Decree No. 04/2009/ND-CP on incentives and support for environmental protection activities

DECREE

On incentives and support for environmental protection activities

_________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

The Prime Minister issues this Decision amending and supplementing certain provisions of the Regulation on Response Activities to Oil Spill Incidents issued together with Decision No. 02/2013/QĐ-TTg dated January 14, 2013 of the Prime Minister.

CONSIDERING THE PROPOSAL OF THE MINISTER OF NATURAL RESOURCES AND ENVIRONMENT,

DECREE:

PART I

GENERAL PROVISIONS

Clause 4 of Article 6Scope of application

1. This Decree stipulates incentives and support regarding land, capital; tax and fee exemptions and reductions for environmental protection activities; price subsidies and consumption support for products from environmental protection activities, and other incentives and support for such activities and products.

2. Incentives and support not specified in this Decree shall be implemented in accordance with relevant laws and regulations.

3. This Decree does not apply to environmental protection activities that are obligations of investors as prescribed by law; environmental protection activities carried out using funds from the state budget.

Article 2. Applicability

1. State management agencies on natural resources and environment; state management agencies in fields related to incentives and support for environmental protection activities.

2. Organizations and individuals with new investment projects; projects expanding scale, increasing capacity, enhancing business capabilities, and innovating technology in implementing environmental protection activities; research, transfer, and application of technology for waste treatment, environmentally friendly technology, and heavily polluting facilities required to relocate (hereinafter referred to collectively as Environmental Protection Activity Investment Projects).

3. Where international treaties to which the Socialist Republic of Vietnam is a party provide different provisions than those of this Decree, the provisions of such treaties shall apply.

Article 3. Definitions

In this Decree, the following terms are understood as follows:

1. Waste treatment is the process of using technological and technical solutions to reduce, eliminate, or destroy harmful or non-beneficial components in waste; recover, recycle, and reuse beneficial components in waste.

2. Clean energy and renewable energy production is the production of energy from wind power, solar power, tidal power, and geothermal power.

3. Environmentally friendly products are products whose extraction of raw materials, production, existence, use, and disposal cause less harm to the environment than similar products and are certified with an eco-label by recognized organizations.

4. Environmentally beneficial substitute natural materials are products created by humans that can replace natural materials and cause less harm to the environment during their existence, use, or disposal than the materials they replace.

5. Environmentally friendly technology is technology applied in production, business, research, and consumption activities causing less harm to the environment than similar technologies, and the products produced from such technology are environmentally friendly products.

6. Severely polluting facilities required to relocate are facilities listed in the Catalogue of Severely Polluting Facilities Required to Relocate as decided by competent authorities.

7. Waste treatment facility is a physical infrastructure including land, workshops, production lines, equipment, and auxiliary structures used for waste treatment operations arranged at suitable locations.

8. Centralized household solid waste treatment facility is a combination of household solid waste treatment facilities or continuous household solid waste treatment works and auxiliary structures located at a single site according to planning.

9. Centralized domestic wastewater treatment system is a combination of one or more domestic wastewater treatment works with a design capacity of 2,500 cubic meters of domestic wastewater or more per day-night or serving 5,000 households or more in urban areas or centralized domestic wastewater treatment for a rural community.

10. Environmental infrastructure system for industrial zones and craft villages includes centralized wastewater collection and treatment areas, general solid waste storage areas, and hazardous waste storage areas.

11. Enterprises and cooperatives engaged in environmental protection are enterprises and cooperatives implementing environmental protection activities specified in Part A and Part B of the Catalogue of Activities and Products from Environmental Protection Activities Eligible for Incentives and Support issued together with this Decree.

Article 4. Principles of Incentives and Support

1. Organizations and individuals implementing multiple environmental protection activities eligible for incentives and support shall enjoy corresponding incentives and support for those activities as prescribed in this Decree.

2. Priority shall be given to attracting activities to mitigate pollution, recycle, reuse, and reduce waste causing pollution.

3. The level and scope of incentives and support for environmental protection activities shall be adjusted to ensure alignment with environmental protection policies at each period.

