Since the Law on High Technology (2008) and the Law on Investment (2020) were promulgated, along with that, the Government and ministries have continuously issued many legal documents and guiding documents. Directly related to the development of hi-tech parks, the legal issues have been basically solved well, the investment incentives and assistance policies are continuously adjusted and concretized in legal documents as the basis for the diversification and strong promotion of investment activities in hi-tech parks.
The concept of “High-tech park”
“High-tech park” means a multi-functioned economic-technical park with delimited boundaries, established under a decision of the Prime Minister, aiming to research into, develop and apply high technologies; nurse high-tech enterprises, train high tech manpower, produce and trade in high-tech products. Within a high-tech park, there may be export-processing zones, bonded warehouses, tax suspension warehouses, and residential quarters.
Hi-tech park is one of the objects entitled to investment incentives recognized in the 2020 Law on Investment, specifically: Hi-tech Park is an investment incentive area according to Clause 2, Article 16 of the 2020 Law on Investment, high-tech activities are also business lines eligible for investment incentives under Point a, Clause 1 of this Article.
Since the Regulation on High-Tech Parks promulgated together with Decree No. 99/2003/ND-CP dated August 28, 2003 of the Government was promulgated, the Hi-Tech Park has clearer regulations, specifically incentives. In 2008, the Law on High Technology was promulgated, demonstrating the Government’s interest in the Hi-Tech Park, and serving as a basis for determining investment incentives.
Specific investment incentives of the Hi-Tech Park
Investment incentives are generally applied to the beneficiaries of investment incentives.
Incentives for hi-tech parks are generally prescribed for the beneficiaries of incentives in the 2020 Law on Investment, which provides for general preferences for enterprises in hi-tech parks, specifically:
Firstly, 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.
For example, according to Decree No. 74/2017/ND-CP stipulating specific mechanisms and policies for Hoa Lac Hi-Tech Park (CNC) (“Decree 74”), investment projects in the Industrial Park Hoa Lac high-tech shall enjoy the highest tax incentives in accordance with the provisions of the investment law and tax law, specifically:
(i) An enterprise that has income generated from the development of a new investment project in the HHTP is liable to the tax rate of 10% within 15 years, qualifies for a tax exemption within a maximum period of 04 years and gets 50% reduction in the amount of tax payable within 09 successive years in accordance with regulations in Clause 1 Article 13, Clause 1 Article 14 of the Law on corporate income tax.
(ii) An enterprise that has income generated from the development of a new investment project which has total investment of at least VND 4,000 billion in the HHTP is liable to the tax rate of 10% within 30 years, qualifies for a tax exemption within a maximum period of 04 years and gets 50% reduction in the amount of tax payable within 09 successive years from the first year in which it generates taxable income.
Secondly, exemption from and reduction of land levy and land rents. For example, under Decree No. 74, a preferential policy on land in Hoa Lac Hi-Tech Park is regulated as follows: In the cases where land is used for infrastructure management and operation works, land users shall be exempt from land rents during the entire rental period; Land users shall be exempt from non-agricultural land tax during the entire use period
Thirdly, accelerated depreciation, increasing the deductible expenses upon calculation of taxable income.
Fourthly, enterprises in high-tech zones may enjoy special investment incentives if the hi-tech parks fully satisfy the provisions of Article 20 of the 2020 Law on Investment.
Exclusive incentives for investors in Hi-Tech Parks.
Enterprises in hi-tech zones are entitled to special incentives for hi-tech parks as stipulated in the 2008 Law on High Technology and the Regulation on hi-tech zones promulgated together with Decree No. 99/2003/ND-CP, such as:
– Being prioritized the allocation of budget capital for investment in building high-tech parks and a number of technical infrastructural items outside high-tech parks in direct service of the operation of high-tech parks.
– Being treated equally and created favorable conditions for organizations, enterprises and individuals at home and abroad to invest in high-tech parks; for Vietnamese and foreign scientists and specialists to work in high-tech parks.
– Being protected the ownership over investment capital, assets, profits, intellectual property rights, other legitimate rights and interests of organizations, enterprises and individuals operating in high-tech parks; being guaranteed that their lawful properties in high-tech parks not be requisitioned or confiscated through administrative measures and nationalization in the period of execution of investment projects.
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