Samsung breaks ground of a CE complex in Ho Chi Minh City. (Photo: Zing.vn)
Samsung Electronics Vietnam (SEV) in August asked for a corporate income tax (CIT) rate of 10% during 30 years for its projects that are already in place.
In addition, it requested a 10% tax rate during the whole life of an investment project in the northern province of Bac Ninh, tax exemption in four years and tax reduction of 50% in the following nine years.
Vietnam currently applies a CIT rate of 22% in general and a 20% rate for companies that have total annual sales less than 20 billion dong. The CIT rate is poised to be cut to as low as 20% next year.
The ministry, however, said that Samsung’s proposal does not match the current legislation.
The prime minister could grant tax incentives for some projects if they meet certain prerequisites such as products with world competitiveness, earning sales of more than 20 trillion ($889 million) per year after five years once the project started to generate turnover and employing an average permanent number of over 6,000 workers, according to the ministry.
The prime minister would decide the projects eligible for a tax rate of 10% with the maximum period of 15 years.
Samsung has invested in five mega-projects in Vietnam with a combined investment capital of over $14.3 billion. Its exports make up a large part of the whole country’s export turnover.
The export value of SEV is likely to reach $30 billion by the end of 2015, rising from $26.5 billion in 2014 and $1.5 billion in 2010.