OFFICIAL LETTER NO. 686/CT-CS PROVIDING GUIDANCE ON CORPORATE INCOME TAX INCENTIVES IN CASES OF INVESTMENT PROJECT ADJUSTMENTS STILL IN THE INVESTMENT PHASE

On April 18, 2025, the Tax Department issued Official Letter No. 686/CT-CS regarding corporate income tax (CIT) incentives in cases of investment project adjustments still within the investment phase. Specifically:

• If an enterprise adjusts its Investment Registration Certificate (IRC) to implement an expansion project for an ongoing investment project in a preferential sector or location, CIT incentives will only apply when one of the following three criteria is met: an increase in the original cost of fixed assets, an increased proportion of original cost of fixed assets, or an increase in designed capacity, as stipulated in Decree No. 218/2013/NĐ-CP dated December 26, 2013, detailing and guiding the implementation of the Law on Corporate Income Tax.
• However, if the IRC adjustment is to add new business sectors while the original project is still in the investment stage and has not yet generated revenue, the enterprise will continue to enjoy the tax incentives applied to the initial investment project for the remaining incentive period—provided that the changes do not affect the eligibility conditions of the original incentive project. This includes the possibility of upgrading and expanding production lines to meet incentive conditions, even without increasing investment capital.

↪ Accordingly, in the case of Halla Vina’s investment project, for which the initial investment certificate was issued on December 30, 2015, with the objective of producing mobile phone components and auto parts, implemented in the Đình Vũ – Cát Hải Economic Zone, Hải Phòng City. Later, the company adjusted its investment certificate to add the manufacture of washing machine parts, TV components, and motorcycle parts within the project’s scale, prior to the commencement of business operations (with no increase in investment capital, no change in project location, and no change in preferential area). If these adjustments do not affect the satisfaction of the original project’s incentive conditions, the company shall continue to enjoy tax incentives for the remaining period, provided it complies with the prescribed incentive conditions.