Corporate income tax incentives for new investment project in Vietnam

One issue investors pay much attention when operating projects in Vietnam is corporate income tax incentives which is considered as a tool for attracting foreign investment. If a foreign-owned company sets up a new investment project, that one must satisfy the following conditions to get the corporate income tax incentives:

Regarding the company:

  • Observing accounting, invoice and documents regulations and register and pay tax as declared;
  • Separately accounting the income from the business entitled to corporate income tax incentives.

Regarding the new investment project:

  • Project which is granted the first Investment Registration Certificate from January 1st 2014 and generate turnover from the date of issue of such certificate;
  • Domestic investment project associated with the establishment of new enterprises which have investment capital of under 15 billion VND and does not belong to the list of conditional business sectors and is granted the Investment Registration Certificate from January 1st 2014;
  • Investment project independent from projects of operating company (including investment project which have investment capital under 15 billion VND and does not belong to the list of conditional business sectors) which is granted Investment Registration Certificate from January 1st 2014 to execute this independent project.

New investment projects which are not subjected to corporate income tax incentives:

  • Investment projects formed from the splitting, separation, merger or transformation of the company in accordance with the laws;
  • Investment projects formed from ownership conversion (including implementation of new investment projects with assets, business locations and lines of enterprises for continued production and business activities and acquisition of operating investment projects).

Tax exemption and tax reduction:

  • Tax exemption for 4 years, 50% reduction of payable tax amounts for 09 subsequent years are applicable to:
    • New investment projects executed in special difficult socio-economic conditions areas; economic zones, high-tech zones;
    • New investment projects in science, technology and infrastructure;
    • New investment projects in environment protection, waste disposal;
    • New investment projects in manufacturing products in the list of priority agricultural products.
  • Tax exemption for 4 years, 50% reduction of payable tax amounts for 05 subsequent years are applicable to:
    • New investment projects in socialized fields executed in areas not belong to the list of difficult or special difficult social economic condition areas.
  • Tax exemption for 02 years, 50% reduction of payable tax amount for 04 subsequent years are applicable to:
    • New investment projects executed in difficult social economic condition areas;
    • New investment projects manufacturing: hi-class steel, energy-saving products, machinery and equipment for agriculture, forestry, fishery and salt production, irrigation and drainage equipment, livestock and aquatic animal feed; development of traditional crafts and trades;
    • New investment projects executed in Industrial Zones (except industrial zones having favorable conditions).

Legal consulting services on investment and enterprises at ICTLAW:

  • Consult about regulations and procedures related to investment and foreign investment in Vietnam;
  • Consult about regulations on enterprises and procedures for establishment of enterprises in Vietnam, establishment of foreign-owned enterprises in Vietnam;
  • Consult about regulations, procedures, application for Investment Registration Certificate, Business Registration Certificate and sublicenses;
  • Consult about conditional business sectors and detailed conditions for each sector as required by Clients;
  • Draft, submit the application and work with state-authorized agencies when Clients grant authorization;
  • Consult about related legal issues: tax, contracts, Vietnamese labor, foreign labor, social insurance, commercial franchise, intellectual property…
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