Tax benefits for enterprises in Vietnam
Vietnamese legislation encourages investment by tax benefits and incentives in Vietnam in certain sectors such as education, health, sports and culture, high technology, environmental protection, research, infrastructure development and computer software. Since October 15, 2014 new benefits on Corporate Tax came into effect with respect to profit from the development and implementation of new technologies.
I. Full exemption from Corporate Tax for the whole period of the enterprise’s existence in Vietnam
- The company’s income from social activities in the field of education and training, additional training in the areas of health, culture, sports and the environment;
- The company’s income from the implementation of investment projects for social housing;
- Incomes from the following business:
- Planting, care and protection of forests;
- Production, reproduction and breeding of new varieties of plants and breeds of animals;
- Investment into the processing of agricultural products, increasing the shelf-life of agricultural products, seafood and other food products.
II. Full exemption from corporate tax for 4 years, from 50% of corporate tax for 11 years
- Income of enterprises from the implementation of new investment projects, in special parks and high technology zones and information techno parks, which are established in accordance with the decisions of the Prime Minister of Vietnam;
- Income from the implementation of new investment projects, including:
- Scientific research and technological development;
- Using high technology, according to the list approved by the Government of Vietnam;
- Incubation of high-tech enterprises*;
- Venture capital used for high-tech development, according to the list approved by the Government of Vietnam;
- Investing in the construction and trade of high-tech incubators, high-tech corporate incubators;
- Investing in the development of water bodies, power plants;
- Water supply and sewerage systems;
- Road bridges, interchanges, railways, airport;
- Sea ports, river ports;
- Railway stations and other important infrastructure works, approved by the Prime Minister of Vietnam;
- Production of software products, according to the list approved by the Government of Vietnam;
- Production of composite materials, light building materials, precious and rare materials;
- Production of renewable energy sources, clean energy, energy from waste destruction;
- Development of biotechnology;
- Income from the implementation of new investment projects in the field of environmental protection, including: Production of equipment for cleaning the environment, equipment for monitoring and analysis of the environment;
- Pollution treatment and environmental protection;
- Collection and treatment of sewage, exhaust and solid waste;
- Processing, recycling of waste.
- Enterprises that use high technology;
- Income from the implementation of new investment projects in the productive sector, meeting one of the following two criteria (except of the projects for production of goods with excise tax and mining):
- Projects with investment capital of at least 6 trillion VND (225 000 000 USD), which will be paid within 3 years from the date of issue of the investment certificate and have a total minimum annual turnover of 10 trillion VND /(355 000 000 USD) per year, in 3 years from the beginning of the operation;
- Projects with investment capital of at least 6 trillion VND (225 000 000 USD), which will be paid within 3 years from the date of issuance of the investment certificate and the number of employees will be more than 3000 people no later than 3 years from the date of the beginning of the operation.
- Support for the production of raw materials for textiles, clothing, leather shoes, electronics and electrical engineering;
- The assembling of vehicles that are not produced in the domestic market, however, such production must comply with the technical standards of the European Union adopted since January 1, 2015.
In cases where a large-scale, high-tech or new project requires special investment, the duration of the tax benefits may be extended, but the total duration should not exceed 30 years.
*High-tech cultivation means the process of creating, improving or commercializing high technology from technological ideas, scientific research results or helping to complete unfinished developments, through the necessary technical infrastructure, resources and services.
Incubation of high-tech enterprises means the process of formation and development of high-tech enterprises, through the provision of technical assistance, the necessary resources and services.
High-tech nurseries are institutions that provide favorable conditions for technical infrastructure, the necessary resources and services for high-tech incubation, for the creation of a high-tech enterprise.
III. Full exemption from corporate tax for 2 years, from 50% of corporate tax for 2 years, corporate tax rate of 17% for 11 years
Income from the implementation of the following new investment projects:
- Production of high-quality steel;
- Production of energy-saving products;
- Production of machines and equipment for agricultural, forestry, fishing and salt production;
- Production of irrigation equipment;
- Production and processing of feed for animals, poultry and aquatic animals;
- Development of traditional professions.
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