Article 5. Environmental Protection Activities and Products Eligible for Incentives and Support

1. Environmental protection activities eligible for incentives and support include:

a) Environmental protection activities and products from environmental protection activities specified in the Catalogue of Activities and Products from Environmental Protection Activities Eligible for Incentives and Support issued together with this Decree (hereinafter referred to collectively as the Catalogue);

b) Relocation of severely polluting facilities.

2. The Ministry of Natural Resources and Environment shall base on actual conditions to submit to the Prime Minister for decision to adjust the Catalogue after obtaining the consensus of the Ministry of Finance and the Ministry of Planning and Investment.

Article 6. Conditions, Scope, and Level of Incentives and Support

1. Conditions for enjoying incentives and support:

a) Only environmental protection activities and products specified in the Catalogue and relocation of severely polluting facilities are eligible for incentives and support under this Decree.

b) Environmental protection activities specified in the Catalogue and relocation of severely polluting facilities are only eligible for incentives and support under this Decree when implemented in the form of Environmental Protection Activity Investment Projects.

c) Machinery, equipment, means of transport, tools, and materials imported directly for the implementation of Environmental Protection Activity Investment Projects specified in the Catalogue are eligible for import tax incentives under this Decree.

2. Scope and level of incentives and support:

a) Environmental protection activities eligible for incentives and support include those particularly eligible for incentives and support and those eligible for incentives and support;

b) Environmental protection activities particularly eligible for incentives and support are specified in Part A of the List attached to this Decree;

c) Environmental protection activities eligible for incentives and support are specified in Part B of the List attached to this Decree;

d) Products from environmental protection activities eligible for incentives and support are specified in Part C of the List attached to this Decree.

Article 7. Prohibited Acts

1. Falsely declaring to benefit from incentives and support.

2. Using incentives and support for purposes other than intended.

3. Harassing, obstructing, or creating difficulties for organizations and individuals in benefiting from incentives and support.

4. Misusing authority to allow entities to benefit from incentives and support contrary to regulations.

Chapter II

INCENTIVES AND SUPPORT

Section 1

INCENTIVES AND SUPPORT FOR INFRASTRUCTURE AND LAND

Article 8.Support for investment in infrastructure construction

1. The project investor constructing an environmental protection facility as stipulated in Clause 1 and 2, Item I, Part A of the List shall enjoy support for investment in infrastructure projects as follows:

a) The State shall support the construction of infrastructure works and components (roads, electricity, water supply and drainage systems) outside the project area connecting with the common infrastructure system of the region;

b) In cases where the State has not been able to allocate funds for the construction of infrastructure works and components as stipulated in Point a, Clause 1 of this Article according to the project schedule, the investor may use other legitimate sources of funding to invest in order to put the project into operation on time. This amount will be deducted from land use fees or land lease fees and other amounts that the investor must pay to the budget as prescribed.

2. The Ministry of Finance shall take the lead and coordinate with the Ministry of Planning and Investment to guide the implementation of the provisions of Clause 1 of this Article.

Article 9. Support for land clearance and compensation

Investors constructing environmental protection facilities as stipulated in Item I, Part A and Item I, Part B of the List shall enjoy support for land clearance as follows:

1. Provincial People's Committees (hereinafter referred to collectively as Provincial People's Committees) shall, based on approved land use plans and plans, be responsible for allocating completed land clearance and compensation funds for environmental protection investment projects within their jurisdiction.

2. In cases where the land for constructing technical infrastructure and environmental protection services is currently being used, the competent state agency shall reclaim the land from the current user, compensate and clear the land according to the laws on land to transfer it to the investor.

Article 10.Land use fee and land lease fee incentives

1. The area of land used to construct environmental protection facilities particularly eligible for incentives and support as stipulated in Item I, Part A of the List shall be exempted from land use fees and land lease fees.

2. The area of land used to construct environmental protection facilities eligible for incentives and support as stipulated in Item I, Part B of the List shall have land use fees and land lease fees reduced by 50%, and be allowed to delay payment of these fees but the maximum period of delay shall not exceed five years from the date of land allocation.

