Lower Rent for Manufacturers and Environmental Tax Exemptions

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By Lorenzo Martelli

Manufacturers benefit from lower rent
Dec. 7 – On November 23, the Vietnamese Government issued Decision No. 2093/QD-TTg to reduce businesses’ land use rental costs for 2011 and 2012. A 50 percent reduction in rentals for leased land will be enjoyed by firms conducting manufacturing businesses. According to calculations, under Decree No. 121/2010/ND-CP, the rental fee is paid annually. However, reductions can be applied under some circumstances only. The land rent charge is reduced when such entities:

  • Have the proper and lawful use of the leased land;
  • Have been subject to statutory increases in land rent charges at least twice in 2010.

Moreover, the reduced land rent fee cannot be lower than that one in 2010.

The decision takes effect immediately.

Exemptions granted from environmental taxes
On November 11, Circular No 152/2011/TT-BTC has been issued by the Ministry of Finance, providing clarifications about a few of points within the Law on the Environmental Protection Tax and Government Decree No 67/2011/ND-CP of August 8, 2011.

According to Circular 152, goods which are not defined in Article 3 of the Law on the Environmental Protection Tax, Article 2 of Decree No. 67 and Article 1 of Circular 152 are not subject to environmental protection taxes. That is subject to at least one of the following conditions:

  • Such goods are transported from the exporting country to importing country through a border gate of Vietnam and transited through the border gate (including goods brought into bonded warehouses) without undergoing import procedures into Vietnam or export procedures out of Vietnam;
  • Such goods are transited through a border gate of Vietnam on the basis of the agreements signed between the Government of Vietnam and foreign governments, or between agencies or representatives authorized by the government of Vietnam and foreign governments under provisions of law;
  • Such goods temporarily imported for re-export are within the time limit as prescribed by law;
  • Such goods are exported abroad by manufacturers or processors or their licensees, except for organizations, households and individuals purchasing goods subject to environmental tax in order to export them.

Finally, organizations and individuals producing and trading in petroleum products will not have to pay environmental protection taxes for gasoline which was declared prior to January 1, 2012.

The Circular takes effect on January, 1 2012.

Dezan Shira & Associates is boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in Vietnam. To contact the firm, please email vietnam@dezshira.com, visit www.dezshira.com, or download the firm’s brochure here.

For business enquiries, please contact us as at Vietnam@dezshira.com

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