Circular No. 93/2007/TT-BTC guiding certain mechanisms and preferential policies on finance for Phu Quy Island, Binh Thuan Province

CIRCULAR

Guidelines on certain financial incentive mechanisms and policies for Phu Quy Island, Binh Thuan Province

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Pursuant to the State Budget Law;

Pursuant to laws and ordinances on taxes, fees, and charges;

Pursuant to Decision No. 312/QĐ-TTg dated March 14, 2007 of the Prime Minister on the issuance of the Regulations on the organization and operation of Phu Quy Island, Binh Thuan Province;

After receiving consistent opinions from the Ministry of Planning and Investment (document No. 4324/BKH-KTĐP< dated June 21, 2007) and the People's Committee of Binh Thuan Province (document No. 2879/UBND-TH dated June 27, 2007), the Ministry of Finance provides guidelines on certain financial incentive mechanisms and policies for Phu Quy Island, Binh Thuan Province as follows:

I. GENERAL PROVISIONS

Article 1. Scope of Application:

The financial incentive mechanisms and policies for Phu Quy Island, Binh Thuan Province stipulated in this Circular shall be applicable within the administrative area of Phu Quy Island, Binh Thuan Province, including Tam Thanh, Nguphung, and Long Hai communes of Phu Quy Island District as specified in Article 1 of Decision No. 14/2002/QĐ-TTg dated January 15, 2002 of the Prime Minister approving the Plan "Phu Quy Island Economic Zone, Binh Thuan Province".

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

The subjects to which this Circular applies are investors belonging to various economic sectors operating in accordance with the Law on Investment, the Enterprise Law, the Cooperative Law; individual business households; independent professionals; organizations and individuals engaged in business activities in accordance with Vietnamese law.

3. Principles of investment incentives:

The financial regime prescribed in this Circular shall only apply to business operations conducted within the administrative area of Phu Quy Island. In cases where organizations and individuals have business operations both within the administrative area of Phu Quy Island and in mainland Vietnam, they must separately account for their business operations within the administrative area of Phu Quy Island as the basis for determining the financial regime to be applied. Foreign-invested enterprises and foreign parties participating in joint venture contracts that have been granted investment licenses; domestic businesses that have been granted investment preference certificates at Phu Quy Island before the effective date of Decision No. 312/QĐ-TTg dated March 14, 2007 of the Prime Minister on the issuance of the Regulations on the organization and operation of Phu Quy Island, Binh Thuan Province (hereinafter referred to as Decision No. 312/QĐ-TTg) but have not yet fully enjoyed preferences shall continue to enjoy the preferential policies stipulated in this Circular for the remaining period of preference, provided that if the project has a higher level of preference than that prescribed in this Circular, it shall continue to implement the previously prescribed preference for the remaining period of the project.

Investment projects in Phu Quy Island shall enjoy the maximum incentives allocated for investment projects in areas with particularly difficult socio-economic conditions as prescribed by the Investment Law, the Corporate Income Tax Law, the Value Added Tax Law, and other incentives under international agreements, bilateral and multilateral trade agreements to which Vietnam is a party.

Where different levels of preference are prescribed by normative legal documents on the same issue, the higher-level legal document shall apply.

Where different provisions are prescribed by normative legal documents on the same issue issued by the same authority, the later-issued document shall apply.

II. SPECIFIC PROVISIONS

1. Tax policy for Phu Quy Island:

1.1. Corporate Income Tax:

a. Investment projects of domestic and foreign organizations and individuals to establish new production and business establishments in Phu Quy Island shall enjoy a corporate income tax rate of 10% for 15 years, starting from the date the investment project begins operations; exempt from corporate income tax for 4 years from the date of taxable income, and reduce 50% of the tax payable for the next 9 years.

b. Investment projects of domestic and foreign organizations and individuals in Phu Quy Island in high-tech fields meeting the provisions of Clause 2, Article 5 of Decree No. 99/2003/NĐ-CP dated August 28, 2003 of the Government on the issuance of the High-Tech Zone Regulations; Investment projects of domestic and foreign organizations and individuals in Phu Quy Island with large scale and significant importance to the socio-economic development of Phu Quy Island and substantial impact on the surrounding area of Phu Quy Island shall enjoy a corporate income tax rate of 10% throughout the implementation period of the project upon approval by the Prime Minister.

Investment projects of domestic and foreign organizations and individuals in Phu Quy Island with large scale and significant importance to the socio-economic development of Phu Quy Island and substantial impact on the surrounding area of Phu Quy Island include:

- Investment projects for constructing production facilities and supplying electricity, renewable energy;

- Transportation projects from the mainland to Phu Quy Island and vice versa;

- Projects for providing fresh water for daily use and production on Phu Quy Island;

- Environmental protection projects.

c. Production and business establishments investing in building new production lines, expanding scale, updating technology, improving ecological environment, and enhancing production capacity shall comply with current regulations on corporate income tax.

d. Income subject to corporate income tax from land use rights transfer and land lease rights transfer shall be taxed according to current regulations on corporate income tax.

