Decision No. 144/2004/QĐ-TTg On supplementing certain preferential policies for the Moc Bai Border Economic Zone, Tay Ninh Province

DECISION

Regarding additional preferential policies for

the Moc Bai Border Economic Zone, Tay Ninh Province

PRIME MINISTER

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

Considering the proposal of the Chairman of the People's Committee of Tay Ninh Province at the report number 369/TT-UB dated October 11, 2002 and the Circulars number 151/UB dated May 22, 2003, number 25/UB dated July 11, 2003, number 381/UB dated December 10, 2003, number 138/UB dated April 27, 2004, number 210/UB dated June 16, 2004;

Considering the proposal of the Minister of Planning and Investment at the reports number 1425 BKH/QLKT dated March 17, 2003, number 2426/BKH-QLKTTW dated April 22, 2004 and the opinions of relevant ministries and sectors,

DECISION:

Article 1. The Trade and Industry Zone within the Moc Bai Border Economic Zone (hereinafter referred to as the Trade and Industry Zone, within the scope of 986 hectares as approved) shall be entitled to additional preferential policies under this Decision upon satisfying the following conditions:

- Having a solid fence ensuring isolation of activities within the Trade and Industry Zone from other functional zones within the border economic zone.

- There shall be no residential area (including foreigners) or permanent or temporary residents within the Trade and Industry Zone.

- Having a Control Post to monitor and inspect persons, goods, and means of transport entering and exiting the Trade and Industry Zone.

Article 2.

- Organizations operating within the Trade and Industry Zone are permitted to export to foreign countries and import from foreign countries all goods and services not prohibited by Vietnamese law.

- Goods and services imported from foreign countries into the Trade and Industry Zone or exported from the Trade and Industry Zone to foreign countries are exempt from import tax and export tax.

- Goods and services imported from foreign countries into the Trade and Industry Zone are exempt from value-added tax.

- The exchange of goods and services between the Trade and Industry Zone and other functional zones within the border economic zone and domestic areas must comply with the provisions of Vietnamese law on the management of export and import goods and services.

- Goods and services exported from the Trade and Industry Zone to foreign countries are subject to a zero percent value-added tax rate; goods and services brought into the Trade and Industry Zone from other functional zones within the border economic zone and from domestic areas are subject to a zero percent value-added tax rate; goods and services brought from the Trade and Industry Zone into other functional zones within the border economic zone and into Vietnam’s domestic areas must pay value-added tax according to current laws.

- Economic organizations and individuals within the border economic zone and domestic areas may only import goods and services that Vietnam does not prohibit from being imported into the Trade and Industry Zone and may only export goods and services that Vietnam does not prohibit from being exported from the Trade and Industry Zone, and must be subject to inspection and supervision by Customs.

- Goods and services subject to special consumption tax produced, consumed, or imported from foreign countries into the Trade and Industry Zone within the Moc Bai Border Economic Zone are exempt from special consumption tax.

- Goods and services subject to special consumption tax exported from the Trade and Industry Zone to foreign countries are exempt from special consumption tax.

- Goods and services subject to special consumption tax brought from the Trade and Industry Zone within the Moc Bai Border Economic Zone into Vietnam’s domestic areas must pay special consumption tax.

- Goods and services manufactured, processed, recycled, or assembled at the Trade and Industry Zone within the Moc Bai Border Economic Zone using imported raw materials and components according to current regulations on import management; when imported into Vietnam’s domestic areas, they only need to pay import tax on the portion of raw materials and components constituting the product or goods. In cases where no imported raw materials or components are used, no import tax is required.

Article 3. All investment projects in the Trade and Industry Zone shall enjoy maximum incentives applicable to areas with particularly difficult socio-economic conditions as stipulated in the Law on Foreign Investment in Vietnam dated November 12, 1996; the Law Amending and Supplementing Certain Provisions of the Law on Foreign Investment in Vietnam dated June 9, 2000; the Law Encouraging Domestic Investment (Amended) dated May 20, 1998; the Corporate Income Tax Law; the Value-Added Tax Law; and other incentives according to international treaties, multilateral or bilateral trade agreements to which Vietnam is a party.

