This is part of the statement submitted by the MOF to the government on the amendment to provisions of the law on personal income tax.

Encouraging investment projects according with CDM (clean development mechanism) is a growing tendency in the world, because these are projects under which products are made with new and advanced technologies, which are friendly to the environment and useful in greenhouse gas emissions. 

The CDM International Executive Board implements the supervision, approves registrations, and issues emission reduction certificates. Organizations and individuals have the right to transfer certificates to those who have demand, and have more capital to develop clean-production technology.

MOF emphasized that developing the carbon credit market is an important solution to implement the goals for environmental protection. The ministry has cited the Law on Environmental Protection approved by the National Assembly in 2020 and valid since January 1, 2022, which has provisions about carbon credits and carbon credit exchange and transfer mechanisms. The law also stipulates that the state needs to create policies to encourage the development of the market.

Also, the Law on Environmental Protection also consists of regulations on green bonds to be issued by the government, local authorities and enterprises to mobilize capital for environmental protection activities, and for investment projects that bring benefits to the environment and issuers. 

The investors who buy green bonds can enjoy preferences as stipulated by the law. The government will issue a legal document to guide the implementation of the law.

In recent years, many countries have deployed the policies to accelerate the market for emission reduction certificates, carbon credits and green bonds to encourage environmental protection via carbon emission reduction, thereby heightening the community’s awareness of greenhouse gas emission reductions, and green and sustainable growth.

Thailand, Malaysia and China have set regulations on exempting tax on incomes from emission reduction certificate transfer. Meanwhile, Mexico, India and the US have set up preferential personal income regimes to boost the green bond market.

In the US, the income from green bonds issued by local governments are subject to tax exemption. In Thailand and other countries, tax remissions are applied to carbon credit transfer.

In an effort to promote activities striving for sustainable development and implement Vietnam’s commitments at COP26, MOF believes that it is necessary to conduct research to add income from emission reduction certificates and carbon credit transfers for the first time after issuance on the list of products and services subject to personal income exemption.

Tam An