The Tax Hub

The Vietnam Ministry of Finance has announced the signing of Decree No. 13/2019/ND-CP on 18 February 2019, which takes effect on 20 March 2019 and provides certain incentives for qualifying companies investing in R&D that have been granted science and technology enterprises certification. This includes a corporate tax exemption for four years followed by a 50% reduction in tax payable for nine years on income generated from the development or sale of products derived from scientific and technological results from R&D activities.

To be granted certification, a company must be established under the Vietnam enterprise law, must be able to create or apply scientific and technological results that have been evaluated and recognized by competent agencies, and at least 30% of the total turnover of the company must be derived from scientific and technological results. If the minimum 30% of turnover condition is not met for a year, the tax incentive will not apply for that year. If the minimum is not met for five consecutive years, certification will be withdrawn, except for newly established enterprises in the first five years.

Further to the direct tax exemption/reduction, certified science and technology enterprises are also eligible for an exemption or reduction in their land and water surface lease fees, investment credits from the State, preferential mortgage loans with reduced rates, import/export tax incentives, and others.