Incentives for economical and efficient water use activities in Vietnam

Incentives for economical and efficient water use activities in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is economical and efficient water use?

According to Clause 1, Article 3 of Decree 54/2015/ND-CP, economical and efficient water use means the application of measures and technologies to cyclic use and reuse of water, collection of rainwater, treatment of brackish or salt water into fresh water in order to use or in order to limit the amount of water used for manufacturing, business and daily-life activities.

2. Incentives for economical and efficient water use activities in Vietnam

Incentives for economical and efficient water use activities in Vietnam include:

(1) Incentives for reuse, cyclic use of water

Reuse, cyclic use of water in the cases provided for in Paragraph 1, Article 6 of Decree 54/2015/ND-CP shall be eligible for enjoyment of the following incentives:

- Borrowing incentive capital under the provisions of law on investment credit of the State

- Exemption or reduction of corporate income tax in accordance with regulations of law on taxation.

(Article 7 of Decree 54/2015/ND-CP)

(2) Incentives for production, import of water-saving products, equipment, technologies

- Investment in production of water-saving products, equipment, technologies prescribed in Point a, Paragraph 4 of Article 6 of Decree 54/2015/ND-CP shall be eligible for enjoyment of the following incentives:

+ Borrowing incentive capital under the provisions of law on investment credit of the State;

+ Exemption or reduction of corporate income tax for the incomes earned from the investment in production of water-saving product, equipment and technology in accordance with regulations of legislation on taxation.

- Import of water-saving products, equipment and advanced technologies specified in Clause 4 of Article 6 of Decree 54/2015/ND-CP shall be eligible for exemption or reduction of import tax in accordance with regulations of legislation on taxation.

(Article 8 of Decree 54/2015/ND-CP)

(3) Incentives for collection of rain water, desalination of brackish or salt water into fresh water for domestic use, application of technologies, techniques, methods of water-saving irrigation in agricultural production

Collection of rainwater, desalination of brackish or salt water into fresh water and application of technologies, techniques, methods of water-saving irrigation in agricultural production in the cases provided for in Paragraphs 2, 3 and 5 of Article 6 of Decree 54/2015/ND-CP are eligible for borrowing incentive capital under the provisions of law on investment credit of the State.

(Article 9 of Decree 54/2015/ND-CP)

3. Principles for enjoyment of incentives for economical and efficient water use activities in Vietnam

According to Article 4 of Decree 54/2015/ND-CP, principles for enjoyment of incentives for economical and efficient water use activities include:

- Organizations, households, individuals that conduct many economical, effective water use activities and are eligible for incentives shall enjoy incentives in proportion to such activities as prescribed in this Decree.

- If an economical, efficient water use activity is eligible for different incentive levels/ forms as prescribed by law, the organizations, households, individuals are allowed to choose the most beneficial form/ level.

- Investments in obsolete water-saving equipment, technologies shall be ineligible for enjoyment of incentives

4. Prohibited acts regarding economical and efficient water use activities in Vietnam

Prohibited acts regarding economical and efficient water use activities in Vietnam include:

- Acts of untruthful declaration, document forgery, fraud for enjoyment of incentives; use of incentives for improper purposes.

- Misusing of positions and powers in the implementation of the incentive policy for economical and efficient water use activities.

- Causing troubles or obstacles for organizations, households, individuals in enjoyment of incentives.

(Article 5 of Decree 54/2015/ND-CP)

Nguyen Thi Hoai Thuong

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