Casino resorts and gaming establishments standing on special economic zones (SEZs) in Vietnam will be seeing their tax incentives reduced in response to the Assembly’s criticism of their generous incentives.
During a recent meeting at the Vietnamese National Assembly, delegates and economists negatively commented on the government’s plan to offer generous tax incentives to investors of properties located at the SEZs. These casino projects include those in Phu Quoc in the southern Kien Giang Province, Van Don in the northern Quang Ninh Province, and Bac Van Phong in the central Khanh Hoa Province.
Vietnam Makes Things Tough For Casinos
Currently entertainment and tourism projects enjoy unlimited land and sea leases. This unlimited exemption period will be scrapped and in place will be a finite extension period that does not exceed half of the projects’ total lease time so far. With this new extension period, the Van Don and Bac Van Phong SEZs will only be exempted for no more than 30 years, while the Phu Quoc SEZ will be limited to no more than 20 years.
There is also a new preferential corporate income tax proposal that these projects will be asked to pay, instead of the generous tax reduction of 100 percent for the first four years, 50 percent for the next five years, and then down to 10 percent for the next 21 years before they are asked to pay the normal tax rate of 20 to 22 percent.
According to the new income tax proposal for these SEZs, they will be paying a reduced rate of 17 percent for the first five years once they generate taxable revenue. By the sixth year, they will then start paying the normal tax rate.
As these properties are offering products subject to excise tax, they are also required to pay a specific amount every year. Scrapping the previous proposal of 10 percent, the Assembly now suggests a 15 percent excise tax for the first 10 years.
According to the Ministry of Planning and Investment, the original tax rates were expected to generate US$9.5 billion from tax payments and land leasing fees. As the SEZs complete their projects, over 760,000 jobs are expected to be generated in the area alone.
A draft law to finalize these changes applicable to SEZs will be discussed when the Assembly reconvenes this week.
Suncity Will Feel Impact Of New Rules
Macau junket investor Suncity Group will be greatly affected by the new taxation scheme since they have plans to be involved in two projects inside the SEZs.
One of these is the currently under-construction central coast casino resort project in Quang Nam province that will be called Hoi An South. The project will be a $2-billion luxury resort casino that spans 2,500 hectares in the SEZs. The $700-million phase one of the project is due to be completed in 2019.
Suncity is also undertaking the management of one in Van Don in Quang Ninh, although they have zero stake in it.
Tighter Taxation Follows Fresh Gambling Regulations
These changes in the proposed tax schemes come after the Vietnamese government rolled out a couple of changes in their gambling industry. Previously, Chinese authorities reduced the capital commitment for large-scale casino resorts from US$4 billion to US$2 billion.
Last year, the government also lifted a decree that banned Vietnamese locals from playing in their casinos. Effective November 2017, locals aged 21 with a monthly income of VND10 million (US$443) can start entering and playing in casinos if they pay VND1 million for a 24-hour casino pass. The resolution is on a three-year trial period, whose extension will be subject to an evaluation by the government.
When the decree was lifted, many investors and economists became hopeful that this will attract more foreign investors and tourists into the casinos. In fact, Suncity did confirm that Hoi An South’s main target market is Vietnamese locals.
Not all casinos will be eligible to offer entrance to Vietnamese locals, but a number of casinos are very interested in applying for the pilot program. Suncity confirmed that Hoi An South is interested, alongside The Grand Ho Tram, a gaming resort on the country’s southern coast.
Most casinos in Vietnam are just operating at a third of their capacity because of poor revenues. If and when locals are allowed entry into Vietnam’s casinos, their revenues are bound to increase and could also encourage casino operators to invest more into the country by developing more casino resorts.

This site is registered on as a development site.