Vietnam expands incentives for innovation, research
HANOI - Vietnam's Prime Minister, Pham Minh Chinh, has signed off amendments to the Investment Law which provide Special Investment Incentives for a number of new and expanded projects. These include innovation centres and research and development (R&D) centres with total investment capital of VND 3,000 billion (US$130 billion)1 or more, of which at least VND 1,000 billion (US$43 billion) is disbursed within three years from the date of the investment registration certificate (IRC) or approval of investment policy.
In a Client Alert, lawyers Baker McKenzie say investment projects in investment-incentivised industries with investment capital of VND 30,000 billion (US$1.3 billion) or more, of which at least VND 10,000 billion (US$434 million) is disbursed within three years from the date of IRC or approval of investment policy, are also eligible.
The Notice refers to high-technology projects are those projects that apply, research and develop high technology, manufacture high-technology products and simultaneously meet three conditions: (i) at least 70% of revenue from high-technology products over total annual net revenue, (ii) at least 0.5% of annual R&D cost over total annual net revenue minus input values (including materials and manufacturing components), and (iii) at least 1% of employees who directly perform R&D activities over total employees.
Eligible taxpayers will be entitled to one of the following Special Incentive Packages:
Package 1: Preferential corporate income tax (CIT) rate of 9% over a period of 30 years, five-year CIT exemption and 50% CIT reduction for subsequent 10 years; land and water surface lease exemption for 18 years and 55% reduction for the remaining years.
Package 2: Preferential CIT rate of 7% over a period of 33 years, six-year CIT exemption and 50% CIT reduction for subsequent 12 years; land and water surface lease exemption for 20 years and 65% reduction for the remaining years.
Package 3: Preferential CIT rate of 5% over a period of 37 years, six-year CIT exemption and 50% CIT reduction for subsequent 13 years; land and water surface lease exemption for 22 years and 75% reduction for the remaining years.
Further information -
Thanh Vinh Nguyen
Ho Chi Minh City
Thi Thanh Hoa Dao
Ho Chi Minh City