Decree No. 04/2018/NĐ-CP on mechanisms and preferential policies for Da Nang High-Tech Zone

DECREE

Regarding the mechanism and preferential policies for Khuong high-tech industry Danang

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

On the basis of the Ordinance on Implementation of Democracy in Communes, Wards, and Towns dated April 20, 2007;

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

Pursuant to the High Technology Law dated November 13, 2008;

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

Pursuant to the Land Law on December 29, 2013;1in the year 2013;

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

Pursuant to the Investment Law dated November 26, 2014;

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

Pursuant to the Law on Housing dated November 25, 2014;

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

Pursuant to the Law on Corporate Income Tax on June 3, 2008; and the Law Amending and Supplementing Certain Provisions of the Law on Corporate Income Tax on June 19, 2013;

Pursuant to the Law amending and supplementing certain Articles of Laws on Taxation dated November 26, 2014;

Pursuant to the proposal of the Minister of Science and Technology;

The Government promulgates this Decree stipulating the mechanism and preferential policies for Khuong High-Tech Industry Danang (Khuong High-Tech Industry)."b) In addition to the lists of public services issued according to the provisions of Clause 2, Article 4 of this Decree, specialized agencies under provincial People's Committees shall report to the provincial People's Committee for decision-making on amending, supplementing, or issuing the list of public services funded by the state budget within their jurisdiction and consistent with the local budget capacity within the approved budget by the Provincial People's Assembly, and send it to the Ministry of Finance and relevant ministries and sectors for supervision during implementation."list of incentives for Da Nang High-Tech Zone;ẵc) Participating in assessing the conditions of food production and business establishments in the area according to the分级回复 

PART I

SCOPE AND SUBJECTS OF REGULATION

Article 1. Scope of Regulation

This Decree stipulates certain mechanisms and preferential policies for Khuong High-Tech Industry Danang (Khuong High-Tech Industry).

Investors may apply the mechanisms and preferential policies under this Decree or other applicable provisions of Vietnamese law.

Article 2. Applicability

1. Vietnamese organizations and individuals, overseas Vietnamese, foreign organizations and individuals operating in Khuong High-Tech Industry.

2. Management Board of Khuong High-Tech Industry Danang (Management Board).

3. Relevant state management agencies and specialized agencies.

Chapter II

MECHANISMS FOR RAISING FUNDS TO INVEST IN DEVELOPING THE HIGH-TECH INDUSTRY ZONE

Article 3. Sources of funds for investment in developing the high-tech industry zone

1. The central budget shall prioritize allocating sufficient additional targeted funds (the portion of the central budget committed to support in each phase) to the city budget to implement projects and works within the high-tech industry zone and national programs for developing the high-tech industry zone.

2. Annually, in cases where the central budget exceeds its revenue, the Government shall report to the Standing Committee of the National Assembly to prioritize funding for the high-tech industry zone to complete infrastructure and technical facilities in the high-tech industry zone by 2020.

3. The Government shall prioritize raising Official Development Assistance (ODA) funds for Da Nang City to invest in building technical infrastructure, social infrastructure, and necessary public utility projects, training centers, research and development technology centers, and high-tech enterprise incubation centers. The allocation of domestic counterpart funds for these projects and works shall be guaranteed by the city budget.

4. Annually, the People's Committee of Da Nang City shall concentrate on allocating sufficient investment funds from the local budget to complete projects and works within the high-tech industry zone according to the approved plan; the Management Board may raise domestic funds in accordance with the law to invest in building and developing the high-tech industry zone.

Article 4. Projects and works within the high-tech industry zone shall be eligible for investment fund mobilization

1. Construction of technical infrastructure within the high-tech industry zone includes the following items: land leveling, channel system, drainage system, wastewater discharge system, waste treatment system, technical trench and tunnel system, transportation, water supply system, information technology system, power supply system, lighting system, sidewalks, fences, entrance gates, greenery, public landscape.

2. Payment of compensation, land clearance, and resettlement for projects and works within the high-tech industry zone according to the approved plan by the competent authority.

