Bac Ninh seeks incentives for Samsung project

Bac Ninh Province is seeking Government approval to give investment incentives to an expansion project of Samsung Electronics Vietnam (SEV) in which its capital will rise to US$1.5 billion from the current US$670 million.The province has written to the Prime Minister suggesting incentives for the investment expansion of SEV in the Yen Phong Industrial Park.The South Korean investor submitted the same proposal to the Government at the end of last year, saying it wanted to enjoy a corporate income tax rate of 10% during the project’s lifetime, a four-year corporate income tax exemption and a 50% reduction of the tax for the following nine years for all electric and electronics products of the project.In fact, the prevalent rule stipulates investment incentives are not given to capital increase projects.According to Bac Ninh’s report, the expansion project of SEV might be mulled for corporate income tax incentives as this is a high-tech investor. The company asa high-tech investor has enjoyed a preferential income tax rate of 10% for 15 years, a tax exemption for four years and a 50% tax reduction for the following nine years after it reports taxable incomes.The province proposed the Government give the above special treatment to the expanded part of the project based o­n the post-check mechanism. This means the Ministry of Science and Technology, in collaboration with related agencies, will evaluate the high-tech criteria of the expansion scheme and revoke all incentives if it fails to meet the conditions during the implementation process.At the same time, the investment incentives set aside for the expansion will be adjusted as well.According to Bac Ninh, the investment project to establish the Samsung technology complex in Vietnam is an enormous scheme and it has been deployed in line with schedule and commitments with the Government. The firm as of end-2011 had disbursed US$492 million into the project, and plans to continue injecting another US$684.7 million as of late 2012.The project this year has created jobs for 23,000 locals and has total output capacity of 100 million products for the whole year, with sales estimated to amount to US$10 billion including an export value of US$9.5 billion