From January 1, 2025, are People's Committees at all levels authorized to decide on the investment policy of Group B projects in Vietnam?

From January 1, 2025, are People's Committees at all levels authorized to decide on the investment policy of Group B projects in Vietnam?

Pursuant to Article 18 of the Public Investment Law 20244 (effective from January 1, 2025) which stipulates the authority to decide on investment policies for programs and projects as follows:

Authority to decide on investment policies for programs and projects

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7. The provincial-level People's Committee decides on the investment policy for the following projects:

a) Group B and C projects using local budget funds, including additional funds aimed from the superior budget, legal sources of the locality under its management;

b) Group B and C projects implemented in an area with two or more provincial-level administrative units under the chairmanship of the provincial-level People's Committee as determined by the Prime Minister of Vietnam;

c) Group B and C projects using ODA and preferential foreign loans.

8. The district-level People's Committee decides on the investment policy for the following projects:

a) Group B and C projects using local budget funds, including additional funds aimed from the superior budget, legal sources of the locality under its management;

b) Group B and C projects implemented in an area with two or more district-level administrative units as assigned by the Chairman of the provincial-level People's Committee as the chairing agency; Group B and C projects implemented in an area with two or more communal-level administrative units;

c) Projects mentioned in clause 9 of this Article as proposed by the commune-level People's Committee.

9. The commune-level People's Committee decides on the investment policy for Group B and C projects using local budget funds, including additional funds aimed from the superior budget, legal sources of the locality under its management. In case of insufficient professional capacity in management and project implementation, the commune-level People's Committee reports to the district-level People's Committee to decide on the investment policy for Group B and C projects under its management.

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Thus, as soon as the Public Investment Law 2024 comes into effect on January 1, 2025, People's Committees at all levels will have the authority to decide on the investment policy of Group B projects.

This is a new point of the Public Investment Law 2024 compared to the Public Investment Law 2019, as it decentralizes the authority to decide on the investment policy of Group B projects under local management to People's Committees at all levels, transferring authority from the People's Councils at all levels to the People's Committees at all levels.

From January 1, 2025, are People's Committees at all levels authorized to decide on the investment policy of Group B projects in Vietnam? (Image from the Internet)

What are the cases in which a new investment project is not eligible for corporate income tax incentives as a new investment in Vietnam?

Based on point b of clause 5, Article 18 of Circular 78/2014/TT-BTC supplemented by clause 5, Article 10 of Circular 96/2015/TT-BTC and amended by clause 3, Article 10 of Circular 96/2015/TT-BTC which stipulates that enterprises are eligible for corporate income tax incentives when they have new investment projects as follows:

- New investment projects formed from the split, division, merger, consolidation, or conversion of enterprise form according to the law;

- New investment projects formed from the change of ownership (including cases of implementing new investment projects while still inheriting the assets, business location, and business sectors of the old enterprise to continue production and business activities; acquisition of operational investment projects).

Enterprises established or having investment projects from the conversion of enterprise type, change of ownership, split, division, merger, or consolidation can inherit corporate income tax incentives of the enterprise or investment project prior to the conversion, split, division, merger, or consolidation for the remaining period if they continue to meet the conditions for corporate income tax incentives.

What are procedures for implementing corporate income tax incentives for enterprises with new investment projects in Vietnam?

Based on Article 22 of Circular 78/2014/TT-BTC which stipulates the procedures for implementing corporate income tax incentives for enterprises with new investment projects as follows:

(1) Enterprises self-determine the conditions for tax incentives, preferential tax rates, period of tax exemption, tax reduction, and losses deducted (-) from taxable income to self-declare and self-finalize taxes with the tax authority.

(2) The tax authority, when inspecting and auditing enterprises, must check the conditions for tax incentives, the amount of corporate income tax exempted, reduced, and losses deducted from taxable income based on the actual conditions met by the enterprise. If the enterprise does not meet the conditions to apply preferential tax rates and the period of tax exemption, tax reduction, the tax authority shall handle tax recovery and apply administrative fines for tax violations according to the regulations.