“The Ministry of Finance has issued Circular 83/2016/TT-BTC dated June 17th 2016, which regulates in detail 3 types of tax incentives for the investment projects in Vietnam involving the corporate income tax, import duty and non-agricultural land use tax.“
Preferential import duty
Projects with operational sectors subbject to special investment incentives; projects operating in areas with extremely difficult socio-economic conditions, or projects with capital from 6000 billion VND or more will be entitled to have the following incentives:
Projects under the category of investment incentives such as manufacture of automobiles, auto parts, shipbuilding, etc. ; projects operating in areas with difficult socio-economic conditions such as Kon Tum, Son La, Lai Chau, etc. or projects using 500 or more labors to operate in rural areas: import duty exemption for imported goods as fixed assets.
Preferential non-agricultural land use tax
Tax exemption for investment projects:
• under the sectors subject to special investment incentives; or
• operating in areas with extremely difficult socio-economic conditions; or
• with capital from 6000 billion or more, capital disbursement within at least 3 years from the date of issuance of the Investment Registration Certificate and operating in areas with extremely difficult socio-economic conditions; or
• the investment projects under the stipulated sectors subject to investment incentives and operating in areas with difficult socio-economic conditions.
A 50% tax rate reduction for investment projects:
• under the sectors subject to investment incentives as stipulated in Section B Annex I Decree 118/2015/ND-CP; or
• under areas with difficult socioe-conomic conditions as defined in Annex II Decree 118/2015/ND-CP; or
• have the number of employees from 500 or more operating in rural areas with difficult socio-economic conditions.
In order to gain such incentives, investment projects must meet one of the following conditions:
• The investment sectors of the project belong to the sectors includingmanufacturing new materials, new energy; manufacturing electronic products and key mechanical products; high-tech activities, and many other sectors as prescribed in Clause 2 Article 15 of 2014 Investment Law, Clause 1 Article 16 of Decree 118/2015 / ND-CP;
• The capital scale of the projects should be from 6000 billion or more, and the disbursement of at least 6,000 billion within 3 years commencing from the date of issuance of the Investment Registration Certificate or the investment policy decisions;
• The number of the employees from 500 or more people in rural areas;
• Operating area of the project is the local area with difficult or extremely difficult socio-economic conditions.
In addition, there are two cases that should be noted:
The investment projects for mineral exploitation are not entitled to enjoy preferential import duty and non-agricultural land use tax.
For the projects producing goods and services subject to excise tax:
• Only new investment projects of under 24 seats carmaker (including cars for both passengers and cargoes transportation with two or more rows of seats, with fixed bulkhead design between compartment s of passengers and cargoes) are subject to preferential corporate income tax;
• Other types of goods and services subject to special consumption tax cannot gain the preferential corporate income tax, import duty and non-agricultural land use tax.