by Apra Law

Vietnam in the process of international economic integration has been participating more and more deeply and widely as a member of world economic organizations such as WTO, ASEAN, APEC… giving Vietnam many opportunities in attracting investment capital from foreign investors. One of the policies Vietnam implements to call on investors to boldly invest capital is tax incentives.

What is foreign investment?

Foreign investment means that organizations and individuals of one country bring capital in different forms into another country to conduct business activities for profit.

Foreign investment is made in the form of direct investment or indirect investment.

What are tax incentives?

Tax incentives are the State’s creation of certain terms and conditions for taxpayers to carry out production and business activities or provide services in the fields, areas or types of tax incentives. developing countries.

Government tax incentives for foreign investors in Vietnam

Tax incentives are a part of FDI policy that is always placed in relation to the orientation and overall FDI policy. Therefore, the financial incentive policy often focuses on tax policies such as: personal income tax, import and export tax, personal income tax,… Specifically:

First, corporate income tax incentives

State has preferential tax rates (10% up to 15 years and 20% up to 10 years); tax exemption or reduction for a definite term (up to 9 years); allow loss transfer (within 5 years); exempt from tax on transferring profits abroad; tax refund on reinvested profits; allows for quick depreciation…

In order to enjoy these incentives, the Law on Corporate Income Tax in 2020 has stipulated many different preferential criteria such as: geographical areas, economic zones, high-tech zones; in the field of high technology, scientific research and technological development, investment in the development of especially important infrastructure of the State, production of software products, the field of education – training and the environment…

Second, preferential import tax

The State shall exempt import tax on equipment, supplies, means of transport and other goods for the implementation of investment projects in Vietnam. Incomes from technology transfer activities for projects eligible for investment incentives are exempt from income tax.

Goods are exempt from export tax and import tax under international treaties to which the Socialist Republic of Vietnam is a signatory.

Third, incentives for land use tax

Exemption and reduction of land rent, land use levy and land use tax. According to Decree 210/2013/ND-CP of the Government issued on December 19, 2013 on policies to encourage enterprises to invest in agriculture and rural areas:

– Investors with agricultural projects with special investment incentives if they are allocated land by the State, shall be exempted from land use levy for such investment projects.

– Investors with agricultural projects with investment incentives, if allocated land by the State, will be entitled to a reduction of 70% of the land use levy payable to the state budget for such investment projects.

– Investors with agricultural projects encouraged for investment, if allocated land by the State, shall be entitled to a 50% reduction of the land use levy payable to the state budget for such investment projects.

Fourth, tax exemption and reduction for imported capital goods (capital)

The government does not collect taxes on the import of capital goods (including machinery and spare parts, spare parts, raw materials) serving incentive industries such as export-oriented industries, or industries implementing strategic policies. industrial strategy of the country, projects to encourage investment. In order to meet the requirements of integration commitments, and at the same time to complete export preferential policies and attract FDI, the Law on Import Tax and Export Tax continued to be updated and revised in 2001, 2005 and 2016. From 2016 up to now, preferential policies have been applied under the Law on Import and Export Tax 2016. Accordingly, the Law has added high-tech enterprises, science and technology enterprises, and scientific organizations. study – technology is exempt from import tax on raw materials, supplies and components that cannot be produced domestically within 5 years from the date of production; supplementing regulations on tax exemption for raw materials, supplies and components imported at home that cannot be produced for the production and assembly of medical equipment that should be prioritized for research and manufacture.

A number of import and export tax incentives are being applied such as: Exemption from import tax on goods imported for processing for foreign countries and when exporting and returning products to foreign parties, they are exempt from export tax; Goods imported for processing that are exempt from tax, goods temporarily imported for re-export and goods being raw materials and supplies for the production of exported goods can be extended the tax payment time to 275 days from the date of opening the declaration. customs; goods temporarily imported for re-export may be extended the tax payment time to 15 days from the expiration date; Exemption from import tax on goods to create fixed assets for investment projects in areas of special investment encouragement, investment promotion fields and investment projects in geographical areas with conditions difficult socio-economic…

In addition, the State also offers royalty tax incentives and a number of other tax incentives to encourage foreign investors to invest in Vietnam. Tax incentives are one of the policies aimed at increasing foreign investment attraction in Vietnam, contributing to the country’s richer and stronger development, and at the same time creating a favorable environment for investors. when coming to Viet Nam.

Above is the advisory article on “Tax incentive policy in attracting foreign investment in Vietnam” of Apra Law Company Limited. If you still have questions about the above issues and need to be answered, please contact the hotline for advice and support.


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