Decree No. 04/2018/ND-CP dated January 04, 2018 of the Government on incentive mechanisms and policies for the Da Nang Hi-Tech Park

DECREE

On incentive mechanisms and policies for
the Da Nang Hi-Tech Park[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the June 19, 2015 Law on Organization of Local Administration;

Pursuant to the June 25, 2015 Law on the State Budget;

Pursuant to the November 13, 2008 Law on High Technologies;

Pursuant to the June 18, 2013 Law on Science and Technology;

Pursuant to the November 29, 2013 Land Law;

Pursuant to the June 18, 2014 Law on Public Investment;

Pursuant to the November 26, 2014 Law on Investment;

Pursuant to the April 6, 2016 Law on Import Duty and Export Duty;

Pursuant to the November 25, 2014 Housing Law;

Pursuant to the November 25, 2014 Law on Non-Agricultural Land Use Tax;

Pursuant to the June 3, 2008 Law on Enterprise Income Tax; and the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax;

Pursuant to the November 26, 2014 Law Amending and Supplementing a Number of Articles of the Laws on Taxes;

At the proposal of the Minister of Science and Technology;

The Government promulgates the Decree on incentive mechanisms and policies for the Da Nang Hi-Tech Park.

Chapter I

SCOPE AND SUBJECTS OF REGULATION

Article 1.Scope of regulation

This Decree prescribes a number of incentive mechanisms and policies for the Da Nang Hi-Tech Park (the Hi-Tech Park).

Investors shall enjoy incentive mechanisms and policies prescribed by this Decree or other regulations in conformity with Vietnam’s law.

Article 2.Subjects of application

1. Vietnamese organizations and individuals, overseas Vietnamese, and foreign organizations and individuals operating in the Hi-Tech Park.

2. The Da Nang Hi-Tech Park Management Board (the Management Board).

3. State management agencies and related specialized agencies.

Chapter II

MECHANISMS FOR RAISING INVESTMENT CAPITAL
FOR HI-TECH PARK DEVELOPMENT

Article 3.Funding sources to be mobilized for investment in developing the Hi-Tech Park

1. The central budget shall prioritize the full allocation of the targeted transfer (central budget fund committed for each period) for the city’s budget to implement projects and works in the Hi-Tech Park and national programs on development of the Hi-Tech Park.

2. Annually, in case the collected central budget revenue exceeds the estimate, the Government shall report to the National Assembly Standing Committee on prioritizing capital support for the Hi-Tech Park so as to complete its infrastructure and physical-technical foundations by 2020.

3. The Government shall prioritize the mobilization of official development assistance (ODA) funds for Da Nang city to invest in building technical and social infrastructure and projects on building necessary public utilities, a training center, a technology research, application and development center and a hi-tech enterprise incubator. The city budget shall ensure the allocation of domestic counterpart capital for such projects and works.

4. Annually, the Da Nang City People’s Committee shall allocate sufficient local budget fund to complete projects and works in the Hi-Tech Park under the approved plan; the Management Board may raise domestic capital in accordance with law for building and developing the Hi-Tech Park.

Article 4.Projects and works in the Hi-Tech Park eligible to raise investment capital

1. Investment in building technical infrastructure of the Hi-Tech Park, including: ground leveling, pipe system, water drainage system, wastewater discharge system, waste disposal system, technical tunnel and trench system, road and water supply system, information technology system, power supply system, lighting system, pavements, fence, entrance gate, greenery and public landscape.

2. Payment of money for compensation, ground clearance and resettlement for projects and works in the Hi-Tech Park under the approved plans.

3. Investment in building works in the Hi-Tech Park:

a/ The research-development, training and enterprise incubator zone: a training center, a hi-tech enterprise incubator and the technology research, application and development center under the Management Board;

b/ The management-administrative zone;

c/ The focal technical infrastructure zone.

