Forms and Beneficiaries of Investment Incentives Applicable from January 01, 2021

Forms and subjects applying for investment incentives - Illustrative image

To be specific, Clause 1 Article 15 of the Investment Law 2020 stipulates the forms of investment incentives as follows:

- Corporate income tax incentives, including applying a lower corporate income tax rate than the usual rate for a limited period or for the entire duration of an investment project; tax exemption, tax reduction, and other incentives as prescribed by the law on corporate income tax;

- Exemption from import tax on imported goods to create fixed assets; raw materials, supplies, components imported for production as prescribed by the law on export and import taxes;

- Exemption or reduction of land levy, land rent, land use tax;

- Accelerated depreciation, increased deductible expenses when calculating taxable income.

Regarding the subjects eligible for investment incentives, Clause 2 Article 15 of this Law includes:

(1) Investment projects in industries and trades eligible for investment incentives as stipulated in Clause 1 Article 16 of this Law, specifically:

- High technology activities, high-tech supporting industry products, research and development activities, production of products resulting from scientific and technological activities as prescribed by the law on science and technology;- New material production, new energy, clean energy, renewable energy production; production of products with value added of 30% or more, energy-saving products;- Production of electronic products, key mechanical products, agricultural machinery, automobiles, automobile parts; shipbuilding;- Production of products in the List of industrial supporting products prioritized for development;- Production of information technology products, software, digital content;- Cultivation, processing of agricultural, forestry, and aquatic products; planting and protecting forests; salt production; exploitation of marine products and fishery logistics services; production of plant varieties, animal breeds, biotechnology products;- Collection, treatment, recycling, or reuse of waste;- Investment in the development and operation, management of infrastructure works; development of urban public passenger transport;- Preschool education, general education, vocational education, higher education;- Medical examination and treatment; production of medicines, medicinal materials, medicine preservation; scientific research on drug formulation technology, biotechnology to produce new drugs; production of medical equipment;- Investment in facilities for physical training and sports competitions for the disabled or professionals; protection and promotion of cultural heritage values;- Investment in geriatric centers, centers for mental health, treatment centers for Agent Orange victims; care centers for the elderly, disabled, orphans, and homeless children;- People's credit funds, microfinance institutions;- Production of goods, provision of services creating or participating in the value chain, industry linkage clusters.

(2) Investment projects in areas eligible for investment incentives as stipulated in Clause 2 Article 16 of this Law, specifically:

- Areas with difficult socio-economic conditions, areas with extremely difficult socio-economic conditions;- Industrial zones, export processing zones, high-tech zones, economic zones.

(3) Investment projects with a capital scale of 6,000 billion VND or more, disbursing at least 6,000 billion VND within 3 years from the date of issuance of the Investment Registration Certificate or investment policy approval, and meeting one of the following criteria: having a total revenue of at least 10,000 billion VND per year within no later than 3 years from the first year of revenue or employing over 3,000 laborers;

(4) Investment projects in social housing construction; investment projects in rural areas employing 500 laborers or more; investment projects employing persons with disabilities as prescribed by the law on persons with disabilities;

(5) High-tech enterprises, scientific and technological enterprises, scientific and technological organizations; projects with technology transfer under the List of technologies encouraged for transfer as prescribed by the law on technology transfer; technology incubation facilities, science and technology enterprise incubation facilities as prescribed by the law on high technology, and the law on science and technology; enterprises producing and providing technology, equipment, products, and services meeting environmental protection requirements as prescribed by the law on environmental protection;

(6) Creative startup investment projects, innovation centers, research and development centers;

(7) Investment in business chains distributing products of small and medium enterprises; investment in business technical facilities supporting small and medium enterprises, incubation facilities for small and medium enterprises; investment in business co-working spaces supporting innovative start-ups for small and medium enterprises as prescribed by the law on support for small and medium enterprises.

Note: The above mentioned investment incentives (2), (3), (4) will not apply to the following investment projects:

- Investment projects exploiting minerals;

- Investment projects producing and trading in goods and services subject to special consumption tax as stipulated by the Law on Special Consumption Tax, except for automobile, aircraft, and yacht production projects;

- Investment projects constructing commercial housing as prescribed by the law on housing.

Refer to the full content at Investment Law 2020 effective January 01, 2021.

Le Vy

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