Strengthening management of investment incentive projects when changing project owners

Recently, the General Department of Customs has received reports of difficulties from a number of provincial and municipal customs departments regarding the change of owners of investment incentive projects. According to the provisions of Clause 11, Article 16 of the Law on Import and Export Tax and Article 14 of Decree 134/2016/ND-CP, amended and supplemented by Clause 7, Article 1 of Decree 18/2021/ND-CP on tax exemption for imported goods to build fixed assets of subjects entitled to investment incentives; Clause 1, Article 41 of the Investment Law 2020 stipulates that during the implementation of an investment project, investors have the right to adjust the objectives, transfer a part or all of the investment project, merge projects or divide a project into some projects, use land use rights, assets on land belonging to the investment project to contribute capital to establish an enterprise, cooperate in business or other contents under the provisions of law.

Simulation image of Dien Bien Airport expansion investment project - Illustration photo.

To ensure strict management in accordance with regulations on subjects eligible for tax incentives, according to the General Department of Customs, for investment projects and investors that are adjusted according to regulations, tax policies will be implemented accordingly (if the conditions on subjects are still met).

Regarding the procedures and conditions for continuing to enjoy tax incentives when changing the project or project owner, Decree 134/2016/ND-CP is amended and supplemented in Decree 18/2021/ND-CP, which stipulates procedures for a number of cases such as: transferring investment incentive projects; moving imported goods exempted from import tax from investment incentive projects to other investment incentive projects (same project owner); there are no regulations for other cases of change of project owners that have been regulated by the law on enterprises and the law on investment, such as: transferring assets being imported goods to create fixed assets of investment incentive projects in the form of establishing enterprises, contributing capital to establish enterprises; dividing companies; separating companies; merging companies; consolidating companies; converting types...

Regarding the implementation responsibility of the Customs authority, in order to strengthen the management of preferential investment projects with changes in project owners, in addition to the regulations and procedures in Decree 134/2016/ND-CP, Decree 18/2021/ND-CP, Circular 38/2015/TT-BTC, Circular 39/2018/TT-BTC, the General Department of Customs requests the Customs Departments of provinces and cities, when receiving information about preferential investment projects in the management area with changes in project owners (from reports of the original project owners, information from state management agencies, other collected information sources), the Customs authority assigned management sends a document inviting the enterprise being the original project owner, the enterprise known to be the new project owner to work together, that is recorded in writing, in which: Clearly state the documents and records on the change of project owner (attached with copies of these documents, records for filing purposes); clearly state the Tax Exemption List and the list of customs declarations imported according to the Tax Exemption List; clearly state the content of the transfer of rights and obligations for the Tax Exemption List (part or all of the project; time of transfer, other agreements on rights and obligations arising in relation to the project); signature of the legal representative or authorized person as prescribed (of the original project owner and the new project owner).

At the same time, the new owner of project is required to fully perform the obligations prescribed by tax laws. This includes: the project owner is responsible for using the project's tax-exempt goods for the right purpose and reporting the situation of using tax-exempt goods in the fiscal year to the Customs authority that receives the Tax Exemption List as prescribed in Clause 7, Article 30, Clause 1, Article 31a of Decree 134/2016/ND-CP, amended and supplemented in Clause 13, Clause 15, Article 1 of Decree 18/2021/ND-CP.

In case the enterprise does not come to work according to the request letter or there are signs of violations or specific signs of risks, the customs units promptly conduct an inspection of the use of tax-exempt goods according to the provisions of Clause 4, Article 31a of Decree 134/2016/ND-CP, amended and supplemented in Clause 15, Article 1 of Decree 18/2021/ND-CP, collect and verify information at the project site, record in minutes, and apply other necessary inspection, supervision and control measures.

In addition, the General Department of Customs requires units to report cases of tax-exempt investment incentive projects with changes in project owners (except for cases specified in Clause 14, Article 1 of Decree 18/2021/ND-CP according to the attached appendix.