Investing in Vietnam's Border-Gate Economic Zones: Tax Incentives

“Investing in a border-gate economic zone earns a 4-year tax holiday and a 50% PIT reduction for employees” — if you read that in an old article, be careful: the dedicated financial mechanism for border-gate economic zones (Decision 72/2013/QD-TTg) expired on 01/3/2018 with no replacement, and the 50% PIT reduction for zone workers was also abolished in 2018. So in 2026, what tax incentives remain for investing in a border-gate economic zone (BGEZ)? This article maps the four groups of incentives still in force, with their conditions.

Warning: don’t trust old articles
Group 1 — CIT incentives: 10%/15 years + 4-year holiday + 9-year 50% reduction (conditional)
Group 2 — Import duty exemption: fixed-asset goods + 5-year materials
Group 3 — VAT: non-tariff areas inside BGEZs
Group 4 — General investment incentives under the 2025 Investment Law
Transitional rules for existing projects
Practical process for confirming incentive eligibility
Frequently asked questions
Sources

1. Warning: don’t trust old articles

Two “legal corpses” are still cited as current law in many old articles:

Decision 72/2013/QD-TTg (dedicated financial mechanism for border-gate economic zones) expired on 01/3/2018, repealed by Decision 01/2018/QD-TTg — with no replacement to date. This is a policy gap investors must understand: there is no longer a single unified incentive “package” for all BGEZs;
The 50% PIT reduction for individuals working in economic zones (formerly in Decree 29/2008/ND-CP) was abolished when Decree 82/2018/ND-CP took effect (10/7/2018); its guiding Circular 128/2014/TT-BTC was repealed by Circular 42/2019/TT-BTC.

Separately, Decree 28/2022/ND-CP is sometimes wrongly attached to BGEZs — it actually governs preferential credit policies for ethnic-minority regions and has nothing to do with BGEZ tax incentives.

2. Group 1 — CIT incentives: 10%/15 years + 4-year holiday + 9-year 50% reduction (conditional)

Under Article 12.3 of CIT Law 67/2025/QH15 (effective 01/10/2025, applicable to tax year 2025), CIT incentive locations include areas with especially difficult socio-economic conditions, difficult areas, and economic zones, high-tech zones, high-tech agricultural zones and concentrated digital-technology zones.

For a new investment project in an economic zone located in a CIT incentive area, Decree 320/2025/ND-CP details the incentive levels:

Preferential 10% rate for 15 years;
4-year tax holiday, then a 50% reduction of tax payable for the next 9 years.

Where the economic zone is not in a CIT incentive area, the lower tier applies: 17% for 10 years, a 2-year holiday, and a 50% reduction for the next 4 years.

The key point: not every BGEZ automatically enjoys the 10% rate. Two conditions must both be met: (1) it must be a new investment project; and (2) the economic zone must lie in a tax incentive area per the Government’s list. Investors must check the official area list — do not attach a specific BGEZ name to an incentive level without consulting it.

3. Group 2 — Import duty exemption: fixed-asset goods + 5-year materials

Under the Law on Export and Import Duties 107/2016/QH13 and Decree 134/2016/ND-CP (in force; amended by Decrees 18/2021/ND-CP and 182/2025/ND-CP):

Article 14, Decree 134/2016 (per Article 16.11, Law 107/2016): import duty exemption for goods imported to create fixed assets of investment-incentive beneficiaries — machinery, equipment, specialized transport means in technological lines, and construction materials not yet domestically producible;
Article 15, Decree 134/2016 (per Article 16.13): import duty exemption for raw materials, supplies and components not yet domestically producible for 05 years from the start of production.

This group is worth a great deal in practice for manufacturing projects in BGEZs — especially in the initial investment phase when most machinery and equipment must be imported.

4. Group 3 — VAT: non-tariff areas inside BGEZs

Under VAT Law 48/2024/QH15 and Decree 181/2025/ND-CP:

Goods and services brought from abroad into a non-tariff area; trade between foreign parties and non-tariff areas and among non-tariff areas → not subject to VAT (Article 5, VAT Law; Article 4.12, Decree 181/2025);
Domestic goods sold into a non-tariff area for production and export → 0% VAT (Article 9.1, VAT Law; Articles 17–18, Decree 181/2025).

