What Investment Incentives for Solar Energy Project?
The Vietnam government has stepped up to encourage investment in solar power plant and project, which is part of the effort to close the gap of energy growth demand versus supply, and support the sustainable energy development in Vietnam.
According to Decision No. 11/2017/QD-TTg issued on Apr 11th, 2017 to be effective from Jun 1st, 2017, organizations and individuals involved in the development of solar power projects are entitled to investment, tax and land incentives.
Specifically, organizations and individuals involved in the development of solar power projects can legally mobilize capital from domestic and foreign organizations and individuals to invest in the implementation of solar power projects in accordance with the provisions of current law.
Solar power projects are exempted from import duties on imported goods to create fixed assets for the project; complying with the current law on import tax and export tax on goods imported for production of projects which are raw materials, supplies and semi-finished products which cannot be produced at home.
The exemption and reduction of corporate income tax for solar power projects shall be implemented the same as for projects in the field of investment incentives in accordance with current tax law.
On land preference, the Decision stipulates that solar power projects, transmission lines and transformer stations for connecting to electricity grids shall be exempted from or reduce land use fees, land rents and water surface rents in accordance with current law applies to projects in the field of investment incentives.
Based on the planning approved by competent authorities, the provincial people’s committees create conditions for arranging land funds for investors to carry out solar power projects. The compensation and support for ground clearance shall be implemented in accordance with the current land legislation.
The decision also specifies that organizations and individuals investing in the construction of solar power projects have the responsibility to install solar power equipment must ensure the safety of structures and work safety in accordance with the current regulations.
The investment in the construction of solar power projects shall comply with the current law provisions on investment, construction, fire prevention and fighting, environmental protection and other relevant regulations.
The Vietnam laws on electricity will be changed to attract investment of the private sector, boosting the industrial development of the country, which is always hunger for power to develop.
In early 2017, Vietnam government has re-structured electricity sector with vision up to 2020. Accordingly, sustainable energy has been targeted to one of the growing sources in the coming future despite higher cost of development.
Vietnam has updated national power development plan up to 2020. Building more thermal power plant will still be the main driver for sources of energy in the future development although concerns have arisen for environmental control.
Due to short of capital, Vietnam has encouraged investment in the form of Public Private Partnership in Vietnam, especially in infrastructure, energy project.