Optimising benefits from tax incentives

In order to attract inbound investment, the Vietnamese government offers investors a variety of incentives and support for investment, including tax incentives for a certain period of time or the entire duration of the project. Of these, corporate income tax incentive is a big concern for most investors when doing business in Vietnam.

Tax incentives are applied in the form of preferential duration of corporate income tax (CIT) exemption (tax holiday), CIT reduction, preferential CIT rates, exemption or reduction of import tax on goods imported as fixed assets, raw materials, supplies, and parts used for the project, and exemption or reduction of land rental and land use tax, among others.

The Investment Law regulates investment incentives and tax laws regulate CIT incentives. To be entitled to tax incentives, the enterprises and the projects need to meet the conditions stipulated in both laws. However, it could be very damaging if the investor incorrectly determined the incentives applying to their business.

Please contact our experts to receive the full article which features following points:

• Conditions to apply CIT incentives
• Inconsistent regulations on tax incentives between different competent authorities
• Risks in incorrect determination of CIT incentives
• Planning points