VietNamNet Bridge - Samsung Electronics Vietnam, the foreign investor which many economists say has been “overindulged in’ by Vietnamese state management agencies, has once again asked for tax incentives.

According to the Ministry of Finance (MOF), Samsung has asked for preferences in corporate income tax. It wants a 10 percent preferential tax rate for 30 years for ongoing projects.

As for an investment project in Bac Ninh province, Samsung Vietnam has asked for the preferential tax rate of 10 percent for the life of the project, a 4-year tax exemption and 50 percent tax cut in the next nine years.

In reply, MOF said the requested tax incentives will go beyond the tax incentives frame set by the government of Vietnam.

An MOF official cited  current laws as saying that in some cases, investors can ask for the extension of the preferential tax application, provided that they can satisfy some requirements: their products have high competitiveness worldwide; their revenue is VND20 trillion a year or higher which must be obtained five years since the day they have revenue at the latest; and employ more than 6,000 regular workers.

The extension must be decided by the Prime Minister. In all cases, the extended time must not be longer than 15 years.

As such, the official said, the laws do not mention the possibility of offering the 10 percent preferential tax rate for the life of any projects.

Regarding Samsung’s request on the 50 percent tax cut for additional three years, MOF explained that since these projects are listed as both large-scale and high-technology projects, the Prime Minister said additional preferences would be submitted by the provincial people’s committee to the provincial people’s council for approval within its competence.

However, MOF said this goes beyond the framework stipulated in the currently applied Corporate Income Tax Law. 

Therefore, if Samsung wants to enjoy preferences as a large-scale project instead of high-technology projects, it will have to report to the Prime Minister who will release instructions for local authorities.

Analysts commented that Samsung, as a big investor, enjoys too many favors from the government.

The highest possible investment incentives have been offered to the investor. Recently, the Civil Aviation Authority of Vietnam (CAAV) agreed to reserve a special terminal at  Noi Bai International Airport to serve Samsung’s import/export activities.

Besides the investment incentives offered by the government, the Bac Ninh provincial authorities have also offered a 50 percent tax reduction to three Samsung subsidiaries. The province has spent a lot of money to clear land to allocate to Samsung.

Dat Viet