Samsung Vietnam gets sweet tax cut deal

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Samsung Electronics Vietnam has received what the Vietnamese government has called the "best deal" in tax breaks for its investments in the country.

Local media reported that the deal was struck in mid-September, nearly one year after the company began seeking incentives for expanding facilities and developing advanced technology at its plant in the northern province of Bac Ninh.

The factory produces hi-tech devices including mobile phones and tablets.

The company last year sought tax incentives for the expansion project of its existing plant. It had already had the same preferential treatment for the existing plant. Current investment regulations in Vietnam rule out incentives for expanding existitng projects.

Samsung Electronics Vietnam, which is expected to make up 10 percent of Vietnam's export turnover this year, will be offered a corporate tax rate of 10 percent "during the time the project is carried out" for expansion project at its plant in the Yen Phong Industrial Zone, compared to 25 percent for most companies.

In addition, the South Korean electronics maker will also get corporate income tax exemption in the first four years of operation and half tax payment for all of its business activities for nine following years, the Dau Tu Newspaper reported on Monday.

Last month, Samsung Vietnam had announced in a statement after meeting with the Minister of Finance that it would increase the capital for its first plant, the second largest of Samsung's mobile phone factories worldwide.

The capital will be US$1.5 billion for 2015-2020 from the original $670 million in 2008.

Samsung expects export revenues of about $10 billion this year, 40 percent higher than last year, according to the Finance Ministry's website.

Government statistics released in late September showed that foreign invested enterprises earned export revenues of $52.48 billion in the first nine months of 2012, up 34.6 percent from the same period last year. This accounted for 62.64 percent of Vietnam's total exports.

As of September 20, Vietnam had attracted $9.5 billion in foreign direct investments this year, according to the Foreign Investment Agency. South Korea was ranked third among 52 investors with $711.2 million.

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