Chapter III

INVESTMENT INCENTIVE POLICIES

Article 5.Land rental and non-agricultural land use levy incentives

1. Land rental exemption for investment projects’ entire lease period in the following cases:

a/ Land used for building transport and technical infrastructure facilities, land with greeneries, water surface and public parks under the approved master plan and zoning plan;

b/ Land used for building non-business facilities of public non-business units;

c/ Land used for building hi-tech human resource training institutions in accordance with the law on high technologies;

d/ Land used for building housing projects for lease to experts and workers of the Hi-Tech Park under the master plan approved by a competent state agency;

dd/ Projects on the list of fields eligible for special investment incentives (excluding investment projects on construction and commercial operation of the Hi-Tech Park infrastructure facilities).

2. Land rental exemption and reduction incentive levels for projects that do not fall into the cases specified in Clause 1 of this Article are specified as follows:

a/ Land rental will be exempted during the capital construction period not exceeding 3 years after obtaining the land lease decision (excluding cases of upgrading and expansion of production and business establishments);

b/ Land rental will be further exempted after the land rental exemption for the capital construction period for 15 years for investment projects outside the list of fields eligible for investment incentives; and investment projects on construction and commercial operation of the Hi-Tech Park infrastructure facilities;

c/ Land rental will be further exempted after the land rental exemption for the capital construction period for 19 years for projects on the list of sectors eligible for investment incentives;

d/ Land rental will be exempted during the time of suspension from production and business because of natural disaster, fire orforce majeureevent.

3. The list of sectors eligible for investment incentives and the list of sectors eligible for special investment incentives must comply with the law on investment.

4. Lessees of land in the Hi-Tech Park to implement socialization projects related to education, vocational training, health, culture, sports and environment are entitled to land rental exemption and reduction under the Government’s regulations on policies to encourage all sectors to involve in education, vocational training, health, culture, sports and the environment.

5. Land users shall be exempted from non-agricultural land use tax during the entire land use period.

Article 6.Refund of compensation and ground clearance money

1. A land user will not have to refund compensation and ground clearance money when:

a/ He/she was allocated land without land use levy, leased land with land rental exemption for the entire lease period and handed over land by the Management Board before July 1, 2014;

b/ He/she uses land and land with water surface for building transport facilities, technical infrastructure, greeneries or public parks under the general construction and functional zone master plans (including cases in which land has been used before the effective date of this Decree);

c/ The Management Board and its affiliated units use land for building offices and non-business facilities and works serving the management and commercial operation of infrastructure (including cases in which land has been used before the effective date of this Decree);

d/ He/she leases land with annual rental payment and is eligible for land rental exemption or reduction but refuses to enjoy the incentive;

dd/ For projects each capitalized at VND 3 trillion or more, land users will not have to refund compensation and ground clearance money.

2. In cases not specified in Clause 1 of this Article, land users shall refund compensation and ground clearance money under regulations.

Article 7.Enterprise income tax incentives

1. Tax rate incentives

a/ Enterprises implementing new investment projects in the Hi-Tech Park are entitled to the enterprise income tax rate of 10% for 15 years;

b/ New investment projects in the Hi-Tech Park each capitalized at VND 3 trillion or more are entitled to the preferential tax rate of 10% for 30 years;

c/ Enterprises implementing social housing projects for sale, lease or lease-purchase to persons working in enterprises in the Hi-Tech Park are entitled to the preferential enterprise income tax rate of 10% as applicable to persons working in enterprises inside and outside industrial parks under Clause 5, Article 49 of the Housing Law.

2. Tax exemption and reduction incentives

a/ Enterprises implementing new investment projects in the Hi-Tech Park are entitled to enterprise income tax exemption for 4 years and a 50% reduction of payable tax amounts for 9 subsequent years;

b/ Other tax exemption and reduction cases must comply with the Law on Enterprise Income Tax and relevant documents.

