Law on Special Administrative-Economic Units of Van Don, Bac Van Phong, Phu Quoc (also known as the Special Zone Law) is currently being discussed by the 14th National Assembly with many special preferential policies exclusively for investors.
Article table of contents
The investment and development in the special economic zone will offer investors the following incentives:
Personal Income Tax Incentives
Individuals working in the special economic zone are exempt from personal income tax for a period of 5 years but not beyond 2030 and are entitled to a 50% reduction on the personal income tax payable for the succeeding years on income from salaries, wages, and business income generated within the special economic zone. Specifically, for high-level managers and experts, the exemption period is extended to 10 years.
Special Consumption Tax Incentives
Special consumption tax incentives apply to casino business services, electronic games, and betting business services with a special consumption tax rate of 10% for a 10-year period from the date of revenue generation.
For imported goods that have not undergone processing, manufacturing, repairs, or usage, when re-exported to non-tariff zones within the special economic zone, any previously paid special consumption tax will be refunded.
Export and Import Tax Incentives
According to the Draft Law on Special Economic Zones, depending on the type of goods, the content and level of incentives on export and import taxes will vary.
To be specific, imported goods used to create fixed assets, including specialized transportation means within production lines, construction materials, equipment, components, machinery, etc., are exempt from import tax.
Additionally, import tax is exempted for 7 years for goods that are domestic equipment not yet producible domestically, or those producible domestically but not meeting technical standards or suitability for investment projects in prioritized development sectors as stipulated in Appendixes 1, 2, and 3 of the Draft Law on Special Economic Zones.
Moreover, these goods will also enjoy exemptions and will not be subject to value-added tax.
Corporate Income Tax Incentives
Corporate income tax incentives vary according to the sector in which the investor engages.
Investment projects in education, healthcare, culture, sports, and environment sectors are subject to a tax rate of 10% throughout the project's duration. For projects in sectors prioritized for development as per Appendixes 1, 2, and 3 attached to the Draft Law on Special Economic Zones, the preferential tax rate applies for 30 years. Furthermore, these projects are exempt from tax for 4 years and receive a 50% reduction on payable tax for the next 9 years from the date of taxable income generation.
Investment projects in the special economic zone in sectors such as the production, business, and services subjected to special consumption tax enjoy a 10% tax rate for 10 years, a 2-year tax exemption, and a 50% reduction on payable tax for the next 5 years from the date of taxable income generation.
Meanwhile, income from real estate business investment projects within the special economic zone enjoys a 17% tax rate for 10 years from the date of taxable income generation.
Other investment projects enjoy a 10% tax rate for 15 years, a 4-year tax exemption, and a 50% reduction on payable tax for the next 9 years from the date of taxable income generation.
Exemption on Land Rent and Water Surface Rent
Investment projects in Phu Quoc in education, vocational training, and healthcare sectors as per Appendix 3 of the Draft Law on Special Economic Zones and startup support projects are exempt from land rent and water surface rent for the entire lease term as stipulated by the Land Law. If the project is listed under investment attraction categories as determined by the Chairman of the special economic zone’s People's Committee, the exemption on land rent and water surface rent is up to 30 years.
In Van Don and Bac Van Phong special economic zones, the exemption period for land rent and water surface rent is also 30 years for investment projects in prioritized development sectors as per Appendixes 1, 2, and other investment projects stipulated in Points b and d, Clause 5, Article 3 of the Draft Law on Special Economic Zones.
The minimum exemption period for land rent is 15 years applied to other projects not mentioned above.
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