Vietnam: Draft decree on establishment, management, and use of investment support fund

The government published a draft decree to support, encourage and attract strategic investments in certain priority sectors.

Draft decree on establishment, management, and use of investment support fund

Article Posted date 12 January 2024

Following Resolution No. 110/2023/QH15—in the context of Vietnam adopting the Pillar Two global minimum tax rules from 1 January 2024—the government published a draft decree on the establishment, management, and use of an investment fund to support, encourage and attract strategic investments in certain priority sectors.

Highlights of the draft decree include the following:

  • The investment support fund aims to support, encourage, and attract strategic investments in certain priority sectors to Vietnam under government authorization.
  • The funds would be generated from state budget collections from the Pillar Two global minimum tax rules.
  • The support would be in cash, fully exempt from corporate income tax, and would be provided for five specific categories of:
    • Training and human resource development
    • Research and development (R&D) expenses
    • Investment in fixed assets
    • High-tech product manufacturing expenses
    • Social infrastructure system
  • The support payment would be granted upon the request of eligible entities, which are subject to review and approval procedures involving various authorities and the Prime Minister’s final decision.
  • The fund would provide support to eligible taxpayers.
  • Within three years from the date of investment registration certificate or from the approval date for investment policy, eligible entities must disburse its minimum investment amount of VND1.5 trillion.
  • The support payment would be subject to the actual expenses of the taxpayers and be paid at a certain ratio.
  • In case the requested support payments from taxpayers are higher than the budge payment of the fund, the support payment may be reduced, which is assessed based on certain criteria such as the entity’s economic and social contributions, state budge contributions, etc.

The draft decree is open for public consultation now.

Read a January 2024 report [PDF 142 KB] prepared by the KPMG member firm in Vietnam

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.