Legal News

[Taxation] Information from the National Tax Agency regarding corporate tax incentives for new investment projects

2024/10/18

The General Department of Taxation issued Official Letter No. 4395/TCT-CS on October 1, 2024, providing guidance on the principles for certifying new investment projects as follows.

The principles for certifying new investment projects eligible for corporate tax incentives apply when the following conditions specified in Article 1, Item 18 of Decree No. 12/2015/ND-CP dated February 12, 2015, are met:
・The investment project must be a new project or an independent project separate from currently operational projects (excluding projects formed through division, merger, integration, or changes in business structure, or projects formed through changes in ownership)
・The project must fall under the eligible investment sectors and regions
・The project must have been granted an Investment Registration Certificate (IRC) by the competent authority or approved for investment under the Investment Law
・The investment project is being implemented appropriately in accordance with the Investment Law.

The principles for recognizing the above preferential measures have remained unchanged and have always been necessary conditions. However, while there have been cases in the past where preferential tax treatment was recognized even if not all conditions were met, the official letter has now explicitly stated these conditions, making them more stringent. For example, while obtaining a new IRC is not typically required when conducting an M&A, it can be interpreted that obtaining an IRC is necessary to meet the above conditions in order to be recognized as a new investment project. However, since individual cases may receive different guidance, it is recommended to confirm the details with the relevant tax authority.

To appropriately receive corporate tax preferential treatment for new investment projects, companies must confirm the relevant conditions.

References:
Decree No. 12/2015/ND-CP dated February 12, 2015
Official Letter No. 4395/TCT-CS issued by the General Department of Taxation on October 1, 2024