A business headquartered in Nga Bay City, Hau Giang Province, sent a question to the Tax Policy Department (Ministry of Finance).
Accordingly, the Company was established and operated in Hiep Thanh commune (Area III), Nga Bay city, Hau Giang province. During the period of operation, the enterprise is eligible and is applying a preferential tax rate of 10% along with a period of exemption and reduction according to Articles 15-16 of Decree 218/2013/ND-CP (4-year exemption period, reduction of 50% in the next 9 years).
From July 1, 2025, according to Resolution 1668/NQ-UBTVQH15, Hiep Thanh commune will be merged into Nga Bay ward (new administrative unit). Therefore, the name and level of administrative units have changed from "commune" to "ward", and the new area is not currently listed in the Supplement of Preferential Areas of Decree 218/2013/ND-CP. III.
The company recommends that the Ministry of Finance provide guidance on a number of issues as follows:
- Determine the area: After the merger, will Nga Bay ward still be classified as "area with particularly difficult socio-economic conditions" to continue applying incentives according to Point a, Clause 1, Article 15 of Decree 218/2013/ND-CP?
- Maintain incentives: In case Nga Bay ward is no longer in a " posecting special difficulties" area, will the Company continue to enjoy corporate income tax incentives (taxes and exemption and reduction periods) for the remaining incentive period according to Clause 10, Article 1 of Decree 12/2015/ND-CP or need to carry out adjustment procedures?
- What documents should businesses submit for approval by the tax authority?
Regarding this issue, the Ministry of Finance responded as follows:
"1. On determining investment incentive areas
1.1. For investment projects that have been approved for investment policy/issuance of Investment Registration Certificate:
Article 13 of the Law on Investment, Article 4 of Decree No. 31/2021/ND-CP dated March 26, 2021 detailing and guiding the implementation of a number of articles of the Law on Investment have stipulated on ensuring investment incentives in case of law changes.
Accordingly, the guaranteed investment incentives include: "Investment incentives are stipulated in the Investment License, Business License, Investment Preferential Certificate, Investment Certificate, Investment Registration Certificate or other documents issued by competent authorities or competent state agencies, applicable according to the provisions of law. In particular, the investment incentive content includes the form of investment incentives based on the investment location identified in the policy approval decision and the Investment Registration Certificate.
Therefore, based on the above regulations, in case the new administrative unit is established by competent authorities due to the arrangement and adjustment of boundaries, it is recommended to continue applying incentives related to the investment incentive area identified in the Decision approving the investment policy and the issued Investment Registration Certificate".
2. Regarding investment project adjustment
The Investment Law (Article 501) and Decree No. 31/2021/ND-CP (Article 4, Chapter IV) do not stipulate the adjustment of investment projects in case of changes in administrative boundaries. According to the principles stipulated in Article 13 of the Law on Investment and Article 4 of Decree No. 31/2021/ND-CP, projects that have been granted investment policy decisions/Investment registration certificates continue to implement according to this document.
In case the investor needs to adjust the investment project, it is recommended to implement according to the following regulations:
For projects that have been approved for investment, the project adjustment is implemented according to the principles prescribed in Clause 3, Article 41 of the Investment Law and Section 4, Chapter IV of Decree No. 31/2021/ND-CP depending on the adjustment content.
For projects implemented under the Investment Registration Certificate, the adjustment of the content of the Investment Registration Certificate shall comply with the provisions of Articles 39 and 39, Clause 2, Article 41 of the Law on Investment and Article 47 of Decree No. 31/2021/ND-CP.
Based on the above regulations, it is recommended that taxpayers comply with the provisions of Article 13 of the Law on Investment, Article 4 of Decree No. 31/2021/ND-CP dated March 26, 2021 of the Government.
