Circular 03/2021/TT-BTC provides guidance on corporate income tax exemptions and reductions for science and technology enterprises.

CIRCULARS

GUIDELINES ON TAX EXEMPTIONS AND REDUCTIONS FOR CORPORATE INCOME TAX FOR SCIENCE AND TECHNOLOGY ENTERPRISES AS STIPULATED IN GOVERNMENT DECREE NO. 13/2019/ND-CP DATED FEBRUARY 1, 2019 ON SCIENCE AND TECHNOLOGY ENTERPRISES

Based on the Corporate Income Tax Law No. 14/2008/QH12 dated June 3, 2008; the Law amending and supplementing a number of articles of the Corporate Income Tax Law No. 32/2013/QH13 dated June 19, 2013; and the Law amending and supplementing a number of articles of tax laws No. 71/2014/QH13 dated November 26, 2014;

Based on the Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019;

Based on Government Decree No. 218/2013/ND-CP dated December 26, 2013, detailing some provisions of the Law on Corporate Income Tax and the Law amending and supplementing some provisions of the Law on Corporate Income Tax; Government Decree No. 91/2014/ND-CP dated October 1, 2014, amending and supplementing some provisions in the Decrees regulating taxes; and Government Decree No. 12/2015/ND-CP dated February 12, 2015, detailing the Law amending and supplementing some provisions of the Laws on taxes;

Based on Decree No. 13/2019/ND-CP dated February 1, 2019 of the Government on science and technology enterprises;

Pursuant to the Decree No. 87 / 2017 / ND-CP dated 26 / 7 / 2017 of the Government defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

In accordance with the directives of the Prime Minister in document No. 4377/VPCP-KTTH dated June 2, 2020, from the Government Office regarding corporate income tax policy for science and technology enterprises;

As requested by the Director General of the General Department of Taxation;

The Minister of Finance issued a Circular guiding the exemption and reduction of corporate income tax for science and technology enterprises as stipulated in Government Decree No. 13/2019/ND-CP dated February 1, 2019, on science and technology enterprises.

Article 1. Scope of adjustment and subject of application

1. Scope of application: This Circular provides guidance on tax exemptions and reductions on corporate income tax for science and technology enterprises as stipulated in Government Decree No. 13/2019/ND-CP dated February 1, 2019, on science and technology enterprises.

2. Applicable entities: Science and technology enterprises as defined in the Law on Science and Technology and Government Decree No. 13/2019/ND-CP dated February 1, 2019 on science and technology enterprises, and relevant agencies, organizations, and individuals.

In the case of a science and technology enterprise with a subsidiary branch that maintains independent accounting, if the branch meets the conditions stipulated in Article 2 of this Circular, then income from products resulting from the scientific and technological achievements of the branch is also entitled to corporate income tax incentives as prescribed in Clause 1, Article 12 of Government Decree No. 13/2019/NĐ-CP dated February 1, 2019.

Article 2. Conditions of Application

Science and technology enterprises eligible for tax exemptions and reductions on corporate income tax as stipulated in Clause 1, Article 12 of Government Decree No. 13/2019/ND-CP dated February 1, 2019, must meet the following conditions:

1. Obtained a Certificate of Science and Technology Enterprise from a competent state management agency.

2. Annual revenue from the production and sale of products resulting from scientific and technological achievements must account for at least 30% of the enterprise's total annual revenue.

a) Annual revenue from the production and business activities of products resulting from science and technology is the revenue of all products resulting from science and technology as stipulated in Clause 1, Article 2 of Government Decree No. 13/2019/ND-CP dated February 1, 2019.

b) The enterprise's total annual revenue is the sum of all revenue from production, business, and service activities, revenue from financial activities, and other income of the enterprise (total revenue includes revenue from the production and business of products resulting from scientific and technological achievements in that year).

3. Revenue generated from services that apply scientific and technological results in the field of information technology is revenue from new services, excluding services already available on the market.

The criteria and basis for determining whether a service applies scientific and technological results in the field of information technology and is a new service are regulated by the Ministry of Science and Technology.

4. Science and technology enterprises must separately account for income from the production and business activities of products resulting from scientific and technological achievements during the period in order to enjoy corporate income tax incentives. If the enterprise cannot separately account for this income, the income from the production and business activities of products resulting from scientific and technological achievements that are eligible for corporate income tax incentives shall be allocated according to the provisions of Clause 2, Article 18 of the Corporate Income Tax Law No. 14/2008/QH12.

To qualify for corporate income tax incentives, science and technology enterprises must comply with accounting, invoicing, and documentation regulations as prescribed by law and pay taxes based on self-declaration.

Article 3. Tax exemptions and reductions for corporate income tax

1. Levels and durations of preferential exemptions and reductions for corporate income tax.

a) Science and technology enterprises are entitled to tax exemptions and reductions on corporate income tax as stipulated in Clause 1, Article 12 of Government Decree No. 13/2019/ND-CP dated February 1, 2019, specifically: tax exemption for 4 years and a 50% reduction in tax payable for the following 9 years.

b) The tax exemption and reduction period for science and technology enterprises is calculated continuously from the date of issuance of the Science and Technology Enterprise Certificate. If there is no taxable income in the first three years from the first year of issuance of the Science and Technology Enterprise Certificate, the first year of the tax exemption and reduction period will be calculated from the fourth year.

c) During the period of corporate income tax exemption or reduction, if in any year the science and technology enterprise fails to meet the condition that the revenue from products resulting from science and technology reaches a minimum of 30% of the enterprise's total annual revenue, then in that year the science and technology enterprise will not be entitled to the tax exemption and this amount will be deducted from the period of corporate income tax exemption for the science and technology enterprise.

d) In cases where a science and technology enterprise has taxable income but the period of production and business activities eligible for tax exemption or reduction in the first year is less than 12 (twelve) months, the science and technology enterprise may choose to enjoy the tax exemption or reduction in that first year or register with the tax authority to begin the tax exemption or reduction in the following year. If the enterprise registers for tax exemption or reduction in the following year, it must determine the amount of tax payable for the first year with taxable income and pay it to the State budget as prescribed.

