CIRCULAR

REGULATIONS ON PROCESSES AND PROCEDURES FOR INCENTIVE CERTIFICATION AND VERIFICATION OF PROJECTS FOR MANUFACTURING OF SUPPORTING PRODUCTS ON THE LIST OF PRIORITIZED SUPPORTING PRODUCTS

Circular No. 55/2015/TT-BCT dated December 30, 2015 of the Minister of Industry and Trade, regulating processes and procedures for incentive certification and verification of projects for manufacturing of supporting products on the list of prioritized supporting products, entering into force from January 1, 2016, which is amended and supplemented by:

The Circular No. 42/2019/TT-BCT dated December 18, 2019 of the Minister of Industry and Trade, amending and supplementing several regulations on the periodical reporting regimes referred to in Circulars issued by the Minister of Industry and Trade or jointly issued, entering into force on February 5, 2020.

Pursuant to the Government's Decree No. 95/2011/ND-CP dated August 12, 2012, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Law No. 71/2014/QH13 dated November 26, 2014, amending and supplementing several articles of the Laws on Taxes;

Pursuant to the Government’s Decree No. 111/2015/ND-CP dated November 3, 2015 on development of the supporting industry;

Upon the request of the Director of the Department of Heavy Industry,[1]

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular prescribes processes and procedures for incentive certification and verification of projects for manufacturing of supporting products on the list of prioritized supporting products annexed to the Government’s Decree No. 111/2015/ND-CP dated November 3, 2015 on development of the supporting industry.

Article 2. Subjects of application

This Circular shall apply to entities and persons manufacturing supporting products on the list of prioritized supporting products within the territory of Vietnam.

Article 3. Interpretation

For the purposes of this Circular, terms used herein shall be construed as follows:

1. Supporting products mean products in the industries of materials, accessories, components and spare parts used for finished goods.

2. A competent authority means the agency taking charge of receipt and processing of incentive certification applications:

a) The competent authority of the Ministry of Industry and Trade: Vietnam Industry Agency2;

b) Competent authorities of provinces: regulatory authorities appointed by People's Committees of provinces under Article 15 of Decree No. 111/ND- CP on development of supporting industry dated November 03, 2015.

3. A new investment project for manufacturing of supporting products means:

a) The new project carried out for the first time or independent of the existing project;

b) Every existing project that is entitled to scope expansion, capacity enhancement, technological innovation in manufacture of supporting products using new devices and manufacturing processes with an increase in productivity by at least 20%.

4. Small and medium-sized enterprises (SMEs) mean every enterprise defined by laws on SMEs.

Article 4. Projects eligible for corporate income tax incentives

Every new investment project that is eligible for enterprise income tax incentives under regulations of laws No. 71/2014/QH13 amending and supplementing a number of articles of the Law on taxation dated November 23, 2014 shall manufacture supporting products that satisfy one of the following requirements:

a) The list of supporting products given priority in Vietnam that are manufactured before January 01, 2015 (Appendix 1 hereof) and granted a Certificate of Conformity to EU technical Regulations (standards promulgated by CEN - European Committee for Standardization) or equivalents (if any);

b) All supporting products on the List compiled on the Decree No. 111/2015/ND-CP on development of supporting industry dated November 03, 2015 of the Government but not included in Appendix 01 of this Circular.

Chapter II

PROCEDURES FOR INCENTIVE CERTIFICATION AND VERIFICATION

Article 5. Applications for procedures for incentive certification

1. Number of sets of application documents:

a) 06 copies: 01 original and 05 duplicates;

b) The application shall be sealed and the applicant's information shall be specified on the file folder;

c) Where changes in the project that affect the conditions for investment incentives, the applicant shall submit the competent authority an additional application in which the scope of changes includes.

2. Composition of submitted documents:

a) A written request for incentive certification (Appendix 2 hereof);

b) A Certificate of Enterprise Registration or Certificate of Business Registration;

c) A project interpretation:

- 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 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 of laws on investment and construction.

d) The decision on approval for environmental impact assessment (if new investment projects) or a commitment to environmental protection under the law on environmental protection or an as-built certificate, and environmental protective measures (if existing projects).

dd) A Certificate of conformity to EU technical regulations (standards promulgated by CEN - European Committee for Standardization) or the equivalent (if any) granted by certifying agencies that are permitted to exercise certification activities under regulations of laws on product quality.

3. Submission:

a) Every SME shall submit their application for the project for manufacturing of supporting products on the List to the competent authority where the project is located or the Ministry of Industry and Trade. Each SME must submit its application to only one competent authority;

b) Other types of businesses shall submit their applications to the Ministry of Industry and Trade (address: 54 Hai Ba Trung street, Hoan Kiem district, Hanoi).

