g) Forms of investment incentives
– Incentives on corporate income tax
+ Corporate income tax incentive (tax rate 10% for 15 years; tax rate 10% throughout the whole duration of the project; tax rate 17% for up to 10 years).
+ Exemption from and reduction of tax for a certain period of time (up to 9 years).
+ Allow loss transfer (within 5 years).
+ Authorization of tax loss carried back (within 5 years).
+ Refund tax on reinvested profit.
+ Authorization of accelerated depreciation…
To receive this incentives, the Law on Corporate income Tax set out different preferential criteria, such as geographical areas, economic zones, high-tech zones; high technology sector, scientific research and technological development, investment in the development of extremely important infrastructure of the State, production of software, education – training and environmental sectors…
– Incentives on export-import tax
+ For investment projects in sectors eligible for investment incentives or sectors eligible for special investment incentives or those located in areas with extremely difficult socioeconomic conditions:
- Exemption from import tax on goods imported to form fixed asset.
- Materials, supplies and components that cannot be domestically produced and need to be imported for the implementation if investment project are exempted from import tax for a period of 5 (five) years from the date of commencement of production.
- Projects and shipbuilders on the list of sectors eligible lor incentives under the Law on Investment are exempt I tom tax on: goods imported to create fixed assets of the shipbuilder; imported machinery, equipment, raw material, supply, component, semi-finished products that cannot be produced domestically and to be used for shipbuilding.
+ Other subjects exempted from import and export taxes
- Exports and imports of foreign organizations and individuals eligible for incentives and/or exemptions; goods in the category of tariff-exempt baggage for passengers on exit or entry; imported goods for sale at duty-free shops.
- Gifts, donations given by foreign organizations, individuals to Vietnamese organizations or individuals and vice versa.
- Goods traded among border residents that are on I the List of goods that are meant to serve their business or consumption.
- Goods exempt from export tax and import tax under international treaties to which the Socialist Republic of Vietnam is a contracting party.
- Goods with a value or amount of tax payable below the minimum.
- Raw materials, supplies and components imported for processing export products; imported finished products to be attached to processed products; processed export products.
- Raw materials, supplies and components imported to produce export products.
- Goods manufactured, processed, recycled or assembled in a non-tariff area without using raw materials and components imported from abroad when imported into the domestic market.
- Goods temporarily imported, re-exported or temporarily exported, re-imported within a certain period of tune.
- Goods not for commercial purposes in the following cases: samples; photo, film, replacement model for samples; small volume advertising publications.
- Goods imported to form fixed assets of subjects entitled to investment incentives in accordance with the law on investment.
- Plant varieties; livestock breeds; fertilizers and plant protection substances which cannot be domestically produced and need to be imported according to regulations of competent authorities.
- Raw materials, supplies and components that cannot be produced domestically imported by investment projects lor manufacturing and assembling medical equipment prioritized for research and produce are exempt from import lax for 5 years, since the commencement of production.
- Imports serving petroleum activities.
- Machinery, equipment, raw materials, supplies, components and parts imported for money printing and minting.
- Raw materials, supplies and components imported lor manufacture or information technology products, digital content or software.
- Goods imported and exported for environmental protection purposes.
- Imports serving education that are not produced domestically.
- Imported machinery, equipment, components, parts that cannot be manufactured domestically; scientific documents serving scientific research, technological development, development of technology incubation, science and technology enterprise incubation and technological innovation.
- Imported goods exclusively serving national defense and security purposes, and the transportation vehicle that cannot be domestically manufactured.
- Goods exported or imported for social welfare, recovery from a disaster, epidemic or other special incidents
(2020 Law on Investment and Decree No. 134/2016/ND-CP)
– Incentives on land use, land rent tax
- Exemption from land rent tax for the whole term:
- Projects in the fields of special investment incentives Invested in extremely difficult socio-economic areas.
