Decision 29/2021/QD-TTg on special investment incentives

DECISION

PROVISIONS ON SPECIAL INVESTMENT INVESTMENT INVESTMENT INCOME

Pursuant to the June 19, 6 Law on Government Organization; The Law amending and supplementing a number of articles of the Law on Government Organization and the Law on Organization of Local Government dated November 2015, 22;

Pursuant to the November 17, 6 Investment Law;

Pursuant to the June 03, 6 Law on Corporate Income Tax; The Law amending and supplementing a number of articles of the Law on Corporate Income Tax dated June 2008, 19 and the Law amending and supplementing a number of articles of the Law on Taxation dated November 6, 2013;

Pursuant to Decree No. 46/2014/ND-CP dated May 15, 5 of the Government on collection of land rent and water surface rent; Decree No. 2014/135/ND-CP dated September 2016, 09 of the Government amending and supplementing a number of articles of the Decrees stipulating the collection of land use levy, land rent and water surface rent;

Pursuant to the Government's Decree No. 31/2021/ND-CP dated March 26, 3 detailing and guiding the implementation of a number of articles of the Investment Law;

At the proposal of the Minister of Planning and Investment;

The Prime Minister promulgates the Decision on special investment incentives.

Article 1. Scope of adjustment and subject of application

1. This Decision prescribes the level, time and conditions for applying special investment incentives to investment projects specified in Clause 2, Article 20 of the Law on Investment.

2. This Decision applies to state agencies, organizations and individuals related to special investment incentives specified in Clause 1 of this Article.

Article 2. Explain words

1. Vietnamese enterprise means an enterprise or cooperative established and operating in accordance with Vietnamese law and does not fall into one of the cases specified in Clause 1, Article 23 of the Law on Investment.

2. Total expenses for research and development activities are all expenses for research and development activities of an investment project, determined according to the provisions of Clause 4, Article 3 of this Decision.

Article 3. Criteria on high technology, technology transfer, Vietnamese enterprises participating in the chain, value of domestic production

1. The project meets the high-tech criteria specified at Point d, Clause 6, Article 20 of the Government's Decree No. 31/2021/ND-CP dated March 26, 3 detailing and guiding the implementation of a project. The number of articles of the Law on Investment (hereinafter referred to as Decree No. 2021/31/ND-CP) is determined as follows:

a) Level 1 high-tech project is a project involving high-tech application, research and development, and production of high-tech products, and concurrently satisfying the following three conditions:

- Revenue from high-tech products reaches at least 70% of the total annual net revenue of the project;

– Total expenditure on research and development activities over total net revenue minus input value (including value of raw materials and components for imported production and domestic purchase) annually of the investment project. private investment is at least 0,5%;

- The ratio of employees directly conducting research and development to the total number of employees of investment projects of economic organizations is at least 1%.

b) Level 2 high-tech project is a project involving high-tech application, research and development, and production of high-tech products, and concurrently satisfying the following three conditions:

- Revenue from high-tech products reaches at least 80% of the total annual net revenue of the project;

– Total expenditure on research and development activities over total net revenue minus input value (including value of raw materials and components for imported production and domestic purchase) annually of the investment project. private investment is at least 1%;

- The ratio of employees directly conducting research and development to the total number of employees of investment projects of economic organizations is at least 2%.

2. Vietnamese enterprises participating in the chain as prescribed at Point d, Clause 6, Article 20 of Decree No. 31/2021/ND-CP are determined as follows:

a) A Vietnamese enterprise participating in a level 1 chain is a case where a Vietnamese enterprise that is not specified in Clause 1, Article 23 of the Law on Investment participates in the value chain and meets the following two conditions simultaneously:

– There are from 30% to 40% of Vietnamese enterprises out of the total number of enterprises participating in and performing contracts for assembly, supply of components, materials and services to produce products;

– At least 30% of the product cost is created by Vietnamese enterprises participating in the value chain.

b) Vietnamese enterprises participating in the level 2 chain are cases where a Vietnamese enterprise that is not specified in Clause 1, Article 23 of the Law on Investment participates in the value chain and meets the following two conditions simultaneously:

– More than 40% of Vietnamese enterprises out of the total number of enterprises participate in and perform contracts for assembly, supply of components, materials and services to produce products;

– At least 40% of the product cost is created by Vietnamese enterprises participating in the value chain.

3. Value added is the cost of all goods and services minus expenses paid to foreign parties (excluding raw materials imported or imported on the spot with a Certificate of Origin in Vietnam according to regulations). current regulations), including:

a) Cost of input materials, depreciation of fixed assets, machinery and equipment, cost of tools and instruments imported from abroad;

b) Copyright fees, technology transfer fees, management expenses, selling expenses, financial expenses and other expenses payable to foreign parties.

4. Total expenditure on research and development activities includes:

a) Annual recurrent expenditures for research and development activities;

b) Expenses for training activities and training support for research and development workers of economic organizations, science and technology organizations, and training institutions in Vietnam;

c) Spending on research and development cooperation with organizations and individuals; spending on contracting or sponsoring organizations and individuals to carry out research and development projects of the enterprise;

d) Fees for copyright, transfer of ownership and right to use industrial property objects in service of research and development activities; fees for registration for recognition or protection of inventions and utility solutions in Vietnam;

dd) Depreciation of infrastructure investment and fixed assets for research and development activities.

5. Laborers directly conducting research and development include employees with professional qualifications from college or higher who meet the following 02 criteria simultaneously:

a) Employees with college degrees do not exceed 30%;

b) Having signed a labor contract with a term of 01 year or more or an indefinite contract working at the research and development department or a division with similar functions of the enterprise.

