Cases in which investment incentives do not apply in Vietnam

Cases in which investment incentives do not apply in Vietnam (Internet image)

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

1. Cases in which investment incentives do not apply in Vietnam

According to Clause 5, Article 15 of the Law on Investment 2020, the investment incentives applied to the objects mentioned in Points b, c and d Clause 2 of Article 15 of the Law on Investment 2020 do not apply to:

- Projects on investment in mineral mining;

- Projects on investment in manufacturing/sale of goods/services subject to special excise tax according to the Law on Special Excise Tax, except for projects on manufacturing of automobiles, aircrafts and yachts.

- Projects on investment in commercial housing construction prescribed by the Law on Housing.

2. Forms of investment incentives in Vietnam

According to Clause 1, Article 15 of the Law on Investment 2020, forms of investment incentives:

- Corporate income tax incentives, including application of a lower rate of corporate income tax for a certain period of time or throughout the investment project execution; exemption from and reduction of tax and other incentives prescribed by the Law on Corporate Income Tax.

- Exemption from import tax on goods imported to form fixed assets; raw materials, supplies and components for manufacturing purposes in accordance with regulations of law on import and export tax;

- Exemption from and reduction of land levy and land rents;

- Accelerated depreciation, increasing the deductible expenses upon calculation of taxable income.

3. Entities eligible for investment incentives in Vietnam

According to Clause 2, Article 15 of the Law on Investment 2020, entities eligible for investment incentives in Vietnam include:

- Investment projects in business lines eligible for investment incentives specified in Clause 1 Article 16 of the Law on Investment 2020;

- Investment projects located in the areas eligible for investment incentives specified in Clause 2 Article 16 of the Law on Investment 2020;

- Any investment project whose capital is at least VND 6,000 billion of which at least VND 6,000 billion is disbursed within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines and which satisfies any of the following criteria:

The total revenue is at least VND 10,000 billion per year within 03 years from the year in which the revenue is earned or the project has more than 3,000 employees;

- Projects on investment in social housing construction; investment projects located in rural areas and employing at least 500 employees; investment projects that employ persons with disabilities in accordance with regulations of law on persons with disabilities.

- Hi-tech enterprises, science and technology enterprises and science and technology organizations; projects involving transfer of technologies on the List of technologies the transfer of which is encouraged in accordance with regulations of the Law on Technology Transfer, science and technology enterprise incubators prescribed by the Law on High Technologies and Law on Science and Technology;

Enterprises manufacturing and providing technologies, equipment, products and services with a view to satisfaction of environment protection requirements prescribed by the Law on Environment Protection;

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