| THE PRIME MINISTER ------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------- |
| No. 33/2009/QD-TTg | Hanoi, March 2, 2009 |
DECISION
PROMULGATING FINANCIAL MECHANISMS AND POLICIES APPLICABLE TO BORDER-GATE ECONOMIC ZONES
THE PRIME MINISTER
Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the Government’s Decree No. 10S/2006/ND-CP of September 22, 2006, detailing and guiding a number of articles of the Investment Law;
Pursuant to the Government’s Decree No. 29/2008/ND-CP of March 14, 2008. on industrial parks, export-processing zones and economic zones;
At the proposal of the Minister of Finance.
DECIDES:
Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation
This Decision prescribes financial mechanisms and policies applicable to border-gate economic zones and non-tariff sections of border-gate economic zones which arc established under the Prime Minister’s decisions.
Article 2. Subjects of application
1. Border-gate economic zone management boards under provincial-level People’s Committees, which are established under the Prime Minister’s decisions and have functions, tasks, powers and organizational structures and operate under the Government’s Decree No. 29/ 2008/ND-CP of March 14, 2008, on industrial parks, export-processing zones and economic zones (below referred to as Decree No. 29/2008/ ND-CP).
2. Enterprises of all economic sectors which invest in and operate technical and social infrastructure of border-gate economic zones.
Investors of projects under the Investment Law, enterprises established under the Enterprise Law and cooperatives established under the Law on Cooperatives in border-gate economic zones.
Article 3. Conditions for application
Financial mechanisms and policies under this Decision are applicable to border-gate economic zones and non-tariff sections of border-gate economic zones which fully meet the following conditions:
1. For border-gate economic zones:
a/ Being established under the Prime Minister’s decisions;
b/ Having a border-gate economic zone management board under Decree No. 29/2008/ ND-CP.
2. For non-tariff sections of border-gate economic zones:
a/ Having a customs office controlling and examining incoming and outgoing goods and vehicles in non-tariff sections.
b/ Being separated from the outside territory with fence systems, having entrance gates and doors to assure control by customs offices and concerned functional agencies.
Article 4. Interpretation of terms
Border-gate economic zone means an economic zone established under the conditions, order and procedures specified in Decree No. 29/2008/ND-CP in a mainland border area which has an international or major border gate.
Non-tariff sections of border-gate economic zones comprise export-processing zones, export -processing enterprises, tax suspension warehouses, tax suspension zones, bonded warehouses, special economic-trade zones, trade-industrial zones and other economic sectors which are established under the Prime Minister’s decisions, have goods export-import relations with the outside and meet the conditions specified in Clause 2, Article 3 of this Decision.
Chapter II
SPECIFIC PROVISIONS
Section 1. CREDIT AND INVESTMENT POLICIES
Article 5. State budget funds for infrastructure investment
1. Local budget funds for development investment shall be allocated to investment projects to build technical and social infrastructure of border-gale economic zones.
2. Central budget supports shall be given to important technical and social infrastructure investment projects. Conditions and principles for and types of works entitled to central budget supports comply with the Prime Minister’s decision.
3. Central budget funds for construction of border-gate economic zone infrastructure shall be managed, used and settled according to the law on capital construction investment management, the State Budget Law and other relevant laws.
Article 6. Raised funds
1. Large-scale and key investment projects on technical and social infrastructure construction may issue work bonds under the Government’s Decree No. 141/2003/ND-CP of November 20, 2003, on issuance of government bonds, government-guaranteed bonds and bonds of local governments.
2. All funds raised from bond issuance shall be invested in approved projects under law.
3. Foreign organizations and individuals and overseas Vietnamese may make direct investment in border-gate economic zones, even in the form of build-operate-transfer (BOT), build-transfer (BT) or build-transfer-operate (BOT).
4. Investment projects to build technical and social infrastructure or necessary public utility service works in border-gate economic zones may be included in the list of projects calling for official development assistance (ODA). ODA funds shall be managed and used according to current laws.
5. Investment projects in border-gate economic zones may borrow loans from credit institutions and raise funds from domestic and foreign organizations and individuals under law.
