CIRCULAR Guide made some tax provisions to encourage and ensure the operations of foreign direct investment in Vietnam defined in Decree No. 10/1998-issued pursuant to the law on foreign investment in Vietnam on 12/11/1996;
Pursuant to Decree No. 10/1998-ND-CP dated 23/1/1998 of the Government about some measures to encourage and guarantee investment activities directly in Vietnam;
The Ministry of Finance shall guide the implementation of a number of tax provisions to encourage and ensure the operations of foreign direct investment in Vietnam as follows: a. apply the OBJECT object applies regulations this circular guides include: the business venture or 100% foreign-owned enterprise to be established under the law on foreign investment in Vietnam.
The foreign parties involved in business cooperation contracts on the basis of a contract under the law of foreign investment in Vietnam.
Enterprises have invested abroad are established on the basis of the agreement signed between the Government of the Socialist Republic of Vietnam and foreign Governments. In the case of the Treaty contains the provisions on taxation shall follow the provisions of that agreement.
The objects mentioned on here called business for foreign investment.
 
B. MEASURES To ENSURE INVESTOR RIGHTS I. INCOME TAXES 1. Income tax: businesses that have foreign capital investment is licensed before October 23, 1996, filed tax return as prescribed in the investment license. The case of income tax provisions in the new documents issued by the Government of Vietnam to lower income tax rates stipulated in the investment license, then securing rights for investors about income tax rates are as follows: investment licensing bodies done to adjust income tax for enterprises under new rules in the following cases: business in the project make sure enough two conditions: the project in the project list and investment promotion in the category encouraged investment as defined in Pphụ of contents 1 Decree 10/1998/ND-CP dated 23/1/1998 of the Government be applying preferential income tax rates during the rest of the project activities.
Enterprises investing in the area, after which the area was transformed into industrial Zones, export processing zones and high-tech zones or apply income tax incentives as stipulated in Decree No. 36/CP on 24/4/1997 of the Government.
Businesses are within are entitled to preferential tax rates prescribed in the investment license but the time limit for the tax incentives under the new rules, longer than the duration of application of the provisions in the investment license.
Enterprises not belonging to an enjoy the preferential income tax rates under the investment license but in fact guarantee the conditions to enjoy the preferential income tax rates under the new regulations.
Businesses counting on only to be the investment license Agency to adjust income tax if the business satisfy two conditions: businesses are within are entitled to preferential income tax rates under the new regulations.
Ensure business eligible to enjoy preferential income tax rates under the new regulations.
1.3. preferential income tax rates under the new regulations implemented from fiscal year license tuning effect.
1.4. the business case adjusted income tax incentives under the new rules due to the guarantee conditions: the employer or the rate of export of the product but after the time adjusted income tax incentives, enterprises can't perform eligibility income tax incentives the income tax incentive is applied only for the year Business Finance made eligibility income tax incentives. Every year, businesses must report to the licensing authority for investment and tax management agency on the implementation of the norms on the filing and paying income taxes under the tax line with business conditions are achieved. The tax agency business manager checks determine the level of implementation of the norms on and determine the level of tax payable annually by each business.
For example, A business investment are licensed in 1994 and started operations in 1996. The business investment licence is entitled to income tax of 20% during the 5 years from next year the year granted the investment license.
Scrabble use 1998 export 80% of the products consumed, according to the provisions of article 12 of Decree 54/CP shall be filed with the corporate tax return with the tax rate of 15%. In 1998 the business licensing authority adjusted income tax is 15%. Time to apply a 15% income tax is 12 years since the business started business operations. If from 1998 onwards, all business annual export rate 80%, then business will be filed income taxes according to the tax rate of 15% until the end of 2007 (12 years from 1996). The case, from 1998 to 2007 business year have just reached the rate of export products from 50% to 80%, the year that the business income tax declaration according to the tariff of 20%; or have just reached the national business year exports 30% not eligible for the tax incentives the income taxes that year corporate income tax declaration according to the tariff of 25%.
The case of the regulation on income tax in the new rules more detrimental for the business enterprises are continuing to apply the income tax has been provided for in the investment license.