6. Technology transfer criteria are determined as follows:

a) Level 1 technology transfer

- To be granted a certificate of technology transfer encouraging transfer in accordance with the law on technology transfer;

– Carry out technology transfer to less than 03 Vietnamese enterprises within 05 years from the date of issuance of the Investment Registration Certificate or Decision on approval of investment policy or a written agreement with the competent authority. competent country.

b) Level 2 technology transfer

- To be granted a certificate of technology transfer encouraging transfer in accordance with the law on technology transfer;

- To transfer technology to 03 or more Vietnamese enterprises within 05 years from the date of issuance of the Investment Registration Certificate or the Decision approving the investment policy or a written agreement with the agency. competent state agency.

For investment projects that are allocated, leased or changed land use purpose by the State, the period of 05 years specified at Points a and b of this Clause is counted from the date the investor is granted a decision on land allocation. decision on land lease, decision on change of land use purpose. In case the investor has made a decision on land allocation, land lease, or land use purpose change, but is late in handing over the land, the time limit of 05 years is counted from the date of handing over the land in the field.

Article 4. Principles of application and adjustment of special investment incentives

Special investment incentives and support specified in this Decision shall comply with the provisions of Clause 6, Article 20 of Decree No. 31/2021/ND-CP and the following principles:

1. Special investment incentives are applied to new investment projects and expansion investment projects.

2. Special investment incentives are specified in the Investment Registration Certificate, the Decision approving the investment policy or the written agreement with the competent state agency.

3. During the period of enjoyment of special investment incentives, any economic organization that satisfies the conditions for actual incentives shall enjoy such incentives for the remainder of the incentive period. The remaining incentive application period is determined by the incentive period according to the actual incentive conditions, minus the corresponding number of years of corporate income tax exemption or reduction, and the number of years of applying the preferential income tax rate. enterprises, the number of years of land rent and water surface rent exemption and reduction has been applied previously.

4. Except for the case specified in Clause 3 of this Article, economic organizations that fail to fulfill their commitments and conditions for application of special investment incentives shall settle as follows:

a) In case of not yet enjoying special investment incentives, economic organizations are not entitled to incentives as prescribed in this Decision;

b) If they have declared to enjoy special investment incentives but actually do not meet the conditions for enjoying such incentives, they will not be entitled to special investment incentives, and at the same time, economic organizations must declare and pay the have enjoyed incentives in the years that do not meet the incentive conditions (if any) and the amount of late payment and fines for violations of the law in accordance with the law on tax administration.

5. The time of application of the preferential tax rate, the time of exemption and reduction of corporate income tax shall comply with the provisions of the law on corporate income tax. The time of application of incentives for exemption and reduction of land rents and water surface rents shall comply with the provisions of the law on land.

Article 5. Corporate income tax rate

1. The preferential tax rate of 9% for a period of 30 years applies to incomes of economic organizations from the implementation of investment projects that fall into the categories specified at Point b, Clause 2, Article 20 of the Law on Investment.

2. The preferential tax rate of 7% for a period of 33 years applies to income from investment projects in one of the following cases:

a) New investment projects (including expansion of such newly established projects) of innovation centers, research and development centers with total investment capital of 3.000 billion VND or more; disburse at least VND 1.000 billion within 03 years from the date of issuance of Investment Registration Certificate or Decision on approval of investment policy.

b) The investment project belongs to the subjects specified at Point b, Clause 2, Article 20 of the Law on Investment and meets one of the following four criteria:

- Is a high-tech project level 1;

– There are Vietnamese enterprises participating in the level 1 chain;

- The added value accounts for over 30% to 40% of the total cost of the final output products provided by economic organizations;

– Meet the criteria for technology transfer level 1.

3. The preferential tax rate of 5% for a period of 37 years applies to incomes from the activities of an investor or an investment project in one of the following cases:

a) The National Innovation Center is established under the Prime Minister's decision.

b) The investment project belongs to the subjects specified at Point b, Clause 2, Article 20 of the Law on Investment and meets one of the following four criteria:

- Is a high-tech project level 2;

– 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;

– Meet the criteria for technology transfer level 2.

Article 6. Enterprise income tax exemption and reduction period

1. 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.

2. Tax exemption 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.

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

Article 7. Incentives for land rent and water surface rent

1. Exemption from land rent and water surface rent for 18 years and a reduction of 55% of land rent and water surface rent for the remaining period for economic organizations implementing investment projects in the cases specified in Clause 1, Article 5. This decision.

2. Exemption from land and water surface rents for 20 years and a reduction of 65% of land and water surface rents for the remaining period for economic organizations implementing investment projects in the case of investment specified in Clause 2. Article 5 of this Decision.

3. Exemption from land and water surface rents for 22 years and a reduction of 75% of land and water surface rents for the remaining time, for entities or economic organizations implementing investment projects in the cases specified in Clauses 3 and 5 of this Article. XNUMX Article XNUMX of this Decision.

Article 8. Implementation organization

1. Economic organizations self-declare the satisfaction of criteria and conditions; carry out procedures for certifying the satisfaction of criteria and conditions (if any) and carry out procedures for enjoying special investment incentives in accordance with law.

2. Tax and financial management agencies shall consider enjoying special investment incentives in accordance with the law on tax administration and the law on land.

Article 9. Effect and implementation responsibilities

1. This Decision takes effect from the date of signing and promulgation.

2. After 5 years of implementation, the Ministry of Planning and Investment summarizes and evaluates the impact and effectiveness of the special investment incentive policy and reports it to the Prime Minister for consideration and adjustment accordingly. .

3. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People's Committees of the provinces and centrally-run cities and the relevant agencies shall be responsible for the implementation of this Decision.