06 benefits of enterprises directly serving national defense and security in Vietnam

06 benefits of enterprises directly serving national defense and security in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

On April 25, 2023, the Government of Vietnam promulgates Decree 16/2023/ND-CP on the organization, management, and operation of enterprises directly serving national defense and security and enterprises combining economy with national defense and security; amend Point g, Clause 1, Article 23 of Decree 47/2021/ND-CP.

Conditions for determining enterprises directly serving national defense and security in Vietnam

According to Article 3 of Decree 16/2023/ND-CP, an enterprise is defined as an enterprise directly serving national defense and security, ensuring the following conditions simultaneously:

- Being one of the following types of enterprises:

(i) A one-member limited liability company with 100% charter capital held by the State and under the management of the Ministry of National Defense and the Ministry of Public Security.

(ii) A one-member limited liability company whose charter capital is held by the enterprise specified in (i) 100%.

(iii) Limited liability companies with two or more members owning 100% of the charter capital of single-member limited liability companies in which 100% of charter capital is held by the State, in which at least one enterprise is an enterprise specified in (i).

- Having branches, fields, and areas of operation specified in the Appendix on the List of branches, Fields, or Areas Directly Serving National Defense and Security enclosed with Decree 16/2023/ND-CP.

- Directly approved by the Ministry of National Defense or the Ministry of Public Security, or through functional agencies, focal units under the Ministry of National Defense, the Ministry of Public Security, or the parent company is an enterprise with 100% charter capital held by the state and under the management of the Ministry of National Defense and the Ministry of Public Security, tasked with manufacturing and supplying defense and security products and services and performing national defense and security tasks with resources from the state budget or resources of enterprises in accordance with the objectives of investment and establishment of enterprises.

06 benefits of enterprises directly serving national defense and security in Vietnam

Specifically, in Clause 1, Article 7 of Decree 16/2023/ND-CP, enterprises directly serving national defense and security may apply the following policies:

(1) To enjoy incentives in terms of land rent, land use levy, and land use tax for the land area assigned to manage and use for defense and security tasks in accordance with the law on land, tax, and other relevant laws.

(2) To be allocated budget and other resources by the State to ensure expenditures according to regimes and norms as prescribed by law, including:

- Military equipment for officers, professional soldiers, defense workers, defense officers, non-commissioned officers, public security workers, and people doing cipher work;

- Expenses for the task of maneuvers, combat training, and reserve training;

- Expenses for defense and security work, defense service work, and military-civilian relations.

In case the state budget is insufficient, the unsecured expenditures shall be included in deductible expenses when determining taxable incomes in accordance with the Law on Corporate Income Tax and guiding documents. ;

- Excluded when assessing and classifying enterprises according to the Government's regulations.

(3) To be allocated budget and other resources by the State to finance the maintenance, repair, operation of production lines and equipment, and repair of defense and security products during the period of temporary suspension of production of defense and security products according to plans and tasks assigned by the Ministry of National Defense or the Ministry of Public Security directly or through specialized agencies or affiliated focal units. 

(4) To be allocated budget and other resources by the State to support 02 bonuses and welfare funds equal to 02 months' salary in case there are not enough sources to set aside.

(5) The State allocates budget and other resources to support the funding of kindergartens and education in areas where there are no schools under the public education system; medical expenses for places where, due to special conditions, infirmaries must be maintained;

Kindergartens and infirmaries in the locality must be maintained under the decisions of the Ministry of National Defense and the Ministry of Public Security.

(6) Depreciation is made for fixed assets that are production lines and repairs of weapons, equipment, infrastructure, and other specialized and special properties serving national defense and security tasks under the guidance of the Ministry of Finance.

Decree 16/2023/ND-CP takes effect from the date of signing and promulgation.

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