What are bases for formulation of medium-term and annual public investment plans in Vietnam from January 01, 2025? What are conditions for application of CIT incentives in Vietnam?

What are bases for formulation of medium-term and annual public investment plans in Vietnam from January 01, 2025?

Pursuant to Article 50 of the Law on Public Investment 2024 (effective from January 01, 2025) which stipulates the base for formulating medium-term and annual public investment plans as follows:

(1) The base for formulating medium-term public investment plans includes:

- The situation and results of implementing the 5-year economic and social development plan and the previous period's medium-term public investment plan;

- Economic and social development strategy; orientation or 5-year economic and social development plan of the nation, sector, field, locality; 5-year financial plan; 5-year public debt borrowing and repayment plan; investment priority goals in the 5-year plan of the nation, sector, field, locality;

- Relevant planning according to legal regulations on planning;

- Needs and forecast of the ability to mobilize investment capital sources for constructing the economic and social infrastructure, and the ability to balance state budget capital;

- Forecast of the impact of global and domestic situations on development and the ability to mobilize investment capital sources;

- Mechanisms and policies to attract investment capital from economic sectors to build economic and social infrastructure.

(2) The base for formulating annual public investment plans includes:

- The situation and results of implementing the national, sectoral, field, local economic and social development plan; results of implementing the previous year's public investment plan;

- Annual economic and social development plan;

- Medium-term public investment plan;

- Needs and the ability to balance resources for constructing the economic and social infrastructure in the plan year.

What are conditions for application of CIT incentives in Vietnam?

According to point a, clause 4, Article 18 of Circular 78/2014/TT-BTC, supplemented by clause 5, Article 10 of Circular 96/2015/TT-BTC and amended by clause 2, Article 10 of Circular 96/2015/TT-BTC, which stipulates corporate income tax incentives for enterprises with investment projects that meet preferential investment sector conditions as follows:

- Enterprises with investment projects enjoying corporate income tax incentives by meeting conditions in preferential investment sectors will have the following incomes eligible for corporate income tax incentives:

+ Income from the preferential investment sector.

+ Income from the liquidation of scrap and waste of products in the sector receiving investment incentives.

+ Income from exchange rate differences directly related to revenue and expenses of the preferential sector.

+ Income from non-term bank deposit interest.

+ Income from other directly related sources of income.

What are bases for formulation of medium-term and annual public investment plans in Vietnam from January 01, 2025? What are conditions for application of CIT incentives in Vietnam? (Image from the Internet)

Which new investment projects are eligible for a preferential tax rate of 10% for a period of 15 years in Vietnam?

Pursuant to clause 1, Article 19 of Circular 78/2014/TT-BTC, supplemented by clause 5, Article 11 of Circular 96/2015/TT-BTC, amended by clause 1, Article 11 of Circular 96/2015/TT-BTC, and rectified by Article 1 of Decision 2465/QD-BTC of 2015, which stipulates that enterprises are eligible for a preferential tax rate of 10% for a period of 15 years for new investment projects as follows:

- New investment projects in: areas with extremely difficult socio-economic conditions stipulated in the Appendix issued with Decree 218/2013/ND-CP, Economic Zones, High-Tech Zones including centralized information technology zones established by the Prime Minister of the Government of Vietnam.

- New investment projects in fields: scientific research and technology development; high-tech application in the list of high-tech technologies prioritized for development investment according to the Law on High Technology; high-tech incubation, high-tech enterprise incubation; venture investment for high-tech development in the list of high-tech technologies prioritized for development according to the law on high technology; investment to build - operate high-tech incubation facilities, high-tech enterprise incubation; investment in developing water plants, power plants, water supply and drainage systems; bridges, roads, railways; airports, seaports, river ports; airports, stations, and other important infrastructure projects as decided by the Prime Minister of the Government of Vietnam; software production; production of composite materials, light building materials, rare materials; production of renewable energy, clean energy, energy from waste disposal; and biotechnology development.

Investment projects developing water plants, power plants, water supply and drainage systems; bridges, roads, railways; airports, seaports, river ports; airports, stations must generate revenue, income from the operation of the stated investment projects to be eligible for tax incentives. In case enterprises perform construction of these works, the income from construction activities is not eligible for tax incentives.

- New investment projects in the environmental protection field, including: production of environmental pollution treatment equipment, environmental monitoring and analysis equipment; pollution treatment and environmental protection; collection, treatment of wastewater, emissions, solid waste; and recycling, reuse of waste.

- New investment projects in the production field (excluding projects producing goods subject to special consumption tax, mineral exploitation projects) that meet one of the following two criteria:

+ Project with an initial registered investment capital scale of at least 6 (six) thousand billion VND, disbursement completed within 3 years from the time of first investment permission as prescribed by the investment law and having a total revenue of at least 10 (ten) thousand billion VND/year at the latest 3 years from the year of revenue generation from the investment project (at the latest by the 4th year from the year of revenue generation the enterprise must achieve a total revenue of at least 10 (ten) thousand billion VND/year).

+ Project with an initial registered investment capital scale of at least 6 (six) thousand billion VND, disbursement completed within 3 years from the time of first investment permission as prescribed by the investment law and regularly employing over 3,000 workers at the latest 3 years from the year of revenue generation from the investment project (at the latest by the 4th year from the year of revenue generation the enterprise must meet the condition of employing an average annual regular workforce of over 3,000 workers).

- New investment projects producing products in the List of prioritized supporting industry products that meet one of the following criteria:

+ Supporting industry products for high technology as prescribed by the Law on High Technology;

+ Supporting industry products for the production of products in the sectors: textiles – clothing; leather – shoes; electronics – informatics; automobile assembly; mechanical engineering that these products as of January 01, 2015, are not yet produced domestically or are produced but must meet technical standards of the European Union (EU) or equivalent.