Tax exemption and reduction for special investment projects

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Decision No. 29/2021/QD-TTg of the Prime Minister specifying the preferential corporate income tax rates applicable to special investment projects.

Specifically, in Article 5 Decision 29/2021/QD-TTg, there are 3 levels of special investment incentives regarding corporate income tax as follows:

*First, the preferential tax rate of 9% for a period of 30 years is applied to incomes of economic organizations from the implementation of investment projects in industries or professions with special investment incentives with an investment capital of from VND 30,000 billion or more, disbursing at least VND 10,000 billion within 03 years from the date of issuance of the Investment Registration Certificate or approval of investment policy.

*Secondly, the preferential tax rate of 7% for a period of 33 years is applied to income from newly established investment projects (including the expansion of such newly established projects) of innovation centers. , research and development center with a total investment capital of 3,000 billion VND or more, disbursing at least 1,000 billion VND within 03 years from the date of issuance of the Investment Registration Certificate or Decision investment policy agreement.

Investment projects in industries and trades with special investment incentives with an investment capital of VND 30,000 billion or more, disbursed at least VND 10,000 billion within 3 years since the date of issuance of the Certificate of an investment Registration or approve an investment policy and meet one of the following four criteria:

Being a high-tech project level 1; There are Vietnamese enterprises participating in the level 1 chain; Value added accounts for over 30% to 40% of the total cost of the final output products provided by economic organizations; meeting the criteria for technology transfer level 1c also applies the preferential tax rate of 7% for a period of 33 years.

* Third, the preferential tax rate of 5% for a period of 37 years is applied to income from the object or investment project in one of the following cases:

- The National Innovation Center was established under the Prime Minister's decision.

- Investment projects in industries or trades with special investment incentives with an investment capital of VND 30,000 billion or more, disbursed at least VND 10,000 billion within 3 years from the date of issuance of the Certificate on investment registration or approval of investment policy and meet one of the following four criteria:

+ Being a level 2 high-tech project;

+ There are Vietnamese enterprises participating in the level 2 chain;

+ The added value accounts for more than 40% of the total cost of the final output products provided by the economic organization;

+ Satisfying the criteria for technology transfer level 2.

Period of corporate income tax exemption and reduction: Tax exemption for 6 years, 50% reduction of payable tax for the next 13 years.

In addition, Decision No. 29/2021/QD-TTg also specifically stipulates the duration of corporate income tax exemption and reduction:

- Tax exemption for 5 years, 50% reduction of payable tax for the next 10 years, for incomes of economic organizations implementing investment projects in the cases specified in Clause 1, Article 5 of this Decision.

- Exemption from tax for 6 years, 50% reduction of payable tax for the next 12 years, for incomes of economic organizations implementing investment projects in the cases specified in Clause 2, Article 5 of this Decision.

- Tax exemption for 6 years, 50% reduction of payable tax for the next 13 years for income from activities of entities or economic organizations implementing investment projects in the cases specified in Clause 3, Article 5 this decision.

Decision No. 29/2021/QD-TTg takes effect from the date of signing and promulgation.