đ. To implement corporate income tax preferences, organizations and individuals with investment projects in Phu Quy Island must submit copies of the Business Registration Certificate (for domestic enterprises) or Investment License (for foreign-invested enterprises) to the tax authority where the enterprise declares and pays taxes. The corporate income tax preference shall only apply to production and business establishments that fully comply with accounting records, invoices, and certificates registered and declared for tax purposes.

e. During the course of operations, if a loss occurs after settlement with the tax authority, the enterprise may carry forward the loss to subsequent years to offset against taxable income according to current regulations.

f. Enterprises are responsible for notifying the tax authority where the enterprise registers, declares, and pays taxes about the period during which corporate income tax exemptions and reductions are implemented as stipulated herein.

1. 2. Export tax, import tax:

Imported goods intended to create fixed assets are exempt from import tax, including machinery, equipment, spare parts, raw materials that are not yet produced domestically and used for manufacturing equipment and machinery in production lines and other fixed assets serving production, business operations, and service provision on Phu Quy Island for new investment, expansion of project scale, and technological renewal. Additionally, imported goods such as raw materials, fuel, and supplies for production and operation of BOT projects are also exempt from import tax.

The procedures, documents for tax exemption, declaration, and settlement of import tax in this case shall be carried out in accordance with Circular No. 59/2007/TT-BTC dated June 14, 2007, issued by the Ministry of Finance, guiding the implementation of export tax, import tax, and tax management for exported and imported goods.

1. 3. Special consumption tax, value-added tax:

Goods and services produced, consumed on Phu Quy Island or exchanged and circulated between Phu Quy Island and other regions and abroad shall comply with current laws regarding special consumption tax, value-added tax, other types of taxes, fees, and charges.

1. 4. Land rent, water surface rent, sea surface rent, and land use:

a. Regarding land rent, water surface rent, sea surface rent:

Investment projects on Phu Quy Island are exempt from land rent, water surface rent, and sea surface rent according to Decree No. 142/2005/NĐ-CP dated November 14, 2005, issued by the Government on land rent collection, water surface rent, and other provisions of the Law on Land.

b. Regarding land use fee, water surface use fee, sea surface use fee:

Investment projects on Phu Quy Island, when allocated land and required to pay the land use fee according to regulations, are exempt from the land use fee, water surface use fee, and sea surface use fee.

1. 5. Price, fee, charge, and other types of tax:

- Implement a single price policy for goods and services for organizations and individuals, regardless of domestic or foreign entities engaged in production and business activities on Phu Quy Island.

- The price of land lease, the price of leasing land that has been developed with technical infrastructure, the cost of using technical infrastructure works, service facilities, and public utilities on Phu Quy Island shall be determined by infrastructure businesses after negotiating with the People's Committee of Binh Thuan Province.

- Prices, fees, charges, and other types of taxes applicable on Phu Quy Island shall be implemented in accordance with current laws.

2. Preferential credit regime:

Programs and projects on Phu Quy Island eligible for state credit loans under current laws shall be prioritized for loan allocation to implement them.

3. Preferential development of infrastructure:

3. 1. State budget investment support for infrastructure construction:

The State prioritizes allocating capital from the state budget (NSNN) and other sources to invest in infrastructure construction in the three communes of Tam Thanh, Nguphung, and Long Hai, and implements support policies according to Decision No. 257/2003/QD-TTg dated December 3, 2003, of the Prime Minister on supporting investment in essential infrastructure construction in particularly difficult communes in coastal areas and islands.

The People's Committee of Binh Thuan Province is the direct investor managing projects funded by the provincial budget and projects using supplementary funds from the central budget for the Binh Thuan provincial budget. Construction using state budget capital shall be carried out in accordance with current national regulations on investment and construction management.

- The People's Committee of Binh Thuan Province is responsible for preparing investment projects for approval in accordance with current regulations on basic investment management and arranging the priority order for construction projects and components to ensure effective use upon completion and commissioning, following the principle that local budgets prioritize funding for certain socio-economic development projects and ensuring national defense and security on Phu Quy Island.