2. Some applicable cases

a) In cases where a science and technology enterprise has already or is currently enjoying corporate income tax incentives under other preferential conditions (in addition to the preferential conditions for science and technology enterprises) and is granted a Certificate of Science and Technology Enterprise, the period of corporate income tax exemption or reduction under the conditions for science and technology enterprises shall be determined by subtracting the period of corporate income tax exemption or reduction already enjoyed under other preferential conditions from the period of corporate income tax exemption or reduction applicable to science and technology enterprises.

b) In the case of a science and technology enterprise that is currently operating and enjoying corporate income tax incentives under the conditions for science and technology enterprises, if the competent authority adds products resulting from science and technology to its Science and Technology Enterprise Certificate, then the income from the production and business activities of the added products resulting from science and technology will enjoy tax exemption and reduction incentives for corporate income tax, along with the tax exemption and reduction incentives already enjoyed by the science and technology enterprise, for the remaining period.

Article 4. Procedures for implementing corporate income tax incentives

1. The procedures for implementing corporate income tax incentives shall be carried out in accordance with the provisions of the law on corporate income tax and tax administration.

2. Science and technology enterprises shall determine the amount of preferential corporate income tax they are entitled to and declare it in the Corporate Income Tax Preferential Schedule for Science and Technology Enterprises attached to this Circular. The Corporate Income Tax Preferential Schedule shall be submitted together with the annual corporate income tax return.

Article 5. Enforcement

1. This Circular takes effect from March 1, 2021.

2. Enterprises granted a Certificate of Science and Technology Enterprise and generating revenue and income from the production and business activities of products resulting from scientific and technological achievements since the effective date of Decree No. 13/2019/ND-CP dated February 1, 2019 (March 20, 2019) are entitled to tax exemptions and reductions on corporate income tax for science and technology enterprises as stipulated in Article 12 of Decree No. 13/2019/ND-CP dated February 1, 2019 of the Government and guided in Articles 1, 2, 3 and 4 of this Circular.

3. Transitional provisions

a) In cases where enterprises have been granted a Certificate of Science and Technology Enterprise before the effective date of Government Decree No. 13/2019/ND-CP dated February 1, 2019, and are currently enjoying corporate income tax incentives as stipulated in legal documents prior to the effective date of Government Decree No. 13/2019/ND-CP dated February 1, 2019, they shall continue to enjoy corporate income tax exemptions and reductions for the remaining period, but shall no longer enjoy preferential corporate income tax rates from the effective date of this Circular.

b) In cases where an enterprise has been granted a Certificate of Science and Technology Enterprise before the effective date of Government Decree No. 13/2019/ND-CP dated February 1, 2019, but has not yet enjoyed corporate income tax incentives for science and technology enterprises as stipulated in legal documents prior to the effective date of Government Decree No. 13/2019/ND-CP dated February 1, 2019, if it meets the conditions for corporate income tax incentives for science and technology enterprises as stipulated in Government Decree No. 13/2019/ND-CP dated February 1, 2019, it shall be entitled to tax exemption or reduction as stipulated in Government Decree No. 13/2019/ND-CP dated February 1, 2019, for the remaining period.

4. This Circular repeals the following regulations:

a) Repeal Point 1, Section III of Joint Circular No. 06/2008/TTLT-BKHCN-BTC-BNV dated June 18, 2008, issued by the Ministry of Science and Technology, the Ministry of Finance, and the Ministry of Home Affairs, guiding the implementation of Government Decree No. 80/2007/ND-CP dated May 19, 2007, on science and technology enterprises.

b) Repeal Clauses 8 and 9 of Article 1 of Joint Circular No. 17/2012/TTLT-BKHCN-BTC-BNV dated September 10, 2012, of the Ministry of Science and Technology, the Ministry of Finance, and the Ministry of Home Affairs, amending and supplementing Joint Circular No. 06/2008/TTLT-BKHCN-BTC-BNV dated June 18, 2008, of the Ministry of Science and Technology, the Ministry of Finance, and the Ministry of Home Affairs guiding the implementation of Government Decree No. 80/2007/ND-CP dated May 19, 2007, on science and technology enterprises.

5. In cases where the legal documents cited in this Circular are amended, supplemented, or replaced by new legal documents, the new documents shall apply.

6. During the implementation process, if any difficulties arise, organizations and individuals are requested to promptly report them to the Ministry of Finance for consideration and resolution.

TABLE OF CORPORATE INCOME TAX INCENTIVES FOR SCIENCE AND TECHNOLOGY ENTERPRISES

(Attached is the Corporate Income Tax Return Form)

Tax period: from ……………to………………

Taxpayer's name: ………………………………………………………….

Tax code:

Name of tax agent (if any): …………………………………………………….

Science and Technology Enterprise Certificate Number: ………………………………………..

Date of issue: ………………………………, Place of issue: ……………………………………………………….

List of products resulting from scientific and technological achievements that are eligible for incentives in 20…:

1) ………………………………………………………………………………………………………

2) ………………………………………………………………………………………………………

.....................................................................................................................

A. Determine the revenue requirements to qualify for the incentive:

Currency: Vietnamese Dong

B. Determine the amount of corporate income tax eligible for preferential treatment:

Currency: Vietnamese Dong

I certify that the information provided above is accurate and I am legally responsible for the accuracy of this information.