Investment incentives in the field of information technology in Vietnam

Investment incentives in the field of information technology in Vietnam

A number of investment incentives in the field of information technology research, production equipment, software, IPv6 content, are summarized as follows:

I. Investment policies in the field of information technology in Vietnam:

- Investment  in information technology for research, production of equipment, software, IPv6 content which is a special investment preferential field as stipulated in the Investment Law and the guidelines.

- Investment in information technology in research, production of equipment, software, IPv6 content is entitled to incentives and supports in accordance with the Law of high technology.

Accordingly, investment projects in the field of equipment, software, IPv6 content shall be  enjoyed incentive policies for development such as corporate income tax policies; import tax on fixed assets, taxes on raw materials and supplies; exemption, reduction of land rent, land use fees, land use tax. Preferential mechanisms are specified in the following sections.

II. Tax policies for investment incentives in the field of information technology in Vietnam:

2.1. Corporate income tax for investment incentives in the field of information technology in Vietnam:

Law on enterprise income tax and guidelines on enterprise income tax incentives applicable to investment projects in the field of information technology as follows:

* The projects to be enjoyed investment incentives related to the production of equipment, software and IPv6 content, including:

(i) New investment projects in areas with extremely difficult socio-economic conditions, economic zones and hi-tech parks, including concentrated IT zones established under the Prime Minister”s decision.

(ii) New investment projects in the fields of scientific research and technological development; To apply high technologies on the list of hi-tech technologies prioritized for development investment according to the provisions of the Law on High Technologies; Producing software products.

(iii) High-tech enterprises, high-tech agricultural enterprises.

(iv) New investment projects in the field of production satisfy one of the following two criteria: Minimum investment capital of VND 6 trillion shall be disbursed not later than three years from the date of issuance of the investment certificate and have a total turnover of at least ten trillion dong/year, at the latest after three years. from the year of turnover; Projects with an investment capital of at least VND6 trillion shall be disbursed for no more than three years from the date of issuance of the investment certificate and employing over three thousand laborers.

(v) Investment projects in the field of production with an investment capital of at least VND 12,000 (twelve thousand) using the technology must be evaluated in accordance with the Law on High Technology, the Law on Science and Technology, disburse the total investment capital registered not more than 5 years from the date of investment registration  according to the provisions of the law on investment.

(vi) Income of enterprises from the implementation of socialization activities in the fields of education and training, vocational training, health care, culture, sports and the environment to meet the criteria of the Prime Minister”s regulations; The income from publishing activities of the Publisher in accordance with the Law on Publication; The income from the printing press (including advertising in printed newspapers) of the press agencies according to the provisions of the Press Law.

(vii) New investment projects in areas with difficult socio-economic conditions.

(viii) New investment projects in industrial zones (except industrial parks located in areas with favorable socio-economic conditions).

* The level of investment incentives in the field of information technology in Vietnam:

- Applying the tax rate of 10% for 15 years, 4 years of exemption and reduction of 50% of the payable tax for the next 09 years for new investment projects in field of information technology meeting the criteria in points (i), (ii), (iii), (iv) and (v) above.

- The tax rate of 10% shall be applied throughout the implementation duration, the tax exemption for 4 years and the reduction of 50% of the payable tax amounts for 5 subsequent years, for projects in field of information technology meeting the criteria specified in Points (vi) as above; In cases where they are located in areas with difficult socio-economic conditions, they shall be exempt from tax for 4 years and tax reduction for 9 years.

- Applying the tax rate of 20% for 10 years, the tax exemption for 2 years and the reduction of 50% of the payable tax for 4 subsequent years, for projects in field of information technology meeting the criteria mentioned in point (vii) above.

- Two-year tax exemption and 50% reduction of the payable tax for four subsequent years for projects in field of information technology meeting the criteria specified at Point (viii)

Thus, in the field of research, production of equipment, software and content of IPv6 technology is a high technology sector, especially investment incentives, be applied high tax incentive policies. Enterprises should base on the above regulations to apply accordingly.

2.2. Import Tax

Goods imported to create fixed assets of investment projects in the field of information technology research, production equipment, software and content of IPv6 technology are exempt from import tax, including:

a / Equipment and machinery;

b / Specialized transport means used in production lines which can not be produced in Vietnam; means of transportation for transporting workers include cars of 24 seats or more and waterway means;

c) Components, spare parts, spare parts, fittings, molds and accessories provided for assembly together with equipment, machinery and special-use transport means specified at Points a and c. b;

d / Raw materials and materials which can not be produced in Vietnam and are used for manufacture of equipment and machinery in the technological line or for manufacture of spare parts, spare parts, accessories, molds , accompanying accessories for assembly with equipment and machinery specified at Point a;

Raw materials, supplies and components which can not be produced in Vietnam and are imported for production of investment projects in field of special investment encouragement are entitled to import tax exemption for 5 (five) years from the date of commencement of production.

2.3. Value added tax (VAT):

Goods and services related to IT are not subject to VAT

III. Investment credit, export credit:

- Informatics softwares (software, contents for IPv6) on the list of goods eligible for export loans in according to regulations of the Government.

In addition, the production of equipment, software, support services for IPv6 content also enjoy other preferences of the National Fund for Science and Technology Development.

IV. Preferential treatment for enterprises operating in the concentrated IT park.

Investment projects on the production of equipment, software and IPv6 content invest in the concentrated information technology park shall enjoy preferences according to the provisions of the legislation on high technologies, specifically income corporate tax exemption in four years, 50% reduction of tax payable in the next nine years.

Source: Official Letter No. 1956 / BTTTT-IT DATE 13/6/2016

LAWYER VN - Vietnamese Law Firn