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MINISTRY OF
SCIENCE AND TECHNOLOGY - MINISTRY OF FINANCE
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SOCIALIST REPUBLIC
OF VIETNAM
Independent - Freedom – Happiness
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No.
12/2016/TTLT-BKHCN-BTC
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Hanoi, June 28,
2016
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JOINT CIRCULAR
ON
GUIDELINES FOR THE ALLOCATION AND MANAGEMENT OF THE SCIENCE AND TECHNOLOGY
DEVELOPMENT FUND IN ENTERPRISES
Pursuant to the Law on corporate income tax no
14/2008/QH12 dated June 03, 2008 and the Law No. 32/2013/QH13 dated June 19, 2013
on amendments to the Law on corporate income tax;
Pursuant to the Law on Science and Technology
No. 29/2013/QH13 dated June 18, 2013;
Pursuant to the Government’s Decree No.
95/2014/ND-CP dated October 17, 2014 on investment and financial governance for
science and technology activities;
Pursuant to the Government’s Decree No.
218/2013/ND-CP dated December 26, 2013 on details and guidelines for the
implementation of certain articles of the Law on corporate income tax;
Pursuant to the Government’s Decree No.
20/2013/ND-CP dated February 26, 2013 on the functions, missions, authority and
organizational structure of the Ministry of Science and Technology;
Pursuant to the Government’s Decree No.
215/2013/ND-CP dated December 23, 2013 on the functions, missions, authority
and organizational structure of the Ministry of Finance;
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Chapter I
GENERAL
Article 1. Scope and regulated
entities
1. Scope: This Circular
provides guidelines for the allocation and management of the science and
technology development fund in enterprises (referred to as the Fund).
2. Regulated entities:
Enterprises that are incorporated as per the law (referred to as the
enterprises), government agencies and other relevant entities.
Article 2. Terminology
In this Circular, the following words and phrases
are construed as follows:
1. “Corporate regulation on
science and technology” is formulated by enterprises and primarily comprised of
the definition of missions, implementation, assessment and acceptance of
science and technology missions that enterprises carry out. Guidelines for the
corporate regulation on science and technology are available in Form No. 01
enclosed to this Circular.
2. "Local and foreign
organizations and enterprises cooperating in research” are incorporated as per
the law and have the functions, missions and capacity of research and
production in accordance with the sectors in which research cooperation is
required.
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Article 3. Organization of the
Fund
1. The fund can be organized
in one of these manners:
a) Be established as an organization without
judicial personality and directly under an enterprise.
b) Be not established as an organization and
operated by the enterprises’ officials who conduct multiple concurrent tasks.
2. The organization of the
Fund is left to the discretion of competent individuals of the enterprises.
3. When an enterprise
establishes the Fund in one of the manners defined in Section 1 of this
Article, the enterprise shall deliver its written decision on establishment of
the Fund to the Department of Science and Technology in the province or
centrally-affiliated city, where the enterprise is mainly based, in 30 days
upon the issuance of such decision.
The enterprise shall also submit its regulation on
science and technology and its regulation on allocation and use of the fund to
the tax authority administering the area where the enterprise is mainly based
upon the enterprise's submission of the report on the initial allocation of the
fund.
Article 4. