G/SCM/Q2/VNM/4  
 
8 April 2015  
(15-1901)  Page: 1/4  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
REPLIES TO FOLLOW-UP QUESTIONS1 POSED BY UNITED STATES REGARDING  
THE NEW AND FULL NOTIFICATION OF VIET NAM2 
The following communication, dated 31 March 2015, is being circulated at the request of the 
Delegation of Viet Nam.  
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  General Questions 
 
Question 1  
In response to Question 2, with respect to Vietnam's plans to become current in meeting 
its subsidy notification obligation, Vietnam re plied that it "has started to prepare the 
notification for the subsequent period and w ill submit it to the WTO Secretariat at the 
soonest time". Can Vietnam prov ide a more certain schedule for submitting this subsidy 
notification?  Reply 
 Viet Nam is in process of finalization of this Notification and considers submitting it to the WTO by the next meeting of the Committee on Subsidies and Countervailing Measures. 
 
Question 2  
For the programs for which the duration was reported as ending in December 2007 and 
for which Vietnam recently clarified that such  date was the end of the reporting period 
and not an indication of the termination of the subsidy effective December 2007, please 
provide an update of the status of the subsid y. Specifically, please indicate the current 
status of the following programs: 
 Program 2: Support for the Implementation of Projects Manufacturing Priority 
Industrial Products  
Program 9: Other Preferential In vestment Credit for Development 
Program 13: Support for Shipbuilding Industry 
Program 14: Assistance for Commercial Development in Mountainous, Island, and 
Ethnic Minority Areas 
Program 16: Incentives for Investment Projects in Science and Technology 
 
Reply 
 
The update of the status of the subsidy will be co nsidered providing in the Subsidy Notification of 
Viet Nam during the period 2011-2013. 
 
                                               
1 G/SCM/Q2/VNM/3.   
2 G/SCM/N/155/VNM.   G/SCM/Q2/VNM/4 
 
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  Investment Incentives for Do mestic Exporting Enterprises 
 In response to Question 7, Vietnam stated that all investment incentives contingent 
upon export performance and local-content th at were granted to investment projects 
with investment certificates issued before  Vietnam's accession to the WTO, including 
projects that are granted a multi-year period extending beyond 2006, had been 
eliminated before 11 January 2012. 
 
Question 3  Vietnam has identified Investment  Law No. 59/2005/QH-11 and Decree 
No. 108/2006/ND-CP as the legal documents which eliminated the 
preferences/incentives previously available to exporters. The Law and Decree excerpts 
below appear to indicate that companies appr oved for and receiving incentives prior to 
the implementation of this Law and Decree, that would be adversely affected by the 
elimination of such incentives , are guaranteed to continue receiving such incentives on 
an ongoing basis. With specific reference to relevant portions of the Law and the Decree, 
please explain how this law and this decree accomplish the elimination of the incentives 
previously available for exporters.   Investment Law No. 59/2005/QH-11 
 
Article 11  Investment guarantees in th e event of changes in law or policies  
  
1. If a newly promulgated law or policy cont ains higher benefits and incentives than 
those to which the investor was previously enti tled, then the investor shall be entitled to 
the benefits and incentives in accordance with the new law as from the date the new 
law or policy takes effect.  
 2. If a newly promulgated law or policy advers ely affects the lawful benefits enjoyed by 
an investor prior to the date of effectiveness of such law or policy, the investor shall be 
guaranteed to enjoy incentives the same as the investment certificate or there shall be 
resolution by one, a number or all of the following methods:  
 
a. Continuation of enjoyment of benefits and incentives; 
b. There shall be a deduction of the loss from taxable income;  
c. There shall be a change of the oper ational objective of the project;  
d. Consideration shall be given to pa ying compensation in necessary 
circumstances.  
3. Based on the provisions of the laws an d commitments in international treaties of 
which the Socialist Republic of Vietnam is a member, the Government shall make 
specific provisions on guarantee for interests of investors in the case where a change in 
laws or policies affects adversel y the interests of the investors.  
 