Article 8.Import duty incentives

1. Goods imported to create fixed assets of projects in the Hi-Tech Park are entitled to duty exemption, including:

a/ Machinery and equipment; components, details, parts and spare parts for assembly into complete units or use with other machinery and equipment; raw materials and supplies used to manufacture machinery and equipment or components, details, parts and spare parts of machinery and equipment;

b/ Special-use vehicles included in technology lines directly serving projects’ production activities;

c/ Domestically unavailable building supplies.

Import duty exemption for imported goods specified in this Clause shall be applied to both new and expanded investment projects.

2. Raw materials, supplies and components which are domestically unavailable and imported by investment projects in the Hi-Tech Park for production shall be exempted from import duty for 5 years from the date of production commencement.

3. Special-use machinery, equipment, spare parts and supplies which are domestically unavailable and special-use scientific documents, books and newspapers which are imported to directly serve scientific research, technological development, technology incubation, science and technology enterprise incubation, and technology renewal in the Hi-Tech Park shall be exempted from import duty.

Article 9.Investment credit incentives

Enterprises, economic organizations and non-business units with revenues investing in projects on the list of those eligible for investment credit loans shall enjoy investment credit incentives in accordance with current laws.

Chapter IV

OTHER INCENTIVES

Article 10.Infrastructure charges

1. Infrastructure charge means an amount collected to pay for expenses on building, repair and maintenance of the service conditions or rebuilding of socio-technical infrastructure facilities.

2. Investors that have production and business projects in the Hi-Tech Park and use technical and social infrastructure facilities therein shall pay an infrastructure charge.

3. For facilities built by enterprises investing in the building and commercial operation of socio-technical infrastructure facilities in the Hi-Tech Park:

a/ The enterprises shall manage and operate these infrastructure facilities and collect charges for the use thereof from investors in the Hi-Tech Park; and shall regularly repair and maintain the service conditions of such infrastructure facilities in accordance with law;

b/ The rates of charges for socio-technical infrastructure facilities built in the Hi-Tech Park shall be decided by the enterprises and calculated in a percentage of one of the following bases: total export value; total production and service turnover; and total amount earned from the sublease of land with infrastructure facilities.

4. For facilities not built by enterprises investing in the building and commercial operation of socio-technical infrastructure facilities in the Hi-Tech Park:

a/ The Management Board shall manage, operate, repair, maintain and collect charges from investors in the Hi-Tech Park so as to invest in repairing and maintaining the service conditions of such facilities and perform its management in accordance with law;

b/ The rates of charges for general socio-technical infrastructure facilities in the Hi-Tech Park that are not built by enterprises investing in the building and commercial operation of socio-technical infrastructure facilities shall be set by the Da Nang City People’s Committee in accordance with the Law on Price and other relevant laws. The Da Nang City People’s Committee shall decide on the charging method suitable to the local socio-economic situation and conformable with the State’s policies and guidelines.

5. Enterprises investing in the building and commercial operation of socio-technical infrastructure facilities and the Management Board shall manage and use the total collected amount of money to pay for expenses and perform tax obligations in accordance with law. These enterprises and the Management Board shall make and issue receipts to payers upon the collection of charges for socio-infrastructure facilities; and account separately and manage and use the total collected amount of money in accordance with law. The infrastructure charge receipts issued by the enterprises and the Management Board to payers are valid documents and the paid charges may be accounted as production and business costs and entitled to value-added tax credit upon determination of tax obligations under law.

Article 11.Immigration

Overseas Vietnamese investors, experts and workers, foreigners working in the Hi-Tech Park and their family members (including parents, spouses and under-18 blood and adopted children) may be granted multiple-entry visas with a validity duration suitable to their entry purpose as prescribed by law.

Chapter V

IMPLEMENTATION PROVISIONS

Article 12.Effect and implementation responsibility

1. This Decree takes effect on February 20, 2018.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, the Chairperson of the Da Nang City People’s Committee, and heads of the Da Nang Hi-Tech Park Management Board and related agencies shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC