which can not be produced in the country for manufacture of equipment and machinery used in technological lines or to manufacture components, details, parts, accessories, fixtures, molds to conveniently assembling into the equipment and machines specified in this item;

e. Construction materials can not be domestically produced;

7. Seed, pets are allowed to import so as to perform investment projects in the fields of agriculture, forestry and fisheries;

8. Exemption of import duties on imported goods specified in item 6 and 7 of the Article 12 of the Decree No. 87 / NĐ-CP is applied to cases of project scale expansion, technology alternation, and technology innovation.

9. The first tax exemption for goods being imported equipment in accordance with the list provided for in the Annex II (the list of equipment groups are exempt from import duties only for the first time enforced with Decree 87/2010/NĐ-CP) to form fixed assets of the project which is received import tax incentives, investment projects funded by official development assistance (ODA) to invest in hotels, offices, apartments leasing, housing, commercial centers, technical services, supermarkets, golf courses, resorts, sports, entertainment parks, clinics, medical treatment, education, culture, finance financial, banking, insurance, auditing, consulting services.

11. The project which has the imported goods and receive tax-free for the first time as specified in this paragraph shall not exempt under the provisions of other paragraphs of this article;

12. Exemption from import duty on raw materials, supplies and direct service for production of software products, which can not be domestically produced;

13. Exemption from import duty on goods imported for direct use in scientific research and technological development, including: machinery, equipment, parts, supplies and means of transport which can not be domestically produced, the technology which can not be domestically produced; documents, books, scientific journals and electronic resources for science and technology;

14. Raw materials, supplies and components which have not been domestically produced to will be imported for production of the investment projects in the field which is specially encouraged to invest as specified in the Annex I attached to this Decree or the areas with socio-economic difficulties (except for the projects in manufacturing and assembling automobiles, motorcycles, air conditioners, electric heaters, refrigerators, washing machines, electric fans, dishwashers, DVD, stereo, electric irons, kettles, hair dryers, drying hands and other items as decided by the Prime Minister) are exempted from import duties for a period of 05 (five) years as from the date of commencement of production;

16. Machinery, equipment, vehicles (except under 24 seat cars and cars designed to carry passenger-cum-cargo equivalent with under 24 seat cars) imported by foreign contractors by the mode of temporary import for re-export to implement ODA projects in Vietnam are exempt from import duties when they are temporarily imported and exempt from export tax when they are re-exported;

18. the areas which will receive import tax incentives as specified in Items 9 and 14 of this Article shall comply with the list of regions receiving preferential enterprise income tax.

b. Land policy incentives

 

Exemption from land rent or water surface rent for the entire rend duration

Legal foundations

  • ► Investment projects belong to the fields of special investment incentives are invested in the areas with the extremely difficult socio-economic conditions;
  • ► The project of land use to build housing for employees of the Industrial zones in the project approved by the competent authorities;
  • ► Land for construction of facilities, buildings providing air services;
  • ► Land for construction of water supply facilities;
  • ► Land for construction of infrastructure structure for common use in industrial zones, high-tech zones and export processing zones.

 

Item 1, article 19, NĐ 46/2014/NĐ- CP on May 15th 2014;

 

Exemption from land rent and water surface rent in a fixed period after construction

Legal foundations

  • ► 03 years for projects on the list of investment incentives; business and production facilities which have just moved in accordance with the plan because of environmental pollution;
  • ► 07 years for investment projects in areas with the socio-economic conditions in difficultt;
  • ►11 years for investment projects in areas with the extremely difficult socio-economic condition; the projects belonging to the list of areas of special investment incentives; the projects belonging to the list of investment incentives that are invested in areas with the difficult socio-economic conditions;
  • ►15 years for the projects belonging to the list of investment incentive sectors that are investing in the areas with the extremely difficult socio-economic condition; the projects belonging to the list of areas of special investment incentives invested in the areas with the difficult socio-economic conditions.

Item 1, article 19, NĐ 46/2014/NĐ- CP on May 15th 2014;


Updated on: July 3, 2020
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