The Prime Minister has issued Decision 29/2021/QD-TTg dated 6 October 2021 on the special investment incentive mechanism (“Decision 29”). Specify the level and duration of corporate income tax incentives.
04 Principles for special investment incentive application
1 – The special investment incentive schemes are applied to both new investment projects and expansion of investment projects.
2 – The special investment incentives must be specified under the IRC, DIA or any written agreement with the competent state authorities.
3 – Corresponding special investment incentive schemes will apply based on the actual conditions satisfied by the eligible enterprise for the remaining incentivised period.
4 – Taxpayers who fail to comply with their commitments and conditions to enjoy the special investment incentives are not entitled to the incentive schemes under Decision 29. Where the taxpayers have already enjoyed the incentives, such incentivised amount must be paid back together with interest on late payment and penalties imposed in accordance with the tax administration regulations.
Special investment incentive schemes
Pursuant to the provisions in Articles 5 and 6 of Decision 29, the incentives under three schemes, which include Corporate Income Tax (“CIT”) incentives and land and water surface rent incentives, as follows:
1 – CIT rate at 9% within 30 years, for incomes of economic organizations from implementing investment projects in industries or trades with special investment incentives with a capital scale of VND 30,000 billion or more, minimum disbursement of VND 10,000 billion within 03 years from the date of issuance of the Investment Registration Certificate/approval of investment policy.
2 – CIT rate at 7% within 33 years for:
New investment projects (including the expansion of such new investment projects) in innovation centers, research and development centers with total investment capital of VND 3,000 billion or more, which disburse at least VND 1,000 billion within three years from the issuance date of the Investment Registration Certificate (“IRC”) or Decision on Investment Approval (“DIA”), and national innovation centers established under the Prime Minister’s decision;
+ The investment project is eligible for special incentives and take one condition: Being a level 1 high-tech project; Vietnamese enterprises are participating in the level 1 chain; The added value accounts for over 30% - 40% of the total cost of the final output product; Meet the criteria for technology transfer level 1.
3 – CIT rate at 5% within 37 years, for income from the activities of the object or investment project in one of the following cases:
+ The National Innovation Center is established under the Prime Minister's decision.
+ The investment project is eligible for special investment incentives and meets one of the following criteria: Being a level 2 high-tech project; There are Vietnamese enterprises participating in the level 2 chain; The added value accounts for over 40% of the total cost of the final output product; Meet the criteria for technology transfer level 2.
+ In addition to tax incentives, economic entities/organizations implementing investment projects in this case are also entitled to: 6 years exempt from CIT and subsequent 13 years 50% of CIT rate
Collected from source
Author: Hau Nguyen
Consulted by: Lawyer Do Quang Hung
