Circular No. 95/2004/TT-BTC guiding certain financial support policies and tax incentives for developing raw material areas and processing industries of agriculture, forestry, aquaculture, and salt.

CIRCULAR

Guidelines on certain financial support policies and tax incentives for developing raw material areas and processing industries for agriculture, forestry, aquaculture, and salt

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government on the tasks, powers, and organizational structure of the Ministry of Finance;

To implement Directive No. 24/2003/CT-TTg dated October 8, 2003 of the Prime Minister on developing processing industries for agriculture, forestry, and aquaculture, the Ministry of Finance issues guidelines on certain financial support policies and tax incentives for developing raw material areas and processing industries for agriculture, forestry, aquaculture, and salt as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. The subjects to which this Circular applies are organizations and individuals of all economic sectors (including domestic and foreign entities) that have sufficient capital and specialized capacity, and have investment projects for developing raw material areas and processing industries for agriculture, forestry, aquaculture, and salt according to approved plans under Decree No. 52/1999/NĐ-CP dated July 8, 1999 and Decree No. 07/2003/NĐ-CP dated November 30, 2003 of the Government amending and supplementing certain provisions of the Investment Management and Construction Regulation issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999 and Decree No. 12/2000/NĐ-CP dated May 5, 2000 of the Government.

2. Raw material areas as defined in this Circular are concentrated agricultural, forestry, salt, and aquaculture production zones linked to processing facilities and consumption outlets according to approved plans.

3. Processing industry as defined in this Circular includes processing facilities for agriculture, forestry, aquaculture, and salt linked to concentrated raw material zones according to approved plans.

II. SPECIFIC PROVISIONS

1. Land policy:

Based on approved raw material areas and processing industries for agriculture, forestry, aquaculture, and salt, provincial People's Committees are responsible for directing relevant agencies to create favorable conditions for organizations and individuals of all economic sectors to lease land or enter into contracts with farmers to invest in developing raw material areas; lease land to build processing facilities for agriculture, forestry, aquaculture, and salt according to approved investment projects.

1.1. Organizations and individuals leasing land to develop raw material areas for agriculture, forestry, aquaculture, and salt are exempted or granted reductions in agricultural land use tax according to Circular No. 112/2003/TT-BTC dated November 19, 2003 guiding the exemption and reduction of agricultural land use tax from 2003 to 2010 as stipulated in Decree No. 129/2003/NĐ-CP dated November 3, 2003 of the Government detailing the implementation of Resolution No. 15/2003/QH11 dated June 17, 2003 of the National Assembly on the exemption and reduction of agricultural land use tax.

1.2. Processing, consumption, and export establishments for agricultural, forestry, aquaculture, and salt products needing land to construct processing plants, warehouses, storage facilities, and transportation infrastructure shall enjoy preferential land rental prices at the lowest rates prescribed by current laws.

1.3. In cases where enterprises with processing, consumption, and export establishments for agricultural, forestry, aquaculture, and salt products located within cities or towns move their production sites out of these urban areas according to approved plans, they will be exempted from land rental fees for three years from the completion date of construction on new sites, or they may benefit from preferential exemptions and reductions in land rental fees as stipulated in Circular No. 35/2001/TT-BTC dated May 25, 2001 of the Ministry of Finance on guidelines for paying land rental fees and contributing land value in joint ventures by domestic organizations, households, and individuals (if applicable).

1.4. Revenue from land rental contracts for processing, consumption, and export establishments for agricultural, forestry, aquaculture, and salt products is local government revenue as prescribed by the State Budget Law (amended). Each year, provinces and centrally-administered cities must prioritize and allocate funds to invest in infrastructure in raw material areas and processing, consumption, and export establishments for agricultural, forestry, aquaculture, and salt products.

2. Investment Policy:

2.1. Infrastructure projects such as roads, irrigation systems, canals, drainage structures, aquaculture infrastructure, power lines, wholesale market systems, trading centers for agricultural, forestry, and aquaculture products, and storage facilities located within concentrated raw material areas linked to processing facilities for agricultural, forestry, and aquaculture products and salt are supported by the state with a portion of centralized construction funds as prescribed by the State Budget Law (amended). The proportion of local budget support for each project is determined by the provincial People's Committees to suit each region and locality and based on the budget's capacity but not exceeding 60% of the total investment capital of the project.

2.2. Projects for planting raw materials for paper, pulp, and artificial boards concentrated around processing enterprises, projects for producing original and new seedlings using advanced technology to serve the development of raw material areas, and projects for investing in the production and processing of industrial salt shall benefit from state credit investment development policies as currently prescribed.

3. Support Policies for Technology Transfer and Technological Advancement:

- After being approved by competent authorities, projects for developing raw material areas and processing industries for agriculture, forestry, aquaculture, and salt will be supported financially from the state budget to:

+ Import and rapidly disseminate new varieties, upgrade and construct new seedling production bases, and supply seeds for raw material area development.

+ Fund activities such as hiring experts, purchasing designs, acquiring technology, and transferring technological advancements for raw material production and new product processing.

+ Fund agricultural and fishery extension activities.

- On the basis of specific conditions of each sector and the effectiveness of new technology transfer projects, the Ministry of Finance shall coordinate with the Ministry of Agriculture and Rural Development and the Ministry of Fisheries to decide on support for enterprises established by the Government and central ministries and sectors. The source of support shall be allocated in the annual plan of the Central Budget.

The People's Committees of provinces and centrally governed cities shall decide on support for enterprises established by localities. The source of support shall be allocated in the annual plan of the local budget.

4. Export support and trade promotion:

Enterprises processing agricultural, forestry, aquatic products, and salt for export shall be supported in export activities and trade promotion in accordance with the current Decision of the Government and the guidance of the Ministry of Finance (Circular No. 86/2002/TT-BTC dated August 27, 2002 of the Ministry of Finance on guiding the provision of financial support for trade promotion activities to boost exports).

5. Tax incentives policy:

In addition to tax incentives prescribed in the Law on Investment Promotion within the Country, the Law on Foreign Investment in Vietnam, and implementing regulations issued by the Government, organizations and individuals from all economic sectors with projects to develop raw material areas and industrial processing of agricultural, forestry, aquatic products, and salt shall enjoy the following incentives:

5.1. Import tax:

Exemption from import tax on machinery, equipment, and specialized transportation means included in the production technology chain imported to form fixed assets that are not yet produced domestically.

5.2. Corporate income tax:

Industrial establishments processing agricultural, forestry, aquatic products, and salt in industries, fields, and regions of operation, and with projects to invest in building new production lines, expanding scale, modernizing technology, improving ecological environment, and enhancing production capacity as stipulated in Decree No. 164/2003/NĐ-CP dated December 22, 2003 of the Government detailing the implementation of the Law on Corporate Income Tax shall enjoy corporate income tax incentives, being exempted or granted reductions on additional income generated by such investments according to the guidance of the Ministry of Finance (Circular No. 128/2003/TT-BTC dated December 22, 2003 of the Ministry of Finance guiding the implementation of Decree No. 164/2003/NĐ-CP dated December 22, 2003). Where multiple tax incentives apply, the highest level of incentive shall be applied.

III. IMPLEMENTATION

This Circular shall take effect fifteen days after its publication in the Official Gazette. During implementation, if there are difficulties or obstacles, organizations, individuals, and centrally governed cities are requested to report them to the Ministry of Finance for resolution.