Decree No. 108/2006/ND-CP 
 Article 20.- Right to investment guarant ee in case of changes in law and policy 
 
1. When a newly promulgated law or policy adversely affects legitimate interests to 
which investors are entitled before the new la w or policy takes effect, investors shall be 
guaranteed either entitlement to the preferen ces stated in their investment certificates 
or application of one or some of the following measures: 
 
a. Continued enjoyment of the existing rights and preferences; 
b. Deduction of losses from taxable income; 
c. Adjustment of the objectives of the project; G/SCM/Q2/VNM/4 
 
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  d. Consideration for compensation in some necessary cases. 
2. With regard to the measure of compensation referred to at Point d, Clause 1 of this 
Article, the investment certificate-granting ag ency shall submit to the Prime Minister for 
decision the guarantee of the investors' in terests upon any change in law or policy 
adversely affecting the invest or's legitimate interests. 
 Reply 
 According to Article 5 of the Law on Investment and Article 3 of Decree No.108/2006/ND-CP, in the event of any inconsistency between the domestic law and international treaties, the treaties shall prevail to the extent of the inconsistenc y. Pursuant to such provision, Viet Nam's 
commitment to the WTO will be applied regardless  of Article 11 of the Law on Investment and 
Article 20 of Decree No. 108/2006/ND-CP.  
Investment Incentives for Foreign-Invest ed Enterprises Contingent upon Export 
Performance  
In response to Question 10, Vietnam stated that all investment incentives contingent 
upon export performance and local-content th at were granted to investment projects 
with investment certificates issued before  Vietnam's accession to the WTO, including 
projects that are granted a multi-year period extending beyond 2006, had been 
eliminated before 11 January 2012. 
 Question 4 
 
With specific regard to the in centives provided under this program, please identify the 
measure, with specific reference to the rele vant sections, that effected the elimination 
before 11 January 2012 of preferential income  tax and import duty incentives contingent 
upon export performance that  were granted to investment  projects with investment 
certification before Vietnam's accession to the WTO, including projects that had been 
granted a multi-year period of benefits extending beyond 2006.  
 
Reply 
 
With regard to the above-mentioned incentives, th e legal enactments promulgated to nullify them 
are included:  
1. The Law on Investment 2005 dated 29 November 2005 superseding the Law on 
Domestic Investment Encouragement of 1998. According to Article 27 of this Law, corporate income tax and import duty incentives contingent upon export performance have been nullified. 
 
2. Decree No. 108/2006/ND-CP dated 22 Septem ber 2006 guiding the implementation of 
the Law on Investment eliminated the legal enactments on corporate income tax and 
import duty incentives contingent upon export performance, including: 
 
 Decree No.51/1999/ND-CP dated 8 July 1999 guiding the implementation of the 
revised Law on Domestic Investment Encouragement. 
 Decree No. 35/2002/ND-CP dated 29 March 2002 amending and supplementing 
Lists A, B and C which are annexed to Decree No. 51/1999/ND-CP. 
 The list of sectors and areas with investment incentives regulated by Decree 
No. 164/2003/ND-CP dated 22 December 2003 guiding the Law on Corporate 
Income Tax and Decree No.152/2004/ND-CP dated 6 August 2004 amending and supplementing Decree No. 164/2003/ND-CP. 
 The list of sectors and areas with investment incentives regulated by Decree 
No. 149/2005/ND-CP dated 8 December 2005 guiding the Law on Export and Import Duties. 
 
3. Decree No. 124/2008/ND-CP dated 11 Decemb er 2008 guiding the Law on Corporate 
Income Tax. Article 20 of this Decree eliminated the corporate income tax incentives G/SCM/Q2/VNM/4 
 
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  contingent on export performance in accordance with Viet Nam's commitments to the 
WTO. 
 Textile and Apparel Subsidies 
 
Question 5  
In response to Question 20 regarding Text ile and Apparel Subsidies, Vietnam replied 
that it "has not provided any subsidies cont ingent on export performance to textile and 
garment industry".   
With respect to Decision No. 36/2008/QD-TTg; Decision 42/2008/QD-BCT; and 
Decision 12/2011/QD-TTg, please identify any measures (laws, decisions, etc.) related 
to the implementation of these Decisions an d any support programs for the textile and 
garment industries established pursuant to these measures. 
 Reply 
 Recommendations and statements mentioned in these decisions aim to provide guidance and information to agencies, organizations and individuals, rather than any required obligations.   
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