2. Exemption from income tax.
Enterprises enjoy the preferential income tax exemption under the investment license. The case of the preferential income tax reduction, exemption provisions in the new rules more favorable incentives were provided for in the investment business license are entitled to preferential treatment under the new rules if: businesses are in time to be tax exemptions under the license granted. For the business investment licence granted was not exempt, income tax reduction, the only business tax exemptions under the new rules if the business is not yet profitable.
At the time of application on income tax exemption period enterprises should have enough conditions to be entitled to preferential tax exemptions under the new regulations.
The free incentives, tax reduction under the new regulations was started from the financial year permits to adjust the effect.
3. procedure for adjustment of income tax and tax exemption incentives: enterprises to adjust income tax rates and the audience enjoy the preferential tax exemptions as specified above must have dispatch send investment licensing body which stated the reason please adjust the tax incentives and tax exemptions Please adjust the tax rate, and the implementation of the norms as a basis please enjoy the incentives under the new regulations last year and the year of the report up to the enterprise application. The Agency granted investment licenses will permit adjustment for the business.
The case of the 3 year business continuity does not guarantee the conditions to enjoy the preferential tax and income tax exemption period stipulated in their investment licenses (including license to adjust), enterprises must report to the licensing authority for investment permit adjustments accordingly.
II. TAX ON THE TRANSFER OF PROFITS ABROAD

Enterprises have invested abroad are entitled to the preferential rules of transfer of profits tax to a foreign country for the transfer of profits abroad since has decided to adjust the investment license of the licensed investment.
III. IMPORTED TAX: 1. import tax exemption procedure: 1.1. For the case to be imported duty-free under the provisions of point 1 article 10, Decree No. 10/1998/ND-CP dated 23/1/1998 of the Government, the import tax exemption procedures are performed under Circular No. 74 TC/TCT on October 20, 1997 of the Ministry of finance.
The case of the enterprise with foreign investment capital not directly importing materials, raw material for the manufacture of machinery, equipment ... that contract machining, fabrication machinery, equipment with domestic enterprises, the enterprises in the country are under no imported taxes for the imported raw materials for processing construction, machinery, device as prescribed by the Prime Minister at no. 4417/KTTH on 5/9/1997 of the Government. The import tax exemption procedures are as follows: The text of the domestic business posted The proposed trade is import tax exemption for machinery and equipment under contract with the enterprise with foreign investment.
Contract machining, fabrication machinery, equipment, components, spare parts ... signed between domestic enterprises and enterprises with foreign investment.
Category, the number of materials, imported materials to manufacture equipment machining, machinery, components, spare parts ... for business foreign investment.
A copy of the license or license investment level adjustment for enterprises foreign investment to establish or expand the scale, alternative, technology innovation.
Based on the above records, the Ministry of Commerce or agency authorized by the Ministry of Commerce will review the list of items to be imported tax free after the opinion agreed the Prime Minister's tax exemption. On the basis of the list of items of imports are duty-free, the Customs Bureau of the city, centrally monitor the import of enterprises.
1.2. for the case to be imported duty-free once the equipment specified in point 2 article 10 Decree No. 10/1998/ND-CP dated 23/1/1998 of the Government, the import tax exemption procedure as specified in circular the Ministry of planning and investment-trade-finance-tourism number 11/TT-LB on 21/7/1997.
1.3. for the case to be imported duty-free raw materials prescribed in point 3 article 10, Decree No. 10/1998/ND-CP: foreign businesses investing in the projects in the portfolio of special projects to encourage investments and investment projects on the mountains, deep remote areas specified in Appendix 1 attached to Decree 10/CP is exempt from import duties for raw materials produced in the 5 years since production started. For enterprises that are active are under no imported taxes for the imported materials batch according to the Customs Declaration opened on 7/2/1998 and is limited to 5 years from the business year started production. Duty free import procedures for enterprises are defined as follows: Ministry of Commerce Please import tax-free materials to produce.
Production planning in the year and the expected number of imported raw materials production.
