Newly issued regulations on special investment incentives

LEGAL UPDATES

Newly issued regulations on special investment incentives

On October 6th, 2021, the Prime Minister issued Decision 29/2021/QD-TTg on special investment incentives. Decision No. 29/2021/QD-TTg clearly stipulates special investment incentives on Corporate income tax rate; corporate income tax exemption and reduction period; land rent, water surface rent. 

Specifically, economic organizations implementing investment projects specified at Point b, Clause 2, Article 20 of the Law on Investment are entitled to the preferential tax rate of 9% for a period of 30 years. The preferential tax rate of 7% for a period of 33 years will apply to income from investment projects in one of the following cases: 

  • New investment projects (including the expansion of such newly established projects) of innovation centers, research and development centers with a total investment capital of 3,000 billion VND or more, disbursing at least VND 1,000 billion within 03 years from the date of issuance of the Investment Registration Certificate or the Decision approving the investment policy.
  • The investment projects falling under the subjects specified at Point b, Clause 2, Article 20 of the Law on Investment and meeting one of the four criteria under the Decision.
  • The preferential tax rate at 5% for a period of 37 years will be applied to income from the activities of the objects or investment projects in one of the following cases:

+ The National Innovation Center was established under the Prime Minister’s decision. 

+ The investment projects falling under the subjects specified at Point b, Clause 2, Article 20 of the Law on Investment and meeting one of the following four criteria: (i) Being a level-2 high-tech project; (ii) there are Vietnamese enterprises participating in the chain of level-2; (iii) added value accounts for more than 40% of the total cost of final output products provided by economic organizations; (iv) meeting the criteria for technology transfer level-2.  

Decision 29/2021/QD-TTg took effect from October 6th, 2021.

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This legal update is for general information only and is not a substitute for legal advice.