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Decree 57 on favourable CIT provisions applied to supporting industry projects.

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Decree 57 on favourable cit provisions applied to supporting industry projects

Decree No. 57/2021/ND-CP issued on 4th of June 2021 took immediate effect and supplements Article 20, point 2, of Decree No. 218/2013/ND-CP and covers favourable CIT provisions applied to supporting industry projects, under certain conditions.

In this article, we cover the provisions of Decree 57 and provide insights on the key conditions required to benefit from favourable CIT rates, list of prioritized supporting products and industries.

The supporting industry covers manufacturing of materials, accessories, components and spare parts used for assembling finished goods. Supporting industry projects are investment projects in Vietnam which cover the business scope of manufacturing supporting products (Decree 111/2015).

Companies with prioritized supporting industry projects in Vietnam – including new or expanded projects – that meet the following 3 conditions are entitled to a favourable CIT rate:

  • Manufacture products contained in the ‘List of prioritized supporting products’ (the List of prioritized supporting products is included in the Appendix of Decree 111/2015) preferable for development and implementation before 1 January 2015
  • Meet the conditions of Supporting Production Project as outlined in Law No. 71/2014/QH13, and
  • Have been issued with a ‘Certificate of Production of Supporting Products’

Favourable CIT provisions:

  • Companies which operate supporting industry projects but have not benefited from favourable CIT will be entitled to the favourable rate for the tax period for which they were issued with a Certificate of Production of Supporting Products
  • Companies with supporting industry project which currently benefit from favourable CIT for reasons other than supporting production, will be entitled to favourable CIT for the remaining period, calculated from the tax period in which the companies were issued with the Certificate of Production of Supporting Products
  • Companies with supporting industry project which have benefitted from favourable CIT for reasons other than auxiliary production shall be entitled to favourable CIT for the remaining period, calculated from the tax period during which the enterprise was issued with the Certificate of Production of Supporting Products

*Specific details of favourable CIT rates are outlined in the Corporate Income Tax law. In addition to favourable CIT, entitled companies may benefit from additional incentives such as: import tax, credit limits, loan interest etc.

Application process for favourable CIT rates and incentives

The details covering the application for tax incentives are included in Circular 55/2015/TT-BCT: Article 5 – Applications for procedures for incentive certification. The requested documents for the application are:

  • A written request for incentive certification;
  • A Certificate of Enterprise Registration or Certificate of Business Registration;
  • A description of the project:

With respect to a first-time project or an independent project: a proposal for project investment under the current regulations of laws on investment and construction;

With respect to an existing project:

    • A description of the current status of its manufacturing process, facilities (plants), machines and equipment ( a list of machines and its capacity, specialized equipment; measuring and quality control devices); the project’s capacity; the latest annual internal audit report (or an annual financial statement);
    • A description of investment in scope expansion, technical innovation using new devices and manufacturing processes with an increase in productivity by at least 20% under the current regulations covering the laws on investment and construction.
  • The decision on approval for environmental impact assessment (for new investment project) or a commitment to environmental protection under the law on environmental protection or an as-built certificate, and environmental protective measures (for existing project).
  • A Certificate of conformity to EU technical regulations (standards promulgated by CEN – European Committee for Standardization) or equivalent (if any) granted by certifying agencies that are permitted to exercise certification activities under laws and regulations on product quality

List of prioritized supporting products (According to the Appendix of Decree 111/2015)

Textile and garment industry:

  • Natural fiber: cotton, silk, jute, hemp fiber
  • Synthetic fiber: PE, Viscose; and others

Footwear – leather industry:

  • Leather
  • Leatherette, and others

Electronics industry:

  • Basic electronics – optoelectronics components; transistors, integrated circuits, sensors , resistors , capacitors , diodes , antennas , thyristors
  • Quartz components
  • Cell phone battery chargers
  • Screens, and others

Automobile industry:

  • Engine and engine components: piston, crankshaft, connecting rod, gear, exhaust , cylinder, cylinder head assembly kits , camshaft , rings, engine valves
  • Lubrication system: oil filters, coolers, radiators, oil pumps and valves
  • Cooling system: radiators, thermostat valves, water pumps, air cooling fans, an others

Mechanical fabrication industry:

  • Moulds, fixtures: processing fixtures, testing fixtures, stamping moulds, casting moulds
  • Tools – cutters: drill, turning cutters, milling cutters, and others

Supporting products used in hi-tech industry:

  • Types of mould: high precision moulds, high precision mould for plastic casting;
  • High standard mechanical parts: types of nuts, bolts, screws and high – precision equipment used in electronics, mechanical electronic parts, medical electronics, industrial robots, and others.


Decree 57 took immediate effect on 4th of June 2021 and is significant because it provides clear details on the application process and the documentation requirements, so that investors can access the special CIT provisions with priority for certain industries. We recommend investors to peruse its provisions and assess if they are entitled to preferential or favourable CIT rates.

Updated on June 17, 2021

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