Vietnam cuts taxes for investors

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vietnamVietnam has introduced a draft law on corporate income tax prepared by the Ministry of Finance which cuts taxes for investors in new projects in the country’s industrial zones.

Investors will be exempted from corporate income taxes in the first two years of operation, the draft law says. They will also enjoy further reductions of 50 per cent in the following four years.

According to Vietnam’s Ministry of Planning and Investment, said the changes were part of government plans to provide more investment incentives to investors. If the draft law is approved, it is expected to attract more investment in industrial zones “particularly during a time of economic difficulties.”

Before January 1, 2009, new investors to IZs enjoyed a corporate income tax reduction of 20 per cent for the first 10 years. For the first12 years, investors in production sectors were taxed only 15 per cent. However, the country decided to remove the incentives when the revised corporate income tax took effect on January 1, 2009.

However, the removal of the incentives made it difficult for industrial zones to attract investors as land lease was expensive due to high costs of land compensation and infrastructure construction.

The Ministry of Finance also said reinstalled incentives needed to be selective, adding that none were necessary for Hanoi, Hai Phong, Da Nang, Ho Chi Minh City and Can Tho as these cities received many other incentives.

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Reading Time: 1 minute

Vietnam has introduced a draft law on corporate income tax prepared by the Ministry of Finance which cuts taxes for investors in new projects in the country’s industrial zones.

Reading Time: 1 minute

vietnamVietnam has introduced a draft law on corporate income tax prepared by the Ministry of Finance which cuts taxes for investors in new projects in the country’s industrial zones.

Investors will be exempted from corporate income taxes in the first two years of operation, the draft law says. They will also enjoy further reductions of 50 per cent in the following four years.

According to Vietnam’s Ministry of Planning and Investment, said the changes were part of government plans to provide more investment incentives to investors. If the draft law is approved, it is expected to attract more investment in industrial zones “particularly during a time of economic difficulties.”

Before January 1, 2009, new investors to IZs enjoyed a corporate income tax reduction of 20 per cent for the first 10 years. For the first12 years, investors in production sectors were taxed only 15 per cent. However, the country decided to remove the incentives when the revised corporate income tax took effect on January 1, 2009.

However, the removal of the incentives made it difficult for industrial zones to attract investors as land lease was expensive due to high costs of land compensation and infrastructure construction.

The Ministry of Finance also said reinstalled incentives needed to be selective, adding that none were necessary for Hanoi, Hai Phong, Da Nang, Ho Chi Minh City and Can Tho as these cities received many other incentives.

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