- Investment projects in the Trade and Industry Zone within the Moc Bai Border Economic Zone shall be exempt from corporate income tax for four years from the date of generating taxable income, and shall have their corporate income tax reduced by 50% for nine consecutive years thereafter; they shall apply a corporate income tax rate of 10% for fifteen years from the date the investment project begins operations.

- Investment projects constructing new production lines, expanding scale, updating technology, improving ecological environment, and enhancing production capacity shall be exempt from corporate income tax for up to four years on additional income generated by the investment and shall have their corporate income tax reduced by 50% for up to seven years thereafter.

- Where legal regulatory documents provide different levels of incentives for the same issue, the incentive level provided in the document with higher legal validity shall apply.

- Where legal regulatory documents issued by the same authority provide different provisions on the same issue, the provision of the document issued later shall apply.

Article 4. Investment projects in tourism business located in the Ecotourism Zone within the Moc Bai Border Economic Zone shall be added to the list of industries eligible for investment incentives specified in the appendix to Decree No. 51/1999/NĐ-CP dated July 8, 1999 of the Government detailing the implementation of the Law on Encouraging Domestic Investment (Amended).

Article 5. Delegating the Chairman of the People's Committee of Tay Ninh Province to issue investment permits for projects in the Trade and Industry Zone with a scale below 40 million USD through the simplest procedures. For projects with specific regulations, they must follow current regulations.

Article 6. Permitting organizations and individuals with investment projects in the Industrial and Trade Zone within the Moc Bai Border Economic Zone to be exempt from land lease fees for the first 11 years from the date of signing the land lease contract and to enjoy a land lease price equal to 30% of the applicable lease price in the area starting from the 12th year onwards.

Article 7. For domestic and foreign tourists entering the Industrial and Trade Zone mentioned in Article 1 of this Decision, they are permitted to purchase goods to bring back to the domestic market and are exempt from import tax if the value of the goods does not exceed 500,000 VND/person/day.

Article 8. Investment support from the state budget for constructing infrastructure in the Moc Bai Border Economic Zone shall be carried out in accordance with the planning and project.

The Chairman of the Provincial People's Committee shall establish an investment project for infrastructure in the Border Economic Zone. Based on the list of works and investment projects established and approved by the Chairman of the Provincial People's Committee after obtaining the agreement document from the Ministry of Planning and Investment: the Ministry of Planning and Investment and the Ministry of Finance shall compile and report to the Government, submit to the National Assembly for approval of targeted support for the province in the annual state budget estimate, concentrated over a period of 06 (six) years from 2005 to 2010.

The Chairman of the Provincial People's Committee may use land use fees to construct infrastructure and create capital for land clearance for development investment. Infrastructure development projects in the Border Economic Zone and investment development in the Industrial and Trade Zone may borrow preferential state funds and use the supported capital as stipulated in this Article to repay principal and interest.

Article 9. The People's Committee of Tay Ninh Province shall be responsible for:

- Implementing well the policies prescribed in Decision No. 210/1998/QĐ-TTg dated October 27, 1998; Decision No. 53/2001/QĐ-TTg dated April 19, 2001 of the Prime Minister regarding policies for Border Economic Zones, related policies, and the policies set forth in this Decision.

- After two years, the province shall take the lead and coordinate with relevant ministries and sectors to conduct a summary and evaluation of the application of certain additional preferential policies, and propose necessary adjustments and supplements to the Prime Minister.

Article 10. The Standard Measurement Quality Control Department shall be responsible for organizing and guiding the implementation of the Regulations adopted herein.

The Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, and the Chairman of the People's Committee of Tay Ninh Province shall be responsible for implementing this Decision.