3. Construction of works within the high-tech industry zone:

a) Research and development, training, and enterprise incubation area: Training Center, High-Tech Enterprise Incubation Center, Applied Research and Technology Development Center under the Management Board;

b) Administrative management area;

c) Central technical infrastructure works area.

Chapter III

INVESTMENT PREFERENTIAL POLICIES

Article 5. Preferential treatment for land rent payment and non-agricultural land use tax

1. Full exemption from land rent for the entire duration of the investment project lease in the following cases:

a) Land for constructing transportation works and technical infrastructure, green spaces, water bodies, public parks according to approved general planning and detailed planning;

b) Land for constructing public service facilities of state-owned public organizations;

c) Land for establishing high-tech human resource training bases in accordance with laws on high technology;

d) Land for implementing housing projects for experts and workers leasing when working at the High-Tech Zone according to approved planning by competent state authorities;

đ) Projects included in the List of Priority Investment Fields (excluding projects investing in and operating infrastructure in the High-Tech Zone);

2. The level of preferential exemptions and reductions in land rent for projects not covered under Clause 1 of this Article shall be as follows:

a) Exemption from land rent during the basic construction period but not exceeding three years from the date of the decision to lease the land (excluding investments in expanding and upgrading production and business facilities);

b) Exemption from land rent for fifteen years after the basic construction period for projects not listed in the Investment Incentive Fields List; projects investing in and operating infrastructure in the High-Tech Zone;

c) Exemption from land rent for nineteen years after the basic construction period for projects listed in the Investment Incentive Fields List;

d) Exemption from land rent during periods when production and business operations must cease due to natural disasters, fires, or other unforeseen accidents;

3. The list of investment incentive fields and the list of priority investment fields shall be implemented in accordance with laws on investment;

4. In cases where land users lease land in the High-Tech Zone to implement socialized projects in education, vocational training, healthcare, culture, sports, and environmental fields, the level of preferential exemptions and reductions in land rent shall be applied in accordance with government policies encouraging socialization in these fields;

5. Land users are exempt from non-agricultural land use tax throughout the entire period of land use;

Article 6. Refund of compensation and clearance costs

1. Land users are not required to refund compensation and clearance costs in the following cases:

a) Granted land without payment of land use fee, and fully exempted from land rent for the entire lease period, and already handed over land by the Management Board before July 1, 2014;

b) Using land and water surfaces to construct transportation works, technical infrastructure, green areas, public parks according to approved general planning and functional zoning (including cases where land was used prior to the effective date of this Decree);

c) The Management Board and its subordinate units using land to construct office buildings, public facilities, and infrastructure management and exploitation works (including cases where land was used prior to the effective date of this Decree);

đ) Leasing land annually and eligible for exemption or reduction in land rent but voluntarily waiving such benefits;

đ) For projects with capital of 30,000 billion VND or more, land users are not required to refund compensation and clearance costs;

2. Cases of land use not specified in Clause 1 of this Article must refund compensation and clearance costs in accordance with regulations.

Article 7. Tax Incentives for Corporate Income Tax

1. Tax Rate Incentives

a) A tax rate of 10% shall be applied for a period of 15 years to the income of enterprises implementing new investment projects in the High-Tech Zone.

b) For new investment projects in the High-Tech Zone with a capital scale of 30,000 billion VND or more, a preferential tax rate of 10% shall be applied for a period of 30 years.

c) The income of enterprises from implementing social housing projects for sale, lease, or lease-purchase to workers employed at enterprises within the High-Tech Zone shall be subject to a preferential tax rate of 10%, similar to the treatment for workers currently working inside and outside industrial zones as stipulated in Clause 5, Article 49 of the Law on Housing.

2. Exemption and Reduction Incentives

a) Enterprises implementing new investment projects in the High-Tech Zone shall be exempted from tax for four years and have their tax reduced by 50% for the next nine years.

b) Other cases of exemption and reduction shall be implemented according to the provisions of the Law on Corporate Income Tax and related documents.