Base annual production plan of the enterprise, The commercial list duty free imports of raw material production of the business. For enterprises that are active, the category raw material duty free imports in 1998 do not include the number of business materials imported according to the open declaration at the Customs before 7/2/1998.
Category base raw materials imported duty-free by the Ministry of Commerce, the Bureau of customs, the import tracking the city's businesses.
1.4. for the case to be imported duty-free raw materials selling products for other businesses to directly produce export products defined in point 2 article 13 of Decree 10/1998/ND-CP dated 23/1/1998 of the Government: When importing materials, raw materials for the manufacture of products sold to other businesses to export goods production businesses must submit sufficient import tax under the regulations. After the export manufacturing enterprises have exported products, raw material import business procedures to send the Ministry of finance please complete the import tax for imported materials to manufacture products sold to enterprises producing for export. Return procedure includes: return dispatch of business in which the calculated tax amount clear proposals and imported raw materials are complete.
Material consumption quota of raw material for the manufacture of the product.
Import customs declaration and import tax receipts of raw materials used to produce goods sold to other enterprises producing for export.
The contract of sale of goods to other businesses in which specify that goods used to produce exported goods.
Sales invoices of enterprises for enterprises producing for export.
Export Customs Declaration of export production enterprises has been cargo verification gate customs did export (certified copy).
A declaration of export production enterprises in number, the value of products manufactured by enterprises has been used for the production of export products. Director of enterprise products for export must take responsibility for this Declaration.
Pursuant to the above mentioned profile Finance Ministry will complete the import tax decision for enterprises to import raw materials.
2. Access the currency import: imported goods of enterprises invested abroad to be imported duty-free under the provisions of article 10, Decree No. 10/1998/ND-CP dated 23/1/1998 of the Government if used wrong purposes or sale concessions in Vietnam will be market access submission of import tax was waived. Disclosure, access the import tax is done according to the instructions in circular No. 74 TC/TCT on October 20, 1997 of the Ministry of finance.
For cases enterprises are exempt from import tax of raw materials 5, as specified in point 3 article 10, Decree No. 10/1998/ND-CP, the slowest annual business in the first quarter to report the situation of imports and use of raw materials have been tax exempt with MOT and tax authorities directly managed the business. As for the number of imported raw materials duty-free business is not used up within 5 years from the date the business started to go into production or business using the wrong purpose will result import tax and statutory sanctions.
For cases of domestic businesses to import raw materials, materials production, processing machinery, equipment for enterprises, foreign-invested six months and after the end of the contract, enterprises must report to the Ministry of finance, Ministry of Commerce and the tax agency business management situation of importing and use of animals investors are exempted from import tax. As for the number of imported materials not used up if consumption in Vietnam allowed enterprises to import tax, filing declaration prescribed.
The tax Bureau of the province, the city is responsible for the examination and settlement of import situation and use of materials, raw materials duty free import of enterprises.
3. The time limit for submission of import duty for imported raw materials for export production Finance Ministry will have a private guide.
4. Prices charged import duty:

Enterprises have invested abroad when imported goods are imported taxable according to the invoice price of imported goods if the conditions specified in circular No. 82/1997/TT/BTC dated 11/11/1997 of the Ministry of finance.
For enterprises using tax rates to tax fraud, the business will be dealt with according to the provisions in item D circular 82/1997/TT/BTC mentioned above.
IV. OTHER PROVISIONS businesses have invested abroad is deducted in determining taxable income for the grants for activities for the purposes of charity, humanitarian organizations and individuals, Vietnam. Expenses are defined in point b15 section I part II circular No. 74 TC/TCT on October 20, 1997 of the Ministry of finance.
Business venture, 100% foreign owned business was transferred to the hole of any tax year to the next year and used the profits to offset next year but not exceeding 5 years from the 5 following years incurred losses. Enterprises registered the switch hole with tax, city tax management directly under the provisions of circular No. 74 TC/TCT on October 20, 1997 of the Ministry of finance.
 
C. TERMS of the IMPLEMENTATION of this circular are effective from the date of signing. The previous tutorial content differs from the content of this circular guides are no longer enforceable./.