Foreign Direct Investment (FDI) projects in Vietnam’s high-tech sector are actively encouraged by the government to promote economic and technological development. These projects include industries such as high-tech product manufacturing, information technology, and supporting industries for high technology.
This initiative is part of Vietnam’s broader strategy to attract foreign investment, facilitate technology transfer, improve labor productivity, and enhance the quality of products and services. To create a favorable business environment, the government has introduced various tax incentives, including preferential Value Added Tax (VAT), Corporate Income Tax (CIT), and refund mechanisms. DNP Viet Nam Law Firm will now focus on VAT and refund regulations for FDI investment projects in the high-tech sector.
1. Overview of FDI Investment Projects in the High-Tech Sector:
- FDI (Foreign Direct Investment): A form of direct investment from abroad, including purchasing shares, establishing subsidiaries, forming joint ventures, or opening branches in another country.
- High-tech sector: Includes industries prioritized for development, such as high-tech product manufacturing, information technology, and supporting industries for high technology.
2. Value Added Tax (VAT) Regulations:
2.1 VAT Rates:
- The standard VAT rate is 10% for most goods and services.
- According to Decree 180/2024/ND-CP, the VAT rate will be reduced from 10% to 8% for specific goods and services in the first six months of 2025.
- Certain exported goods and specialized services may qualify for a 0% VAT rate, enabling FDI enterprises to optimize costs and increase profitability
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2.2 VAT Declaration and Payment:
FDI enterprises in the high-tech sector can declare and pay VAT monthly or quarterly, depending on their business scale:
- Monthly declaration is required for large-scale enterprises.
- Quarterly declaration is permitted for smaller businesses to ease accounting workload.
Timely tax payments help businesses avoid penalties, comply with legal requirements, and facilitate other tax-related processes such as refunds and additional incentives.
3. VAT Refund Regulations:
3.1 VAT Refund Eligibility:
According to Clause 4, Article 18 of Circular 219/2013/TT-BTC, as amended by Article 2 of Circular 25/2018/TT-BTC, businesses that export goods or services and have uncredited input VAT of at least VND 300 million can apply for a refund either monthly or quarterly.
3.2 VAT Refund Process:
- A complete VAT refund dossier must include valid invoices, financial statements, tax declarations, and relevant export documents.
- The tax authority will review applications before issuing refunds. If a dossier requires prior verification, the tax refund process should not exceed 40 days from the date of acceptance.
- Businesses must ensure transparency and accuracy in their documents to avoid refund rejection or subsequent tax audits.
4. Tax Incentives for High-Tech Investment Projects:
4.1. Corporate Income Tax (CIT) Incentives:
High-tech projects are eligible for a tax rate of 10% throughout their operational period or 17%, depending on specific conditions.
4.2. CIT Exemption and Reduction:
According to Point a, Clause 1, Article 20 of Circular 78/2014/TT-BTC, as amended by Clause 1, Article 12 of Circular 96/2015/TT-BTC, high-tech enterprises may be exempt from CIT for up to 4 years and receive a 50% reduction in payable tax for up to the following 9 years.
The above information is for reference only. For further details, please contact us using the information below
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