AREAS ELIGIBLE FOR INVESTMENT INCENTIVES – HOW TO DETERMINE

Besides business lines eligible for investment incentives, areas eligible for investment incentives are also encouraged under the Investment policy in Vietnam. So how can projects and businesses in areas eligible for investment incentives be identified?

1. Areas eligible for investment incentives

Areas eligible for investment incentives according to the current Investment Law are determined:

– Disadvantaged areas and extremely disadvantaged areas;

– Industrial parks, export-processing zones, hi-tech zones and economic zones.

Details of areas eligible for investment incentives are determined in accordance with the List prescribed by the Government.

2. Case when investment incentives shall not be applied to the objects even in the areas eligible for investment incentives

The investment incentives shall not be applied to the objects even in the areas eligible for investment incentives, including:

– Projects on investment in mineral mining;

– Projects on investment in manufacturing/sale of goods/services subject to special excise tax according to the Law on Special Excise Tax, except for projects on manufacturing of automobiles, aircrafts and yachts.

– Projects on investment in commercial housing construction prescribed by the Law on Housing.

>> PROCEDURES FOR APPLYING INVESTMENT INCENTIVES https://linconlaw.vn/procedures-for-applying-investment-incentives/

>> DO NON-RESIDENT INDIVIDUAL HAVE TO PAY PERSONAL INCOME TAX? https://linconlaw.vn/do-non-resident-individual-have-to-pay-personal-income-tax/

3. Form of investment incentives

Forms of investment incentives in Vietnam may be applied to investment projects and enterprises according to current Investment laws include:

– Corporate income tax incentives, including application of a lower rate of corporate income tax for a certain period of time or throughout the investment project execution; exemption from and reduction of tax and other incentives prescribed by the Law on Corporate Income Tax.

– Exemption from import tax on goods imported to form fixed assets; raw materials, supplies and components for manufacturing purposes in accordance with regulations of law on import and export tax;

– Exemption from and reduction of land levy and land rents;

– Accelerated depreciation, increasing the deductible expenses upon calculation of taxable income.

4. Procedures for applying investment incentives

Investment incentives apply to each specific subject determined based on the written approval for investment guidelines (if any), the investment registration certificate (if any) and other relevant regulations of law.

Accordingly, investors determine their own investment incentives and carry out procedures to enjoy investment incentives at tax authorities, financial agencies, customs authorities and other competent agencies corresponding to each type of investment incentives.