Important: a non-tariff area is only a part of a BGEZ, not the whole zone. A company inside the BGEZ but outside the non-tariff area does not automatically enjoy this VAT regime.

5. Group 4 — General investment incentives under the 2025 Investment Law

Beyond the three tax groups above, BGEZ projects enjoy general investment incentives under the Investment Law 143/2025/QH15 (effective 01/3/2026; replacing Investment Law 61/2020/QH14) and its guiding Decree 96/2026/ND-CP — covering tax, land rental and other investment support depending on industry and location.

On specific land-rental exemption/reduction levels: the land legislation has its own rules; when preparing a project, investors should seek written confirmation from the competent authority rather than inferring.

6. Transitional rules for existing projects

Projects enjoying incentives under Decision 72/2013/QD-TTg when it expired may continue for the remaining period as granted. Where new legislation provides a higher incentive level, the project may opt for the higher level for the remaining period — investors should review to avoid missing entitlements.

7. Practical process for confirming incentive eligibility

Check the location: consult the Government’s incentive-area list to see whether the economic zone qualifies for the top CIT tier;
Check the industry: match the project’s industry against the incentivized industry list;
Confirm “new investment project” status: expansions or mergers may not qualify as “new” — assess case by case;
Incentive certification procedures: follow Investment Law 143/2025/QH15 and its guidance; keep complete proof of eligibility for later inspection.

8. Frequently asked questions

Do all border-gate economic zones enjoy the 10% CIT rate?
No. Only new investment projects in economic zones located in tax incentive areas enjoy 10% for 15 years with a 4-year holiday and 50% reduction for the next 9 years. Zones outside incentive areas get 17%/10 years + 2-year holiday + 50% reduction for 4 years.

Is Decision 72/2013/QD-TTg still in force?
No. It expired on 01/3/2018 (repealed by Decision 01/2018/QD-TTg) with no replacement. Projects enjoying it may continue for the remaining period.

Do employees working in a border-gate economic zone get a 50% PIT reduction?
No. That incentive was abolished in 2018 (when Decree 82/2018/ND-CP took effect).

Is imported machinery for building a factory in a BGEZ exempt from import duty?
Yes, if the project qualifies for investment incentives: duty-free import of fixed-asset goods (Article 14, Decree 134/2016) and duty-free import of not-yet-domestically-producible materials for 05 years from the start of production (Article 15).

Does a company in a BGEZ but outside the non-tariff area enjoy 0% VAT?
Not automatically. The 0%/VAT-exempt regime applies only to dealings with the non-tariff area — which is just a part of the BGEZ.

9. Sources

CIT Law 67/2025/QH15 — effective 01/10/2025, applicable to tax year 2025: Article 12.3 (CIT incentive areas including economic zones);
Decree 320/2025/ND-CP — effective 15/12/2025: detailed CIT incentive levels (10%/15 years + 4-year holiday + 50% reduction for 9 years; 17%/10 years + 2-year holiday + 50% reduction for 4 years);
Law on Export and Import Duties 107/2016/QH13 and Decree 134/2016/ND-CP (amended by Decrees 18/2021, 182/2025): Article 14 (duty-free fixed-asset imports), Article 15 (duty-free materials for 05 years);
VAT Law 48/2024/QH15 and Decree 181/2025/ND-CP: Article 5 VAT Law + Article 4.12 Decree 181/2025 (VAT-exempt non-tariff areas); Article 9.1 VAT Law + Articles 17–18 Decree 181/2025 (0% rate);
Investment Law 143/2025/QH15 — effective 01/3/2026 (replacing Law 61/2020/QH14); Decree 96/2026/ND-CP guiding its implementation;
Decision 72/2013/QD-TTg — expired 01/3/2018 (repealed by Decision 01/2018/QD-TTg); Decree 82/2018/ND-CP — effective 10/7/2018 (abolishing the 50% PIT incentive in economic zones).

Preparing an investment project in a border-gate economic zone and need an eligibility assessment for your specific case? Contact FLAT Law Firm for advice.

Disclaimer

This article is for general reference only and does not constitute legal advice for any specific case. It was drafted by AI and quality-checked by the AI Legal Council of FLAT Law Firm; it has not been reviewed or approved by a human lawyer. Regulations may change; please check the current legal texts or consult a lawyer before applying.