- Investment projects on construction of houses lor workers of industrial parks and export processing zones where land is leased or sub-leased by the State
- from investors in the construction and business of Infrastructure in industrial parks and export processing zones are implemented under the planning approved by the competent state agencies; the investor is not allowed to Include the cost of land rents in the house rental price.
- Projects using land to build student dormitories with money from the state budget; organizations assigned to manage are not allowed to include land rents in the house rental price.
- Agricultural land for ethnic minorities; land for implementation of projects on afforestation for protection and reforestation for sea encroachment.
- High-tech enterprises, science and technology enterprises, and science and technology organizations are exempt from land rent for the whole lease period for land for construction of scientific research facilities if they satisfy conditions related to scientific and technological activities (if any), including: land for construction of laboratories, land lor construction of technology incubators and science and technology business incubators, land for construction of experiment, land to build experimental production facilities.
- Land for construction of facilities providing aviation services, except land for construction of facilities for aviation service business.
- Agricultural cooperatives use land as ground for the construction of the headquarters, drying yard, and warehouse; facilities directly serving agriculture, forestry, aquaculture and salt production.
- Land for construction of maintenance and repair stations, parking lots (including ticketing areas, administration office, and public service areas) for public transportation according to regulations on road traffic.
- Land for construction of water supply, including water exploitation and treatment, pipelines and construction on the water supply pipeline network and support of the management and operation of the water supply system (operating and managing building, factories, warehouses, materials and equipment).
- Investors land leased by the State to invest in the construction, running business in infrastructure of industrial parks, industrial clusters and export processing zones are exempt from land rent even after the exemption period during the construction period according to Clause 10, Article 19 of Decree No. 46/2014/ND-CP dated May 15, 2014 on Regulations on collection of land rent and water surface rent (supplemented at Clause 6, Article 3 of Decree No. 135/2016/ND-CP dated September 9, 2016). In case an industrial park, industrial cluster or export processing zone is located in more than one district with different incentives, investors in the construction of infrastructure are entitled to incentives according to the regulations of the locality where the project occupies the largest percentage of total area.
- Investors land leased by the State to invest in the construction of infrastructure of industrial parks, industrial I1 listers and export processing zones are exempted from land rent after the fundamental exemption period, with details as follows:
- 11 years if the project is located in a district-level area that is not on the list of areas eligible for investment incentives (Appendix III of Decree No. 31/2021/ND-CP).
- 15 years if the project is located in district-level areas that is on the list of areas with difficult socio-economic conditions (Appendix III of Decree No. 31/2021/ND-CP).
- The entire land lease period if the project is located in district-level area that is on the list of geographical areas with extremely difficult socio-economic conditions (Appendix II of Decree No. 31/2021/ND-CP).
– Exemption or reduction of non-agricultural land levy for investment projects in the following cases:
- Land of investment projects located in the fields of special investment incentives (especially investment incentives); investment projects in areas with extremely difficult socio-economic conditions.
- Land of investment projects in the field of investment promotion (investment incentives) in areas with difficult socio-economic conditions.
- Land of enterprises having more than 50% of the labor force being veterans.
- Land of facilities carrying out socialization for activities in the fields of education, vocational training, health care, culture, sports, and environment.
- Land to build houses of gratitude, houses of great solidarity, nursing homes for elders, disabled people, orphans, and social medical facilities.
- Investment assistance
Investment assistance means measures by which the State creates opportunities to allow investors to receive certain favorable conditions in terms of finance, technical infrastructure, science and technology, etc., to attract domestic and international investors.
Investment assistance is not applied to all investors, but only to certain entities. Pursuant to Clause 2, Article 18 of the 2020 Law on Investment, subjects eligible for investment assistance include:
- High-tech enterprises.
- Science and technology enterprises.
- Science and technology organizations.
- Enterprises investing in agriculture and rural areas.
- Enterprises investing in education and law dissemination.
- Others who are in line with socio-economic development orientation in certain periods.