11:53 | 05/12/2024

Shall the tax incentive program for automobile supporting industry in Vietnam be extended until December 31, 2027?

Shall the tax incentive program for automobile supporting industry in Vietnam be extended until December 31, 2027?

Shall the tax incentive program for automobile supporting industry in Vietnam be extended until December 31, 2027?

Pursuant to Article 9 of Decree 26/2023/ND-CP regarding the tax incentive program for automobile supporting industry, a preferential import tax rate of 0% is applied to materials, supplies, and components not yet produced domestically for manufacturing, processing (assembling) products that are prioritized for the development of the automotive manufacturing and assembly industry (referred to as automotive supporting industry products) until December 31, 2024.

To date, the implementation period for the tax incentive program for automobile supporting industry is nearing its end, while the tax incentive program for manufacturing and assembling automobiles prescribed in Article 8 of Decree 26/2023/ND-CP will continue until 2027.

Therefore, to further support enterprises and enhance the role of the automotive supporting industry, the Ministry of Finance has presented a proposal for a draft decree amending and supplementing Article 9 of Decree 26/2023/ND-CP, suggesting an extension of the tax incentive program for automobile supporting industry. Thus, when the amended and supplementary decree takes effect, automotive supporting industry products will continue to benefit from a 0% preferential import tax rate until December 31, 2027.

Tải về the proposal and draft decree amending and supplementing Article 9 of Decree 26/2023/ND-CP.

Proposal to Extend the Automotive Supporting Industry Tax Incentive Program until December 31, 2027?

Shall the tax incentive program for automobile supporting industry in Vietnam be extended until December 31, 2027? (Image from the Internet)

What are the eligibility requirements for applying the tax incentive program for automobile supporting industry in Vietnam?

Based on Clause 3, Article 9 of Decree 26/2023/ND-CP that stipulates eligibility requirements for applying the tax incentive program for automobile supporting industry:

(1) For enterprises manufacturing, processing (assembling) automotive components and parts:

- Must have a sales contract for automotive supporting industry products with automobile manufacturing and assembling enterprises possessing a Certificate of Eligibility for Automobile Manufacturing and Assembly issued by the Ministry of Industry and Trade;

- Must have an Investment Certificate or Business Registration Certificate or Certificate of Enterprise Registration or Certificate of Business Registration specifying the project’s objectives or business sectors involving the production of parts and auxiliary components for automobiles and other motor vehicles;

- Must have ownership or usage rights over the manufacturing, processing (assembling) facilities and machinery, equipment at a manufacturing, processing (assembling) facility within the territory of Vietnam.

(2) For enterprises manufacturing, assembling automobiles that self-produce, process (assemble) automotive components and parts: Must have a Certificate of Eligibility for Automobile Manufacturing and Assembly issued by the Ministry of Industry and Trade.

(3) For imported materials, supplies, components:

- Imported materials, supplies, components (including those imported from the effective date of Decree 26/2023/ND-CP and still in stock carried forward to subsequent incentive periods for manufacturing, processing (assembling) automotive supporting industry products in subsequent incentive periods; excluding materials, supplies, components put into use but defective or faulty) for manufacturing, processing (assembling) automotive supporting industry products listed in the Priority Development List for the Automotive Manufacturing and Assembly Industry specified in Section 4, Appendix issued with Decree 111/2015/ND-CP.

In cases where products are merely assembled using simple devices like screws, bolts, nuts, rivets, and do not undergo any manufacturing or processing to become a finished product, they are not eligible for the tax incentive program for automobile supporting industry.

- Imported materials, supplies, components not yet produced domestically, imported directly or consigned or authorized for import by the enterprise prescribed in Clause 2, Article 9 of Decree 26/2023/ND-CP. The determination of materials, supplies, components not yet produced domestically shall be based on the regulations of the Ministry of Planning and Investment regarding the List of domestically producible materials, supplies, and semi-finished products.

Note: Enterprises manufacturing, processing (assembling) automotive components, and enterprises manufacturing, assembling automobiles, self-producing, processing (assembling) automotive components meeting the above eligibility requirements and regulations in Clauses 4, 5, 6, 7, and 8 of Article 9 of Decree 26/2023/ND-CP are eligible for a 0% preferential import tax rate on imported materials, supplies, and components for the production, processing (assembling) of automotive supporting industry products during the evaluated incentive period.

Vietnam: What does the application for participation in the tax incentive program for automobile supporting industry include?

Pursuant to point a, Clause 5, Article 9 of Decree 26/2023/ND-CP stipulating the application for participation in the tax incentive program for automobile supporting industry:

- 01 original Official Dispatch registering for participation in the tax incentive program for automobile supporting industry according to Form No. 08, Appendix 2 issued with Decree 26/2023/ND-CP.

- 01 certified copy of the Investment Certificate or Business Registration Certificate or Enterprise Registration Certificate or Business Registration Certificate (applicable for enterprises manufacturing, processing (assembling) automotive components and parts).

- 01 original Notice Document of manufacturing, processing (assembling) facilities; machinery, equipment at manufacturing, processing (assembling) facilities for customs authorities according to Form No. 09, Appendix 2 issued with Decree 26/2023/ND-CP (applicable for enterprises manufacturing, processing (assembling) automotive components and parts).

- 01 certified copy of the Land Use Right Certificate issued by a competent state agency to the enterprise or Land Use Right Certificate issued by a competent authority to the landowner and a leasing, borrowing contract for land, premises, workshop in case the enterprise builds a manufacturing facility on leased premises.

- 01 certified copy of the Certificate of Eligibility for Automobile Manufacturing and Assembly issued by the Ministry of Industry and Trade (applicable for enterprises manufacturing, assembling automobiles, self-producing, processing (assembling) automotive components and parts).

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