In recent years, the Vietnamese government has implemented various incentive policies to support the development of the supporting industry, aiming to enhance domestic production capabilities and reduce reliance on foreign supply sources. These incentives particularly focus on supporting products for the high-tech industry. This article provides a specific analysis of tax incentives, production situations, and measures to promote the development of supporting industrial products for the high-tech industry in Vietnam.
1. Overview of the Supporting Industry Situation in Vietnam
According to statistics, as of 2020, Vietnam had approximately 1,000 businesses operating in the supporting industry. However, the majority of these businesses primarily produced simple and low-tech supporting industrial products. The share of supporting industrial products for the high-tech industry was very small and mainly imported from foreign countries. According to data from the General Statistics Office, only about 5-7% of the demand for components and parts for high-tech industrial production is supplied domestically. The main reasons for this are the lack of capital, technology, and skilled labor in Vietnamese enterprises, as well as existing shortcomings in support and incentive policies.
2. Solutions to Promote the Supporting Industry
To promote the development of the supporting industry in general and the production of high-quality supporting industrial products for the high-tech industry in particular, it is essential to focus on the following solutions:
- Improve the investment and business environment: This includes reducing administrative procedures and shortening the investment licensing process. It also involves reforming tax and customs procedures.
- Support businesses in accessing technology: Encourage enterprises to invest in research and development, as well as technology transfer from foreign sources. Provide support for training a high-quality workforce.
- Provide financial support: Offer preferential loans and promote public-private partnerships for the development of the supporting industry.
- Tax and fee incentives: Reduce corporate income tax, import taxes on components and machinery used in production, and land usage fees.
- Establish supporting industrial parks and clusters: Concentrate businesses in the same industry to facilitate mutual support and collaboration.
These measures are aimed at boosting the growth of the supporting industry and increasing the domestic production of high-tech industrial components and products.
3. Tax Incentives for Industrial Support Products
Currently, the government has tax incentive policies for enterprises producing industrial support products as follows:
- Corporate income tax rate is 10% for the first 15 years for enterprises engaged in priority development of industrial support product manufacturing.
- Import duties are waived for machinery and equipment imported to create fixed assets for investment projects in industrial support product manufacturing.
- A 50% reduction in corporate income tax is applied to profits from technology transfer in the production of industrial support products.
These tax incentive policies have contributed to promoting investment in the supporting industry. However, it is necessary to expand the list of priority products, especially high-tech industrial support products.
For more information, you can refer to the article:
How to Submit an Application for Confirmation of Tax Incentives for Industrial Support Products.
4. List of Tax Incentives for Industrial Support Products in High-Tech Industries
Key industrial support products for high-tech industries that enjoy tax incentives include:
1. Precision molds: High-precision molds, high-precision plastic injection molds.
2. High-quality standard mechanical parts: High-precision screws, bolts, and nuts used in electronics, electromechanics, medical electronics, and industrial robotics.
3. Electronic components, electronic circuit boards for developing devices: Peripherals, computers, consumer electronics, audiovisual equipment, solar-powered devices; various microprocessors; control units (programmable logic controllers, CNC controllers, etc.).
4. Assemblies and components for power generation from new and renewable energy sources.
5. High-quality plastic components: Precision transmission components, high-strength, high-temperature, and wear-resistant plastic components.
6. Various types of sensors: Gas sensors, acceleration sensors, magnetic sensors; biological sensors, temperature sensors, humidity sensors, light sensors, pressure sensors, and more.
7. Next-generation motors: Electric motors, induction motors, servo motors (stepper motors), reluctance motors, linear motors.
8. High-precision mechanical assemblies.
To promote the development of these products, there is a need for strong, comprehensive policies related to taxes, capital, land, and labor to attract investment. Additionally, encouraging partnerships between domestic businesses and foreign direct investment (FDI) companies for technology transfer is crucial.
For more information, you can refer to the article: "List of Products Eligible for Industrial Support Incentives."
5. Conclusion
The production of high-quality industrial support products is a prerequisite for the development of high-tech industries in Vietnam. The government needs a comprehensive and practical strategy and policy to promote investment, technology transfer, and the development of human resources in this critical area. This will be a determining factor in enhancing the competitive capacity of Vietnamese industrial products in the era of digital technology.
However, there are still many challenges for businesses related to issues such as product codes eligible for incentives when submitting documents to the Ministry of Industry and Trade. Many companies also face difficulties in determining whether they meet the requirements for preferential corporate income tax. If you need guidance, you can contact the experts at Tam Viet Tax!
We are confident that, with many years of experience, we have successfully assisted dozens of Vietnamese and foreign businesses, including those from Japan, South Korea, Taiwan, and China, in enjoying tax incentives and receiving tax refunds as quickly as possible. 100% of our customers are satisfied with the services of Tam Viet Tax and are ready to recommend us to other partners.
Contact our business support and advisory hotline : 0911.95.8838
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