6. LaoCai international border-gate economic- zone (Lao Cai province), Cau Treo international border-gate economic zone (Ha Tinh province). Lao Bao special economic-trade zone (Quang Tri province), An Giang border-gate economic zone (An Giang province). Moc Bai border-gate economic zone (Tay Ninh province). Bo Y international border-gate economic zone (Kon Tum province). Dong Dang-Lang Son border-gate economic zone (Lang Son province). Mong Cai border-gate economic zone (Quang Ninh province) and Dong Thap border-gate economic zone (Dong Thap province) may raise, apart from the funds specified in Clauses 1, 2, 3, 4 and 5 of this Article, direct investment capital from domestic and overseas organizations and individuals, advanced capital of infrastructure users, and capital of enterprises permitted to build and operate technical infrastructure works in border-gate economic zones; borrow loans jointly provided by credit institutions and raise all investment capital sources in other forms under law.
Article 7. Capital from the land fund of border-gate economic zones
Provincial-level People’s Committees shall use land use levies and land rents collected from border-gate economic zones to build technical and social infrastructure and common necessary service and utility works of border-gate economic zones or create funds to clear ground for investment in border-gate economic zone development under law.
Article 8. State credit funds
Investment projects in border-gate economic zones are entitled to investment credit and export credit policies under the Government’s Decree No. 151/2006/ND-CP of December 20, 2006, on the States investment credit and export credit, and Decree No. 106/2008/ND-CP of September 19, 2008, amending and supplementing a number of articles of Decree No. 151/2006/ND-CP of December 20, 2006.
Section II. POLICIES ON TAXES, CHARGES, FEES AND LAND RENTS AND OTHER FINANCIAL POLICIES
Article 9. Enterprise income tax incentives
Enterprises established under investment projects in border-gate economic zones are entitled to enterprise income tax incentives under the Government’s Decree No. 124/2008/ND-CP of December 11, 2008, detailing and guiding a number of articles of the Law on Enterprise Income Tax, specifically as follows:
1. To enjoy the 10% preferential tax rate for 15 years. Those established under investment projects in the domains specified at Point b, Clause 1, Article 15 of the Government’s Decree No. 124/2008/ND-CP of December 11, 2008, may enjoy the 10% tax rate for an extended period not exceeding 30 years. The Prime Minister shall decide to extend the period of enjoying the 10% preferential tax rate under this Clause ai the proposal of the Minister of Finance.
2. To be exempt from enterprise income tax for 4 years and enjoy a 50% reduction of payable enterprise income tax amounts for 9 subsequent years. The tax exemption and reduction period is counted successively from the first year an enterprise has taxable income from the investment project: when an enterprise does not have taxable income for 3 (three) years counting from the first year it has turnover from the investment project, the tax exemption and reduction period is counted from the fourth year.
Article 10. Personal income tax incentives
Vietnamese and foreign personal income taxpayers under the Law on Personal Income Tax working in border-gate economic zones and earning income from their work are entitled to a 50% reduction of payable tax amounts.
Procedures for declaring, paying and settling persojial income tax comply with law.
Article 11. Value-added tax incentives
1. Goods and services produced and consumed in. goods and services imported from overseas to. and goods and services exported to overseas from, non-tariff sections of border gate economic zones are not subject to value-added tax.
2. Goods and services from other functional sections of border-gate economic zones and goods and services from inland Vietnam imported to non-tariff sections of border-gate economic zones are entitled to the 0% value-added tax rate. The Ministry of Finance shall promulgate a list of goods subject to examination prior to value-added tax refund applicable to goods and services specified in this Clause at the proposal of People’s Committees of provinces having border-gate economic zones.
3. Goods and services exported from non-tariff sections to other functional sections of border-gate economic zones or inland Vietnam arc subject to value-added lax under law.
Article 12. Excise lax incentives
Excise tax-liable goods produced and consumed in, or imported from overseas or inland Vietnam to. non-tariff sections of border-gate economic zones are not subject to excise tax except under-24-seat automobiles, which are subject to excise tax according to regulations.
2. Excise tax-liable goods exported overseas from non-tariff sections of border-gale economic zones are not subject to excise tax.
3. Excise tax-liable goods exported from non-tariff sections of border-gate economic zones to other functional sections of border-gale economic-zones or inland Vietnam are subject to excise tax according lo regulations.
