Procedures for applying incentives for enterprises operating in the field of information technology

Do businesses operating in the field of information technology enjoy special tax investment incentives?

1. Are businesses operating in the field of information technology an industry eligible for special investment incentives?

Pursuant to part I, section A, Appendix II issued with Decree 31/2021/ND-CP stipulating special investment incentive industries of information technology as follows:

“A. SPECIAL INDUSTRIES AND OCCUPATIONS FOR INVESTMENT INCENTIVES

I. HIGH TECHNOLOGY, INFORMATION TECHNOLOGY, SUPPORTING INDUSTRY

1. High-tech applications in the List of high technologies prioritized for investment and development according to the Prime Minister’s decision.

2. Production of products in the List High-tech products are encouraged to be developed according to the Prime Minister’s decision.

3. Production of products in the list of supporting industry products prioritized for development according to the Government’s regulations on supporting industry development.

4. High-tech incubation, high-tech business incubation; venture investment for high-tech development; according to the provisions of law on high technology; production of biotechnology products; training of high-tech human resources; provision of high-tech services.

5. Producing software products, digital information content products, key information technology products, software services according to the provisions of law on information technology; producing network information security products and ensuring the conditions prescribed by the law on information technology law on network information security; production of products formed from scientific and technological results according to the provisions of law on science and technology.

6. Production of renewable energy, clean energy, energy from waste destruction.

7.

8. Manufacturing products on the List of key mechanical products as decided by the Prime Minister.”

Thus, businesses operating in the field of information technology are industries that enjoy special investment incentives under the Law on Investment 2020.

2. Do businesses operating in the information technology sector enjoy special tax investment incentives?

Pursuant to Clause 7, Article 1 of the 2013 amended Law on Corporate Income Tax, preferential tax rates are stipulated as follows:

“7. Article 13 is amended and supplemented as follows:

“Article 13. Tax incentives

1. Apply tax rate of 10% for fifteen years to:

[…] b) Enterprise income from implementing new investment projects, including:

Scientific research and technological development; High technology applications in the list of high technologies prioritized for investment and development according to the provisions of the High Technology Law; high-tech incubation, high-tech business incubation; Venture capital investment for high technology development belongs to the list of high technologies prioritized for investment and development according to the provisions of the High Technology Law; investment in construction and business of high-tech incubators and high-tech business incubation facilities; Investing in the development of particularly important State infrastructure according to the provisions of law; software product production; production of composite materials, light construction materials, and rare materials; producing renewable energy, clean energy, energy from waste destruction; biotechnology development; environmental protection;”

3. What are the procedures to apply incentives for businesses operating in the information technology field?

Pursuant to Article 23 of Decree 31/2021/ND-CP stipulating procedures for applying investment incentives as follows:

“Article 23. Procedures for applying investment incentives

1. The Decision approving the investment policy, the Investment Registration Certificate, the Decision approving the investor stipulates the form, basis, and conditions for applying investment incentives according to the provisions of Articles 15 and 16 of the Investment Law and Article 19 of this Decree.

2. Based on the investment incentive content in the Investment Policy Approval Decision, Investment Registration Certificate, Investor Approval Decision, the investor shall carry out procedures to enjoy investment incentives at the agency applying investment incentives corresponding to each type of incentive.

3. Grounds for applying investment incentives to a number of enterprises and investment projects specified in Clause 5, Article 19 of this Decree include:

a) For science and technology enterprises, the Certificate of science and technology enterprise;

b) For agricultural enterprises applying high technology, the Certificate of agricultural enterprise applying high technology;

c) For high-tech application projects, it is the High-tech application project certificate;

d) For supporting industry projects, the Certificate of incentives for production of supporting industry products;

d) For projects with technology transfer on the List of technologies encouraged for transfer, the Certificate of Technology Transfer Encouraged Transfer is required according to the Prime Minister’s regulations.

4. For investment projects that do not fall into the cases specified in Clauses 2 and 3 of this Article, investors will base on the beneficiaries of investment incentives specified in Article 19 of this Decree and relevant legal provisions to determine their own investment incentives and carry out procedures for enjoying investment incentives at the agency applying investment incentives corresponding to each type of incentive.

Accordingly, if your business does not have to go through investment procedures, you must register for investment incentives at the tax authority where the business is headquartered.