Legal update On New Policies Of Vietnam In October 2021: (i) Special Investment Incentives; (ii) VAT Policy For Fertilizers; And (iii) The Operating Of The petroleum Business.

19 October, 2021

 

BLawyers Vietnam would lead you on 03 legal issues as follows:

 

1. Special investment incentives

 

The Prime Minister issued Decision No. 29/2021/QD-Ttg dated 6 October 2021 on special investment incentives with the following contents:

 

• Vietnamese enterprises are enterprises and cooperatives established and operating under Vietnamese law and other than those specified in Clause 1, Article 23 of the Law on Investment.

 

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

 

• Special investment incentives are specified in the Investment Registration Certificate, the Decision on approval for investment guidelines, or agreed in writing with the competent authorities.
• For incomes from the implementation of investment projects specified at point b, Clause 2, Article 20 of the Law on Investment, business organizations shall be entitled to a preferential tax rate of 9% at the CIT rate for 30 years.
• Business organizations shall enjoy a preferential tax rate of 7% at the CIT rate for 33 years with the income from investment projects in one of the following cases:
• Investment projects on new establishment innovation centers, research, and development centers with total investment capital of VND3,000 billion or more, disbursing at least VND1,000 billion within 03 years from the date of issuance of the Investment Registration Certificate or the Decision on approval for investment guidelines.
• An investment project in the cases specified at point b, Clause 2, Article 20 of the Law on Investment and meets one of the following four criteria including (1) Being a level 1 high-tech project; (2) There are Vietnamese enterprises participating in the level 1 chain; (3) Value-added accounts for 30%-40% of the final product's cost; (4) Meeting the criteria for technology transfer level 1.
• Business organizations shall enjoy a preferential tax rate of 5% at the CIT rate for 37 years applies to income from the activities of an object or an investment project in one of the following cases:
• The National Innovation Center was established under the Prime Minister's decision.
• An investment project that falls under the subjects specified at Point b, Clause 2, Article 20 of the Law on Investment and meets one of the following four criteria (1) Being a high-tech project level 2; (2) There are Vietnamese enterprises participating in the level 2 chain; (3) Value-added accounts for 40% of the final product's cost; and (3) Meeting the criteria for technology transfer level 2.

 

1. VAT policy for fertilizers

 

On 7 October 2021, the General Department of Customs issued Official Letter No. 4749/TCHQ-TXNK to guide the VAT policy for fertilizers. The content of the guide is as follows:

 

• Fertilizers are not subject to value-added tax.
• Imported items, which are identified by specialized management agencies as "fertilizers" based on the standards prescribed by law, shall not be subject to VAT.

 

1. The operating of the petroleum business

 

On 11 October 2021, the Ministry of Industry and Trade issued Official Letter No. 6295/BCT-TTTN to stipulate the operating of petroleum business as follows:

 

• Regarding the Petrol Price Stabilization Fund:
• Setting up Petrol Price Stabilization Fund from Madut Oil VND 100/kg.
• The Petrol Price Stabilization Fund is applied to the price of gasoline E5RON92 (VND 950/liter), the price of diesel oil (VND 150/liter), and kerosene (VND 100/liter).
• The selling price of petrol after applying the Petrol Price Stabilization Fund are as follows:
• E5RON92 gasoline: not higher than VND 21,683/liter;
• RON95-III gasoline: not higher than VND 22,879/liter;
• 0.05S diesel oil: not higher than VND 17,545/liter;
• Kerosene: not higher than VND 16,622/liter;
• Fuel oil 180CST 3.5S: not higher than VND 17,097/liter.
• Setting up and spending for the use of the Petrol Price Stabilization Fund and the application of the new petrol and oil selling price shall be applied from 3 pm on 11 October 2021.

 

 

For further information, please contact: