DECREE COVERING SCIENCE AND TECHNOLOGY ENTERPRISES – INCLUDING TAX EXEMPTIONS & REDUCTIONS
The Decree stipulates the conditions and authorisations to grant S&T Certificates, preferential and supporting policies for S&T enterprises.
The Decree is applicable to enterprises specialising in scientific and technological activities, and the S&T Enterprise Certificate is the basis for implementing preferential and supporting policies for S&T enterprises.
Conditions for enterprises to obtain S&T Enterprise Certificates
To be granted an S&T Enterprise Certificate, enterprises are required to meet the following conditions:
a) Established and operating under the Enterprise Law;
b) Being able to create or apply scientific and technological results which are evaluated, appraised and recognized by competent agencies; and
c) Generating revenue from the production and sales of products developed from scientific and technological results, equating to a minimum of 30% of the total enterprise revenue.
Newly-established enterprises, operating for less than 5 years, that meet the conditions in a and b (above) can be certified as “Scientific and Technological Enterprises.”
The Departments of Science and Technology are authorized to grant the S&T Enterprise Certificates in general, except for certain cases specified in the Decree where Certificates are granted by the Department of Market Development.
Tax Incentives for S&T enterprises
S&T enterprises meeting the above requirements, are entitled to:
• CIT exemption for 4 years; and
• 50% CIT reduction for the next 9 years.
In addition, there are reductions for land rental, water surface rental and credit incentives for S&T enterprises.
The Decree is effective from 20 March 2019.
NEW DECREE AMENDING SPECIAL CONSUMPTION TAX
On 1 February 2019, the Vietnam Government issued Decree 14/2019/ND-CP adjusting and supplementing Decree 108/2015/ND-CP regarding Special Consumption Tax (“SCT”) laws.
Significant amendments in the Decree include:
• Adding further items exempted from SCT including aircraft used for the purpose of spraying pesticides, firefighting, filming, taking photos and measuring maps (Clause 1, Article 1).
• Procedures, required documents and SCT refund process for temporarily imported and re-exported goods now follow Article 34 of Decree 134/2016/ND-CP (Clause 2, Article 1).
• Procedures, required documents and SCT refund process for goods imported for production and the processing of those goods follow Article 36 of Decree 134/2016/ND-CP (Clause 2, Article 1).
• Where import declarations include both import tax and SCT to be refunded, the application for import tax refund and SCT refund are combined in one application (Clause 2, Article 1).
• Supplementing the conditions for SCT deductions (Clause 3, Article 1).
The Decree takes effect from 20 March 2019.