Article 11.Financial incentives for land for enterprises causing serious environmental pollution that must relocate

1. Enterprises causing serious environmental pollution that must relocate, if allocated land without payment of land use fees by the State, or allocated land with payment of land use fees by the State, or legally transferred land use rights from another party with land use fees paid to the State or money paid for the transfer from the State budget, shall enjoy the following incentives:

a) Allocation of production and business premises in industrial parks or centralized production and business areas consistent with approved land use plans to continue production and business operations;

The new land area allocated shall be equal to the land area of the old production site to be relocated. If the need for development requires a larger land area than the old production site, the enterprise or cooperative must prepare an investment project for approval by the competent state agency;

b) The State shall reclaim the land at the old production site to prioritize public use or sell through auction for economic and social development purposes;

c) Enterprises causing serious environmental pollution that must relocate and are state-owned enterprises may use proceeds from the sale of land use rights (after deducting auction organization costs) to record in the State budget capital to pay land use fees, land lease fees, and upgrade technology at the new production site. If the land at the old production site is reclaimed for public use, the enterprise shall be provided with State capital to pay land use fees, land lease fees, and improve, upgrade, and modernize technology at the new production site corresponding to the market value of the land at the time of reclamation.

2. Enterprises causing serious environmental pollution that must relocate, if allocated land with payment of land use fees by the State, or legally transferred land use rights from another party with land use fees paid to the State or money paid for the transfer not from the State budget, shall be handled as follows:

a) The State shall prioritize allocation of production and business premises in industrial parks or centralized production and business areas consistent with approved land use plans to continue production and business operations but must pay land use fees according to the infrastructure investment rate.

In cases where localities are unable to allocate production and business land areas within industrial zones or other concentrated production and business areas, enterprises and cooperatives may choose new suitable locations in accordance with the detailed land use plan that has been approved by competent state authorities and shall be supported by the State in terms of compensation for land clearance (for land currently being used by others) or shall be granted a 50% reduction in land use fees (for state-owned land not yet allocated or leased in economically disadvantaged areas) or a 100% reduction in land use fees (for state-owned land not yet allocated or leased in particularly economically disadvantaged areas).

If there is a need for larger land areas due to the development of production activities compared to the area of the existing production facility, enterprises and cooperatives must prepare an investment project for the competent state authorities to consider allocating land; enterprises and cooperatives must pay compensation for land clearance or land use fees for the excess land area.

b) They are allowed to change the purpose of land use for the area of the old facility but must comply with the detailed land use plan, urban construction plan, and rural residential construction plan that have been approved by competent state authorities. If enterprises and cooperatives do not require the use of land, they may transfer the land use rights to others in accordance with the laws on land.

3. Enterprises and cooperatives causing serious environmental pollution that must be relocated and which have rented land from the State with rental payments made to the State not originating from the state budget shall be handled as follows:

a) For enterprises and cooperatives that have paid rent for the entire lease period in one lump sum or have prepaid rent for multiple years before the Land Law of 2003 took effect, they shall be prioritized for allocation of land in industrial zones or other concentrated production and business areas in accordance with the approved land use plan to continue their production and business activities; enterprises and cooperatives must pay rent for the entire area of the land at the new location.

b) They shall be refunded the rent already paid to the State.

4. Public interest facilities causing serious environmental pollution that must be relocated and which have been allocated land without payment of land use fees and must move to a new location shall be handled as follows:

a) They shall be prioritized for allocation of land in accordance with the approved detailed land use plan; infrastructure and public service facilities shall be constructed at the proposed relocation site according to the investment project approved by the competent state authorities.

b) The State shall reclaim the land at the original location for priority use for other public purposes or sell it through auction for economic and social development purposes.

c) They may use the proceeds from the sale of the land use rights (after deducting the costs of organizing the auction) to pay compensation for land clearance (for land currently being used by others); invest in infrastructure and public service facilities at the proposed relocation site. If the land at the original location is used for public purposes, the entity shall be provided capital by the State to pay compensation for land clearance (for land currently being used by others); invest in infrastructure and public service facilities at the proposed relocation site.