Article 8. Import Tax Incentives

1. Exemption from import tax applies to goods imported to form fixed assets of projects in the High-Tech Zone, including:

a) Machinery, equipment; spare parts, components, detachable parts, accessories for assembly or use in conjunction with machinery and equipment; raw materials, materials used to manufacture machinery and equipment or to manufacture spare parts, components, detachable parts, accessories of machinery and equipment;

b) Special transportation means used directly in production processes of the project;

c) Construction materials not yet produced domestically.

The exemption from import tax for goods imported under this clause shall apply to both new investment projects and expanded investment projects.

2. Exemption from import tax for a period of five years from the start of production for raw materials, materials, and spare parts not yet produced domestically, imported for production by projects investing in the High-Tech Zone.

3. Exemption from import tax for machinery, equipment, accessories, materials for special use not yet produced domestically, scientific literature, books specifically used for direct research, development of technology, fostering of technology activities, fostering of science and technology enterprises, and technological innovation in the High-Tech Zone.

Article 9. Investment Credit Incentives

Enterprises, economic organizations, public service units with revenue investing in projects listed in the Catalogue of Projects Borrowing Investment Credit Loans as prescribed by current laws.

Chapter IV

OTHER INCENTIVES

Article 10. Infrastructure Usage Fee

1. The infrastructure usage fee is a revenue aimed at compensating for the costs of construction, maintenance, repair, and maintenance conditions serving or recreating technical and social infrastructure works.

2. Investors with production and business projects in the High-Tech Zone that use technical and social infrastructure works within the zone must pay the infrastructure usage fee.

3. For works invested in and operated by enterprises engaged in infrastructure construction and operation in the High-Tech Zone:

a) Enterprises engaged in infrastructure construction and operation in the High-Tech Zone shall organize management, exploitation, and collection of the infrastructure usage fee from investors within the zone; they are responsible for maintaining the condition of service of these infrastructure works in accordance with the law;

b) The level of infrastructure usage fees for technical and social infrastructure works invested in and constructed by enterprises engaged in infrastructure construction and operation in the High-Tech Zone shall be decided by such enterprises and calculated as a percentage of one of the following indicators: Total export revenue; total production and service revenue; total land rental fees already equipped with infrastructure.

4. For works not invested in and constructed by enterprises engaged in infrastructure construction and operation in the High-Tech Zone:

a) The Management Board shall be responsible for organizing management, exploitation, maintenance, and collection of the infrastructure usage fee from investors within the zone to invest in the maintenance, repair, and maintenance of the condition of service of these infrastructure works and implement management in accordance with the law;

b) The level of common infrastructure usage fees for technical and social infrastructure in the High-Tech Zone not invested in and constructed by enterprises engaged in infrastructure construction and operation shall be regulated by the People's Committee of Da Nang City in accordance with the Law on Prices and other relevant laws, and the People's Committee of Da Nang City shall decide on pricing methods ensuring suitability with local socio-economic conditions and state policies.

5. Enterprises engaged in infrastructure construction and operation and the Management Board shall manage and use the entire amount collected to offset costs and fulfill tax obligations as prescribed by law. When collecting infrastructure usage fees, enterprises engaged in infrastructure construction and operation and the Management Board must issue and deliver invoices to the payer; they must separately account for and manage the entire amount collected in accordance with the law. The invoice for infrastructure usage fees issued by enterprises engaged in infrastructure construction and operation and the Management Board to the payer is a valid document, recorded as part of production and business expenses and eligible for VAT deduction when determining tax liabilities as prescribed by law.

Article 11. Entry and Exit

Investors, experts, and workers who are Vietnamese residing abroad, foreigners directly working at the High-Tech Zone, and family members (including father, mother, spouse, biological or adopted children under 18 years old) shall be considered for issuance of multiple-entry visas with durations appropriate to their purpose of entry in accordance with the law.

Chapter V

IMPLEMENTATION PROVISIONS

Article 12. Effectiveness and Responsibility for Implementation

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

2. The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairman of the People's Committee of Da Nang City, Director of the Management Board of Da Nang High-Tech Zone, and Heads of related agencies are responsible for implementing this Decree.