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INVESTMENT POLICIES IN VIETNAM - TAXATION INCENTIVES
INVESTMENT POLICIES IN VIETNAM - Taxation incentives [1]
Depending on sectors, geographical areas, scale of the project, the investor may enjoy the taxation incentives as follows:
1. Exemption and recution of corporate income tax in a certain period:
(i) Applicability of incentive corporate income tax rates (compare with normal tax rate of 20%):
- Incentive tax rate of 10% within 15 years will apply to enterprises referred to in point (ii) section 3.1 below;
- Incentive tax rate of 10% for the whole operation period will apply to the income of enterprise operating in socialization in the field of education – training, vocation, health, culture, sports and environment in publication, printed newspaper areas, social housing projects.
(ii) Tax exemption for 04 years, reduction of 50% of tax payable for the next 9 years for income of enterprise from performing new investment projects in the regions with special difficult socio-economic conditions, in economic zones, high-tech zones, investment and development of water plants, power plants, water drainage and supply system, bridges, roadway, railway, airports, seaports, river ports, railway stations, production of renewable energy, clean energy; new investment projects in the field of environmental protection and some other projects.
(iii) Tax exemption for 02 years, reduction of 50% of tax payable for the next 4 years for income from performing new investment projects in the regions with difficult socio[1]economic conditions; production of high-quality steel, energy-saving products, machinery and equipment for agriculture, new projects in industrial zones, except the industrial zone located in the region with advantageous socio-economic conditions.
2. Land rental fees (in the case of land leased from the Government)
(i) The land rent shall be exempted for the whole lease term in the following cases: - The investment projects entitled to special investment incentives to be carried out in the regions with special socio-economic difficulties;
- The projects using land to build residential houses for the workers in the industrial zones which are approved by the competent authorities;
- Land used for building infrastructure in the industrial zones, industrial complexes, processing and exporting zones;
- Land used for building the establishments serving airline services, excepting the land used for building establishments doing airline service business.
- Land used for building water supply construction, including water extraction and water treatment construction, water pipelines system, constructions for the management and operation of the water supply system (administrative offices, executive offices, factories, equipment, and sheds).
(ii) The land rent exemption within a certain period:
The land rent shall be exempted during the fundamental construction period according to the project approved by the competent authorities for most 3 years from the effective date of the land lease contracts. After the capital construction period, depending on the specific project, the investor may enjoy further land rental fee exemption as follows:
- Three (3) years with regard to the projects entitled to investment incentives; new business establishment of economic organizations which is moved due to planning or environment pollution.
- Seven (7) years with regard to the investment projects in the regions with difficult socio-economic conditions;
- Eleven (11) years with regard to the investment projects in the regions with special difficult socio-economic conditions; investment projects entitled to special investment incentives; projects entitled to investment incentives which are invested in the region with difficult socio-economic conditions;
- Fifteen (15) years with regard to the projects on the List of Domains entitled to investment incentives which are invested in the regions with extreme socio-economic difficulties; projects the List of Domains entitled to special investment incentives which are invested in the regions facing socio-economic difficulties. Investors who have land leased out by the state for the construction and trading in infrastructure of industrial zones, industrial complexes, export processing zones, economic zones, high-tech zones shall be entitled to exemption of land rents after the period of fundamental construction as prescribed in Clause 2 of this Article, particularly as follows:
- 11 years if investments are made in administrative divisions of rural districts outside the list of administrative divisions of investment incentives according to the Law on Investment.
- 15 years if investments are made in administrative divisions of rural districts belonging to the list of administrative divisions facing difficult socio-economic conditions according to the Law on Investment.
- Entire lease term if investments are made in administrative divisions of rural districts belonging to the list of administrative divisions facing extremely difficult socio-economic conditions according to the Law on Investment.
[1] Vietnam Investment Promotion Guidebook
1. Exemption and recution of corporate income tax in a certain period:
(i) Applicability of incentive corporate income tax rates (compare with normal tax rate of 20%):
- Incentive tax rate of 10% within 15 years will apply to enterprises referred to in point (ii) section 3.1 below;
- Incentive tax rate of 10% for the whole operation period will apply to the income of enterprise operating in socialization in the field of education – training, vocation, health, culture, sports and environment in publication, printed newspaper areas, social housing projects.
(ii) Tax exemption for 04 years, reduction of 50% of tax payable for the next 9 years for income of enterprise from performing new investment projects in the regions with special difficult socio-economic conditions, in economic zones, high-tech zones, investment and development of water plants, power plants, water drainage and supply system, bridges, roadway, railway, airports, seaports, river ports, railway stations, production of renewable energy, clean energy; new investment projects in the field of environmental protection and some other projects.
(iii) Tax exemption for 02 years, reduction of 50% of tax payable for the next 4 years for income from performing new investment projects in the regions with difficult socio[1]economic conditions; production of high-quality steel, energy-saving products, machinery and equipment for agriculture, new projects in industrial zones, except the industrial zone located in the region with advantageous socio-economic conditions.
2. Land rental fees (in the case of land leased from the Government)
(i) The land rent shall be exempted for the whole lease term in the following cases: - The investment projects entitled to special investment incentives to be carried out in the regions with special socio-economic difficulties;
- The projects using land to build residential houses for the workers in the industrial zones which are approved by the competent authorities;
- Land used for building infrastructure in the industrial zones, industrial complexes, processing and exporting zones;
- Land used for building the establishments serving airline services, excepting the land used for building establishments doing airline service business.
- Land used for building water supply construction, including water extraction and water treatment construction, water pipelines system, constructions for the management and operation of the water supply system (administrative offices, executive offices, factories, equipment, and sheds).
(ii) The land rent exemption within a certain period:
The land rent shall be exempted during the fundamental construction period according to the project approved by the competent authorities for most 3 years from the effective date of the land lease contracts. After the capital construction period, depending on the specific project, the investor may enjoy further land rental fee exemption as follows:
- Three (3) years with regard to the projects entitled to investment incentives; new business establishment of economic organizations which is moved due to planning or environment pollution.
- Seven (7) years with regard to the investment projects in the regions with difficult socio-economic conditions;
- Eleven (11) years with regard to the investment projects in the regions with special difficult socio-economic conditions; investment projects entitled to special investment incentives; projects entitled to investment incentives which are invested in the region with difficult socio-economic conditions;
- Fifteen (15) years with regard to the projects on the List of Domains entitled to investment incentives which are invested in the regions with extreme socio-economic difficulties; projects the List of Domains entitled to special investment incentives which are invested in the regions facing socio-economic difficulties. Investors who have land leased out by the state for the construction and trading in infrastructure of industrial zones, industrial complexes, export processing zones, economic zones, high-tech zones shall be entitled to exemption of land rents after the period of fundamental construction as prescribed in Clause 2 of this Article, particularly as follows:
- 11 years if investments are made in administrative divisions of rural districts outside the list of administrative divisions of investment incentives according to the Law on Investment.
- 15 years if investments are made in administrative divisions of rural districts belonging to the list of administrative divisions facing difficult socio-economic conditions according to the Law on Investment.
- Entire lease term if investments are made in administrative divisions of rural districts belonging to the list of administrative divisions facing extremely difficult socio-economic conditions according to the Law on Investment.
[1] Vietnam Investment Promotion Guidebook
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