Currently, the tax policy system has many preferential policies, supporting the development of information technology and science and technology industries. In order to improve the competitiveness of software, information technology and science and technology enterprises, promote investment attraction for information technology development according to the set objectives in the context of economic integration. As international integration deepens, the National Assembly and the Government consider it necessary to have more supportive policies, including tax incentives to further promote the application and development of information technology in Vietnam. .
DHP Law would like to send to readers useful information about tax policies for enterprises dealing in software, information technology and science and technology.
1 Legal basis
+ Law on Corporate Income Tax 2008
+ Circular 219/2013/TT-BTC dated December 31, 2013 guiding the implementation of the value added tax law (Clause 21, Article 4)
+ Decree 13/2019/ND-CP dated February 1, 2019 on science and technology enterprises
+ Circular 96/2015/TT-BTC dated June 22, 2015 providing guidance on corporate income tax (Article 11, Article 12).
2 Conditions for establishing a science and technology enterprise
Individuals or organizations establishing science and technology enterprises must complete the invention (also known as incubation) and must master the results from that invention, and master science and technology. that they have created or owned, must legally and legally use the technologies they have created to develop into the production of products in areas such as:
- Development of information technology software: such as security, anti-virus, software design, … in the field of information technology
- Developing biotechnology for the following industries:
- Aquaculture: machinery, drugs to treat aquatic diseases, nutritious food
- Agriculture: new varieties of rice and crops, pesticides, fertilizers…
- Health: antibiotics, methods of treatment combining Eastern and Western medicine…
- Developing production automation lines, automatic robots, high-tech machines, etc. to improve productivity and product quality, in the field of automation.
- Developing nanotechnology, covering the outside of cars, household appliances, anti-scratch and limiting bacteria… developing more advanced and convenient nano-injectors, more durable; In addition, it is also necessary to search for new materials that are more suitable to the environment, Vietnam’s weather, reduced costs… in the field of new material technology.
- Developing technologies such as biodegradable paper bags to replace nylon, herbicides, insecticides that are not dangerous to the environment, etc. in the field of environmental protection technology.
- Developing the use of clean energy sources such as solar energy, biofuels to replace gasoline, low smoke, etc., in the field of new energy technology.
- Developing satellites launched into space, researching models of spaceships… belonging to space technology.
- Conditions for Enterprises to be granted the Certificate of Science and Technology Enterprise
An enterprise shall be granted a certificate of science and technology enterprise when it meets the following conditions:
- Established and operating under the Enterprise Law;
- Having the ability to create or apply scientific and technological results that are evaluated, appraised and recognized by competent agencies in accordance with law.
- Having a turnover from the production and trading of products formed from scientific and technological results reaching at least 30% of total revenue.
- (New enterprises established for less than 5 years that satisfy two conditions are that they are established and operate under the Enterprise Law and have the ability to create or apply scientific and technological results assessed by competent authorities, appraised and recognized according to the provisions of law, shall be certified as a science and technology enterprise.)
+ Dossier of application for certification of S&T enterprise includes:
- Application for certification of S&T enterprises using form No. 01 in the Appendix issued together with Decree No. 13/2019/ND-CP.
- Copy of Business Registration Certificate (certified copy in case the application is sent by post);
- A written certification and recognition of scientific and technological results from a competent authority (a copy to be presented with the original for comparison or a certified true copy), in one of the following documents:
- Diploma of protection of intellectual property rights;
- Decision on recognition of new plant varieties, new livestock breeds, new aquatic varieties, new forestry plant varieties and technical advances;
- Certificate of award for the performance of tasks that have won prizes in science and technology, chaired by competent state agencies, coordinated with the organization to consider and award awards, or agreed to give awards to the organization. the awarding organization;
- Decision on recognition of results of performance of scientific and technological tasks funded with the state budget or Certificate of registration of results of performance of scientific and technological tasks funded with the state budget; Certificate or certificate of appraisal of results of performing scientific and technological tasks without using the state budget;
- Certificate of registration of technology transfer;
- Other certifications and recognition documents have equivalent legal validity.
- The plan for production and trading of products formed from the results of science and technology according to form No. 02 in the Appendix issued with Decree No. 13/2019/ND-CP.
+ Submit application directly at the Department of Science and Technology or by post.
- Tax incentives for enterprises dealing in software and information technology
+ Value added tax
- In order to implement policies to encourage the development of information technology and application of technology to life, software (regardless of production or business) is not subject to value-added tax and import tax.
- However, for imported software, enterprises still have to pay import tax and VAT at the stage of importation at the tax rate prescribed for each software containing media (such as CD, USB) with taxable prices exclusive of tax rates. includes the section “use value of intellectual property – software”.
- Enterprises need to base on the fact of imported goods to classify goods tax codes.
+ Corporate income tax
- Incomes of science and technology enterprises from production and trading activities of products formed from scientific and technological results are entitled to the same incentives for exemption and reduction of corporate income tax as enterprises implementing projects. New investment in the field of scientific research and technological development, specifically:
- From year 1 to year 4: Will be exempt from CIT.
- From year 5 to year 13 (next 9 years): 50% reduction of CIT at the rate of 10%, (ie businesses only need to pay CIT at the rate of 5%).
- Corporate income tax incentives are provided if the S&T enterprises satisfy the conditions that the ratio of turnover from the production and trading of products and goods formed from the results of S&T over the total revenue of the enterprise in the first year reaches 30% or more, 50% or more in the second year and 70% or more in the third year. The first year is understood as the first year the S&T enterprise has taxable income.
- Revenue and income from production and trading of products formed from scientific and technological results as prescribed in Clause 1, Article 2 of Decree 13/2019/ND-CP. Revenue and income generated from services with application of scientific and technological results in the field of information technology must be revenue and income from new services.
+ Science and technology enterprises are exempted from registration fees when registering land use rights and house ownership rights.
+ Science and technology enterprises are entitled to preferential policies on investment credit from the Vietnam Development Bank, the National Technology Innovation Fund and other funds for the implementation of production and business investment projects.
+ Enterprises applying high technology are entitled to the highest incentives in accordance with the law on high technology. Enterprises applying technology as a result of scientific and technological tasks in the country are supported with loan interest rates at banks.
For legal assistance and/or enquiries, please contact:
DHP LAW LAW – DHP LAW Address: L4-09.OT06 Landmark 4 Building, Vinhomes Central Park, 720A Dien Bien Phu, Ward 22, District Binh Thanh, Ho Chi Minh City.
Hotline: 0986.938.627
Zalo, Viber, Line: 0986.938.627
Facebook: facebook.com/DHPLAW