Section 2

INCENTIVES AND SUPPORT IN TERMS OF CAPITAL, TAXES, AND FEES

Article 12. Incentives for raising investment capital

1. Centralized solid waste treatment facilities specified in Clause 1, Item I, Part A of the List of Applied Technologies with post-treatment landfill rates below 10%, and centralized domestic wastewater treatment systems specified in Clause 2, Item I, Part A of the List shall be supported by the State with 50% of the construction investment capital, including 40% from the central budget and 10% from the local budget; the remaining 50% can be obtained through preferential loans from the Vietnam Development Bank or the Vietnam Environment Protection Fund.

2. Construction projects specified in Clauses 3, 4, 5, and 6, Item I, Part A, and Item I, Part B of the List shall be prioritized for support in post-investment interest rates from the Vietnam Development Bank in accordance with current regulations or be given priority for loans and considered for post-investment interest rate support or investment credit guarantees under the Vietnam Environment Protection Fund's charter; they shall ensure access to preferential credit loans secured by assets formed from borrowed funds.

3. Investment capital for equipment implementing environmental protection inventions specified in Clause 9, Item II, Part A of the List shall be supported by the State with 30%; the remaining 70% can be obtained through loans from the Vietnam Development Bank or the Vietnam Environment Protection Fund.

4. Enterprises and cooperatives engaged in activities specified in Clauses 6, 7, and 8, Item II, Part A, and Clause 5, Item II, Part B of the List shall benefit from preferential investment credit policies of the Vietnam Development Bank, the National Science and Technology Development Fund, the Vietnam Environment Protection Fund, and other funds as stipulated by law to implement investment production and business projects.

5. Investment programs and projects implementing environmental protection activities specified in the List, if they are key national projects, shall be prioritized for consideration for official development assistance funding.

6. The Ministry of Finance, in collaboration with the Ministry of Planning and Investment, shall guide the provision of investment capital as stipulated in Clause 1 and Clause 3 of this Article; in collaboration with the State Bank of Vietnam, they shall guide the provision of loans and implementation of post-investment interest rate support and investment credit guarantees for projects borrowing from the Vietnam Development Bank.

Article 13. Incentives for corporate income tax

Enterprises and cooperatives engaged in environmental protection activities specified in Item II, Part A, and Item II, Part B of the List shall enjoy corporate income tax incentives in accordance with the Corporate Income Tax Law.

Article 14. Incentives for export taxes and import taxes

1. Machinery, equipment, means, tools, materials imported as prescribed in Clause 10, Section II, Part A of the List shall be exempted from import tax.

The exemption from import tax for machinery, equipment, means, tools, and materials as prescribed in Clause 1 of this Article shall apply to cases of expanding project scale, replacement, and technological renewal.

2. Machinery, equipment, spare parts, raw materials, transport vehicles, technology, documents, books, scientific journals, and electronic sources of information on science and technology as prescribed in Clause 11, Section II, Part A of the List shall enjoy preferential treatment under the laws on export tax and import tax.

3. Products specified in Part C of the List, if exported, shall be exempted from export tax.

Article 15. Preferential Value Added Tax

Enterprises and cooperatives shall enjoy preferential treatment regarding value added tax as prescribed by the laws on value added tax.

Article 16. Fee Preferential Treatment

Enterprises and cooperatives implementing environmental protection projects as prescribed in Clauses 1 through 5, Section II, Part A of the List and those as prescribed in Section II, Part B of the List shall be exempted from environmental protection fees according to the special preferential and support provisions.

Article 17. Depreciation of Fixed Assets

1. Fixed assets of enterprises and cooperatives engaged in environmental protection activities as prescribed in Clauses 1 through 9, Section II, Part A of the List shall be depreciated at twice the current rate.

2. Fixed assets of enterprises and cooperatives engaged in environmental protection activities as prescribed in Section II, Part B of the List shall be depreciated at one and a half times the current rate.