- Among the projects funded by the central budget, if the Prime Minister decides that ministries and central agencies are the investors, they will directly manage these projects; Projects specified in Point b, Clause 2, Article 1, Decision No. 312/QD-TTg are funded and managed by the Binh Thuan provincial budget, and directed to implement investment:

Annually, before July 25 of the previous year, based on the total investment amount, phased investment plans for projects on Phu Quy Island approved by competent authorities, and the progress of project implementation, the Department of Finance and the Department of Planning and Investment of the province shall coordinate with relevant agencies to advise the People's Committee of the province to submit to the Provincial People's Council for decision on allocating funds to implement projects in the annual plan. In cases where local management needs exceed local budget capacity, the People's Committee of the province shall report to the Ministry of Finance and the Ministry of Planning and Investment for consolidation and reporting to the Government for the National Assembly to decide on additional targeted support for the province to implement according to the State Budget Law.

- For projects invested through ministries and central agencies as stipulated in Point a, Clause 2, Article 1, Decision No. 312/QD-TTg dated March 14, 2007, of the Prime Minister:

Annually, based on the total investment amount of these projects approved by competent authorities, ministries and central agencies with related projects shall prepare investment demand budgets and submit them to the Ministry of Planning and Investment and the Ministry of Finance before July 25 of the previous year for consolidation and reporting to the Government for the National Assembly to decide according to the State Budget Law on investment projects from centralized state budget funds. For key and critical projects, to accelerate investment progress, the Ministry of Planning and Investment shall cooperate with the Ministry of Finance to select projects, consolidate, and submit to the competent authority for decision on investment support from government bonds.

3. 2. Mechanism for using land funds to generate capital for infrastructure development:

3. 2. Regime for using land funds to develop infrastructure:

The People's Committee of Binh Thuan Province may use revenues from land (including revenues as prescribed by laws on land such as land use fees, land lease fees) to build infrastructure and create capital for land clearance for investment development, prioritizing Phu Quy Island. Specifically, land use fees and lease fees for land funds within the planning of Phu Quy Island can only be used to invest in building infrastructure for Phu Quy Island. The allocation of land and leasing of land to create capital for investment in building infrastructure for Phu Quy Island shall be carried out through public auctions of land use rights, bidding for projects using land under Decree No. 181/2004/ND-CP dated October 29, 2004 of the Government on implementing the Land Law, Decree No. 17/2006/ND-CP dated January 27, 2006 of the Government amending and supplementing certain articles of decrees guiding the implementation of the Land Law, and Decree No. 109/2007/ND-CP dated June 26, 2007 on converting state-owned enterprises with 100% state capital into joint-stock companies, Decision No. 216/2005/QD-TTg dated August 31, 2005 of the Prime Minister on promulgating regulations on public auctions of land use rights for allocating land with land use fees or leasing land, and other relevant provisions of current laws (except for some cases where public auctions of land use rights are not implemented according to the law, such as when the land put up for auction has no participants, land put up for auction at least twice but fails, land that only has one investor proposing a project requesting to allocate land or lease land in accordance with the planning).

Based on the local land use plan, the ability to collect land use fees from auctions, and the needs for compensation and support for people whose land is reclaimed and the needs for investment in infrastructure works under the scope of state budget investment as prescribed by law, the People's Committee of Binh Thuan Province directs the financial agency to consolidate these revenue and expenditure tasks into the annual state budget estimate to be submitted to the Provincial People's Council for decision.

Based on the annual state budget estimate decided by the Provincial People's Council, the People's Committee of Binh Thuan Province assigns the financial agency to coordinate with related units to organize the collection and expenditure from land use fee revenues and settle accounts into the state budget according to the prescribed regulations.

In the case where organizations or individuals advance funds to implement compensation and support for people whose land is reclaimed for investment in infrastructure works under the scope of state budget investment, then subsequently carry out auctions to collect land use fees, the land use fee revenue used to repay the organizations or individuals who advanced funds must be fully recorded in the state budget according to current regulations.

3. 3. Investment in infrastructure from other sources of capital:

Infrastructure technical-social works, public utility service works necessary for Phu Quy Island, and other technical assistance, if they belong to fields of investment with potential for capital recovery, may mobilize investment capital through BOT, BTO, BT forms or issue domestic construction bonds according to current laws. The People's Committee of Binh Thuan Province will consider appropriate investment forms for each specific project to submit to the Provincial People's Council for decision on selecting the investment form.

III. IMPLEMENTATION

1. The People's Committee of Binh Thuan Province is responsible for:

- Closely coordinating with the Ministry of National Defense and the Ministry of Public Security to effectively implement projects related to defense strategy aimed at developing the economy and society, maintaining national security.

- Directing relevant agencies on Phu Quy Island to implement the provisions of this Circular.

2. The Tax Department of Binh Thuan Province is responsible for guiding enterprises to implement point f, Clause 1.1, Section II, of this Circular and other tax-related contents.

3. This Circular takes effect 15 days after its publication in the Official Gazette. Any difficulties encountered during implementation should be reported to the Ministry of Finance for research and supplementary guidance./.