4. Submission options:

Directly or online.

Article 6. Scope of project appraisal

1. The observance of regulations of the Decree No. 111/2015/ND-CP on development of supporting industry dated November 11, 2015 of the Government.

2. Legal requirements.

3. Project feasibility and rationality of technological-technical solutions that apply to the project.

4. Financial ability, and the effectiveness of the project.

5. The viability of the environmental protective measures.

Article 7. Authority to certify incentive

1. The competent authority of a local government where the project is located or the Ministry of Industry and Trade shall carry out the incentive certification of such project of SMEs.

2. The Ministry of Industry and Trade shall carry out the incentive certification of projects for manufacturing of supporting products that are invested by other type of businesses.

Article 8. Time limit for certification

1. Within five (05) working days, the competent authority shall examine the validity and completion of the application. In case of an incomplete or invalid application, the competent authority shall request the applicant to supplement his/her application in writing.

2. For a complete and valid application, within fifteen (15) working days, the competent authority shall appraise such application or carry out a site inspection, if necessary. The competent authority shall send a notification of the result of incentive certification to the applicant within thirty (30) working days.

Article 9. Verification and withdrawal of certificates of incentives

1. Procedures for verification:

a) Inspecting authorities:

- The Ministry of Industry and Trade shall take charge of and cooperate with relevant Ministries, Departments and agencies to carry out inspections of projects under incentives nationwide;

- The Departments of Industry and Trade of provinces shall take charge of and cooperate with relevant Ministries, Departments and agencies to inspect projects that benefit from incentives within their provinces.

b) Inspection forms:

Surprise inspection or periodic inspection, conducted by the Ministry of Industry and Trade or Departments of Industry and Trade at requests of the State management authority.

c) Inspection scope:

- Legal documentary inspection;

- Facility inspection;

- Inspection of incentives from which the project benefits;

- Project progress inspection;

- Inspection of supporting products of the project eligible for incentives.

The inspection shall be made in record. Any violations found shall be reported to the competent authority by the Inspectorate.

2. Withdrawal of certificates of incentives:

The certificate of incentives shall be withdrawn and the defaulting entity shall compensate for the granted incentives in the following cases:

a) The investor does not report changes in supporting products under incentives to the competent authority;

b) After 18 months from the date of incentive certification, there are no supporting products mentioned on the application for incentive certification;

c) Any case is petitioned by the inspectorate.

Chapter III

IMPLEMENTARY RESPONSIBILITIES AND ENTRY INTO FORCE

Article 10. Responsibilities of entities and persons3

Annually (before January 31 of the following year), organizations and individuals, after enjoying incentives, shall report in writing to the Ministry of Industry and Trade (Vietnam Industry Agency) via postal service or e-mail on the production and business situations of incentive-given products, using the form No. 01 in Appendix 4 to this Circular.

Article 11. Responsibilities of state regulatory authorities

1. Vietnam Industry Agency4 shall assume the following responsibilities:

a) Process applications and consult with Ministries, departments and relevant authorities (if any) on verification;

b) Inspect and instruct entities that manufacture supporting products on the list in the implementation of this Circular and relevant laws on manufacturing of supporting products;

c) Take charge of and cooperate with relevant Ministries, departments and agencies to carry out surprise and periodic inspections of projects provided with incentives.

2. The competent authority of local government where the project is located shall take charge of and cooperate with units under provinces to:

a) Process applications and consult with relevant departments on verification;

b) Inspect and instruct entities that manufacture supporting products on the list in the implementation of this Circular and relevant laws on manufacturing of supporting products;

c) Submit one original of the certificate of incentives to the Vietnam Industry Agency5 – Ministry of Industry and Trade, and 01 duplicate to the Department of Industry and Trade (if the Department of Industry and Trade is not the competent authority of local government where incentives are certified);

d) 6 Annually, a general report on incentive-given projects shall be sent to the Ministry of Industry and Trade (Vietnam Industry Agency) via postal service or email by completing the form No. 02 in Appendix 4 to this Circular.

3. The Departments of Industry and Trade of provinces shall take charge of and cooperate with relevant Ministries, Departments and agencies to inspect local incentive-given projects on a periodic or ad-hoc basis.

Article 12. Entry into force7

1. This Circular shall enter into force on January 1, 2016.

2. In the course of implementation hereof, if there is any difficulty or query that arises, entities and persons may send feedbacks to the Ministry of Industry and Trade to seek its proper amendment or supplementation./.