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.
January 12, 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