Dung Quat oil refinery enjoys preferential CIT
08:42' 11/06/2006 (GMT+7)
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The ground-breaking ceremony of Dung Quat Oil Refinery.
VietNamNet – The Ministry of Finance (MoF) has released circular 50, stipulating the preferential corporate income tax (CIT) and import tax to be applied to the Dung Quat oil refinery.
Dung Quat oil refinery will enjoy a preferential CIT rate of 10% for 15 years from the day it officially begins operation. The oil refinery will also be exempt from CIT for the four years from its first taxable income. It will also be able to enjoy a 50% reduction in CIT over the next nine years. The oil refinery’s income will be entered into separate accounts from the Vietnam National Petroleum Corporation (PetroVietnam).
The import tax exemption will be applied to the goods used to construct and maintain the oil refinery. This includes imported equipment and machinery, means of transport and associated accessories. In addition, the materials used to manufacturing the construction tools that cannot be made domestically will also enjoy a tax exemption. Importers will have to undertake to use the imported goods for the declared purposes.
The construction of Dung Quat Oil Refinery began in November 2005, and it is expected to begin operating at the end of 2008, or in early 2009.
The project has a total investment capital of $2.5bil, which includes the Dung Quat Oil Refinery covering an area of 110 ha, an 85.83 ha crude oil and products container, an oil pipeline, a 94.46 ha sea water supply and drainage system, ports, and a series of supporting works.
The Dung Quat refinery has been in planning since January 1998. It has been plagued by a series of delays, three times involving the withdrawal of foreign oil companies involved in the project. But ground was finally broken on the $2.5 billion project on November 28, 2005.