Section 3

SUBSIDIES AND CONSUMPTION SUPPORT FOR PRODUCTS

Article 18.Input Cost Support

1. Environmental protection projects as prescribed in Clause 1, Section II, Part A of the List shall be supported by the State with:

a) Fifty percent of the cost of transporting waste from emission sources to waste treatment facilities;

b) Fifty percent of the electricity price directly serving production.

2. The Ministry of Finance shall provide guidance on procedures and mechanisms for implementing input cost support as prescribed in Clause 1 of this Article.

Article 19.Product Consumption Support and Price Support

1. The State encourages state agencies to use products as prescribed in Clauses 1 and 2, Part C of the List if they meet standards and fall within the procurement scope of state agencies.

2. Products from environmental protection activities as prescribed in Clauses 2, 3, and 4, Part C of the List shall be supported by the State in terms of price according to the following principles:

a) Ensuring sufficient revenue to cover costs plus reasonable interest rates;

b) The period of product subsidy shall be determined based on the time when the project produces products and the ability to offset the costs of subsidized products.

3. The funding for price support shall be sourced from the Vietnam Environment Protection Fund.

4. The Ministry of Finance, in collaboration with the Ministry of Natural Resources and Environment, shall provide detailed guidance on conditions, levels, and periods of subsidies for products from environmental protection activities as prescribed in Clause 2 of this Article.

Section 4

OTHER INCENTIVES AND SUPPORTS

Article 20. Environmental Awards

1. Every two years, the Ministry of Natural Resources and Environment, in collaboration with the Ministry of Science and Technology, the Vietnam Chamber of Commerce and Industry, and Vietnam Television, shall organize the selection, awarding, and honoring of organizations and individuals who have made outstanding achievements in environmental protection activities.

2. The Ministry of Natural Resources and Environment shall specify the structure of awards, criteria, and procedures for awarding prizes; in collaboration with the Ministry of Finance, it shall specify the detailed amount allocated for environmental protection awards.

3. Funding for organizing and awarding prizes shall be sourced from environmental public expenditure funds, the Vietnam Environment Protection Fund, and sponsorships from other organizations and individuals.

Article 21. Product Promotion and Source Waste Sorting Support

1. The State encourages organizations, individuals, enterprises, and cooperatives to implement the following activities:

a) Promoting products from environmental protection activities;

b) Producing scientific films on environmental protection to raise public awareness about protecting the environment and using environmentally friendly products;

c) Providing free tools for residents to sort household waste at source.

2. Costs incurred for implementing activities as prescribed in Clause 1 of this Article shall be recorded as production expenses for organizations, individuals, enterprises, and cooperatives.

3. The Ministry of Finance, in collaboration with the Ministry of Natural Resources and Environment, shall guide the implementation of incentive policies as prescribed in Clauses 1 and 2 of this Article.

Chapter III

PROCEDURES FOR IMPLEMENTING PREFERENCES, SUPPORTS, WITHDRAWAL OF PREFERENCES, AND SUPPORTS

Article 22. Procedures for Implementing Preferences and Supports

1. For investment projects that do not require registration and those requiring registration as prescribed in Article 45 of the Investment Law, investors shall base their determination of the form and level of preferences and supports for environmental protection activities as prescribed in this Decree and related laws to handle investment preference procedures with competent state authorities.

2. In cases where investors request confirmation of preferences and supports, they shall register preferences and supports so that the investment management agency records them on the Investment Certificate.

3. For investment projects subject to feasibility study as prescribed in Article 47 of the Investment Law and meeting the conditions for enjoying preferences and supports as prescribed in this Decree, the investment management agency shall record preferences and supports on the Investment Certificate.

4. For foreign-invested projects meeting the conditions for enjoying preferences and supports as prescribed in this Decree, the investment management agency shall record investment preferences on the Investment Certificate.

