Science and Technology businesses: More incentives from March 20th, 2019
Science and Technology businesses are not only a bridge to rapidly put scientific and technological research and application into production but also a key in productive forces creating value-added products, contributing to the construction and development of the country’s economy and GDP.
The Vietnamese Government has issued Decree No.13/2019/ND-CP (Decree 13), which provides preferential treatment such as tax cuts and exemptions, credit incentives, and the exemption or reduction in land and water surface lease fees for Science and Technology enterprises.
Below are some notable contents about incentives that Science and Technology businesses should consider.
Firstly, the requirements for an enterprise to be considered as a Science and Technology enterprise.
A Science and Technology enterprise must satisfy the following requirements: being established and operated under the Law on Enterprises; has the ability to create or apply scientific and technological results evaluated, assessed, recognized by competent authorities; has revenue from products developing on scientific and technological results, which reaches a minimum rate of 30 percent of the total revenue. Enterprises established under 05 years satisfy the above-mentioned requirements are also considered Science and Technology enterprises.
Secondly, about incentives.
The exemption, reduction and preferential treatment on many taxes and fees
The exemption and reduction in corporate tax
Science and Technology businesses with income sourced from creating and selling products that result from R&D shall get corporate tax reduction and exemption the same as businesses with new investment projects in R&D. Specifically, they shall be exempted from corporate tax for 04 years and get a reduction of 50 percent in the 09 following years.
However, to be entitled to tax incentives for the fiscal year, enterprises need to ensure that their scientific and technological projects account for at least 30 percent of the total turnover. Procedures and requirements on applying corporate tax incentives have been implementing according to the Law on Enterprise income tax and Tax administration.
The preferential treatment on import and export tax
Decree 13 has also specified the support for research activities and commercialization of scientific and technological results. Science and Technology businesses are also entitled to import, export tax incentives for R&D, production, and other business activities according to the Law on Import, Export tax.
The exemption from certain fees
In addition to incentives, Science and Technology enterprises shall get priority and shall not be charged any fees for using equipment and facilities at the national laboratories, government-owned research and technology facilities, and technology incubators to carry out R&D, technological incubation, new products’ trial production, incubation of Science and Technology enterprises.
Besides, Science and Technology enterprises have been exempted from registration fee when registering land use rights, house ownership according to regulations on the Registration fee.
Credit incentives
Decree 13 states that projects investing in products which result from businesses’ R&D shall be provided with State’s investment credit according to the current laws.
Under the Decree, Science and Technology enterprises shall be entitled to receive soft loans from the National Technology Renewal Fund or science and technology development funds of ministries, ministerial-level agencies, government-attached agencies, provinces or centrally-run cities on the condition that they have collaterals for such loans. In case they borrow loans from commercial banks, they shall receive from these funds with an interest rate support at most equal to 50 percent of the lending interest rates applied by such banks.
The National Technology Renewal Fund and ministerial-level and provincial-level science and technology development funds shall also provide loans with preferential interest rates to Science and Technology enterprises whose projects are evaluated as feasible, or grant guarantee for them to borrow capital from commercial banks.
In addition, Science and Technology enterprises that meet the conditions set by the Credit Guarantee Fund for Small- and Medium-Sized Enterprises may apply for a grant of credit guarantee from this fund.
The exemption and reduction in Land and Water surface lease fees
According to Decree 13, Science and Technology businesses are entitled to an exemption or reduction in their land and water surface lease fees, which shall be determined by the Department of Science and Technology. The Department of Science and Technology is responsible for coordinating with agencies that receive dossiers of application for land allocation, land lease, or permission for change of land use purposes in determining land or water surface areas used for scientific and technological purposes which are eligible for rental exemption or reduction.
Procedures and dossiers of application for land rent, water rent exemption and reduction have been implemented according to regulations of the Law on Tax administration and regulations on collection of land rent.
Decree 13 has taken effect on March 20th, 2019.
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