Vietnamese and foreign organisations and individuals carrying on manufacturing and other business activities in the Chu Lai OEZ, including domestic investors, foreign-invested enterprises, foreign investors operating under business co-operation contracts, overseas Vietnamese operating under the Law on Foreign Investment in Viet Nam, and foreign investors doing business, but not under the Law on Foreign Investment in Viet Nam, shall enjoy the following tax incentives:
Corporate income tax:
Businesses shall be completely exempt from income tax for four years after taxable incomes are first generated and enjoy a 50 per cent rebate for nine subsequent years. Thereafter, a rate of 10 per cent shall apply to such projects for 15 years from the time of starting the business.
Existing companies which set up new production lines or expand old ones, renew technologies, set up waste treatment facilities or invest in enhancing productivity shall be exempt for four years from income tax on the increased incomes. They will also enjoy a 50 per cent rebate for seven subsequent years at most.
For foreign-invested enterprises and foreign parties to business co-operation contracts suffering losses after paying income tax may transfer such losses to subsequent years for deduction from their taxable incomes. Such transfers may be done for not more than 5 years.
Import tax and export tax:
Transfer of goods and services between the OEZ and other areas (Vietnamese territory excluding the OEZ) constitute import/export.
Import and export taxes applicable to these goods and services are as follows:
a) Goods originating from the OEZ's tariff area or inland, and goods imported from foreign countries into the non-tariff area shall be exempt from import tax.
b) For goods brought from the non-tariff area into the tariff area or inland:
�€“ If they are goods of foreign origin, import tax shall be paid as per current regulations;
�€“ If they are manufactured, processed, recycled or assembled in the non-tariff area:
+ If the goods have 40 per cent or more of their value originating from ASEAN (evidenced by certificates of ASEAN origin �€“ Form D), the CEPT preferential import tax rates shall apply.
+ If no imported raw materials or components are used, import tax shall not be paid.
+ If imported raw materials or components are used, import tax shall be imposed on the volume of the imported raw materials or components constituting such goods.
c) Goods manufactured, processed, recycled or assembled in the non-tariff area, when being exported to foreign countries, shall be exempt from export tax.
d) For tax-liable export goods, which are brought into the non-tariff area from inland or from the tariff area for export, export tax shall be paid as per current regulations.
e) Foreign-invested enterprises investing in the OEZ shall not have to pay import tax on raw materials, supplies and components imported for production for five years from the time of commencing production.
Regarding special consumption tax (SCT):
Goods and services manufactured and sold in the non-tariff area shall not be liable for SCT.
They include SCT-liable goods and services which are manufactured, supplied and sold in the non-tariff area, imported from foreign countries into the non-tariff area or manufactured inland or in the tariff area and then exported directly to the non-tariff area.
SCT-liable goods and services, which are exported from the non-tariff area to foreign countries shall not be liable for the tax.
SCT-liable goods and services which are imported from the non-tariff area into the tariff area or inland shall be liable to the tax just like import goods.
Regarding value added tax (VAT):
Goods and services which are manufactured and sold in the non-tariff area or imported into the non-tariff area from foreign countries shall not be liable to VAT.
Goods and services which are exported from inland or the tariff area to the non-tariff area shall not be liable for the tax.
Goods and services imported from the non-tariff area into the tariff area or inland shall be taxed as import goods at the currently prescribed rates
VNS - (08/03/2004)