Article 23. Withdrawal of Preferences and Supports

1. Preferences and supports shall be withdrawn in the following cases:

a) If enterprises or cooperatives make false declarations to obtain any preference or support, such preference or support shall be withdrawn; if they make false declarations to obtain all preferences and supports, all such preferences and supports shall be withdrawn;

b) If enterprises or cooperatives misuse any form of preference or support, such preference or support shall be withdrawn; if they misuse all preferences and supports, all such preferences and supports shall be withdrawn;

c) If enterprises or cooperatives misuse land obtained through preferences and supports, all such preferences and supports shall be withdrawn.

2. In addition to having the incentives and support provided for in Clause 1 of this Article revoked, enterprises and cooperatives must pay to the State budget the following amounts:

a) The interest on the amount of supported capital that is being recovered, calculated at the lending interest rate of the Vietnam Development Bank at the time of recovery;

b) Land rental fees based on the area of land being recovered, the period of use, and the rental price at the time of recovery.

3. The People's Committee of the province where the enterprise or cooperative conducts environmental protection activities with incentives and support shall be responsible for inspecting, auditing, and deciding to revoke the incentives and support of enterprises and cooperatives violating the provisions of Clause 1 of this Article.

Chapter IV

IMPLEMENTING PROVISIONS

Article 24. Responsibilities of Ministries and Sectors

1. The Ministry of Natural Resources and Environment shall take the lead and coordinate with relevant ministries, sectors, and provincial People's Committees to guide the implementation and monitor the implementation of this Decree; promptly propose amendments and supplements to policies of incentives and support for environmental protection activities for consideration and decision by the Government.

2. The Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Construction, the Ministry of Industry and Trade, the State Bank of Vietnam, and other relevant ministries and sectors within their respective functions and tasks shall be responsible for directing and guiding the implementation of policies of incentives and support for environmental protection activities as stipulated in this Decree.

Article 25. Responsibilities of Provincial People's Committees

1. Direct competent agencies under its jurisdiction and People's Committees at all levels to establish land use plans, investment capital allocation plans for infrastructure projects related to environmental protection facilities receiving incentives and support in localities.

2. Implement according to its authority the policies of incentives and support for environmental protection activities as stipulated in this Decree; direct the implementation of compensation and land clearance for the construction of environmental protection facilities receiving incentives and support.

3. Inspect and audit the implementation of investment projects in environmental protection activities by organizations and individuals benefiting from incentives and support as stipulated in this Decree, ensuring that incentives and support are implemented for the intended purpose, for the correct beneficiaries, and at the appropriate level of incentive.

Article 26.Responsibilities of Organizations and Individuals Receiving Incentives and Support

1. Implement the investment project in environmental protection activities as stipulated in this Decree.

2. Annually, before December 31, report the results of operations to the People's Committee of the province where the investment project in environmental protection activities is carried out, the Ministry of Natural Resources and Environment, the Ministry of Planning and Investment, and the Ministry of Finance for coordinated management, inspection, and audit as prescribed; bear responsibility for the accuracy and truthfulness of the data and information reported.

3. In addition to implementing the reporting system prescribed in Clause 2 of this Article, must submit ad hoc reports on the implementation of the investment project in environmental protection activities when requested by competent state management authorities.

4. The format of the report prescribed in Clause 2 of this Article shall be implemented in accordance with the guidance of the Ministry of Natural Resources and Environment.

Article 27. Effectiveness

1. This Decree shall take effect 45 days from the date of issuance.

2. Environmental protection activities specified in Part A, Part B, and products specified in Part C of the List that have been implemented prior to the effective date of this Decree shall continue to enjoy incentives and support as prescribed in this Decree for the remaining period of operation.

The State will not refund tax payments and other obligations that enterprises and cooperatives were required to fulfill before the effective date of this Decree.

3. In cases where new laws or policies are promulgated providing higher incentives and support than those already enjoyed by investors under this Decree, investors shall enjoy the incentives and support as prescribed in the new laws or policies from the date they become effective. If the incentives and support are lower, they shall continue to enjoy them as prescribed in this Decree.

4. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of provincial and centrally-administered city People's Committees, and related organizations and individuals shall be responsible for enforcing this Decree./.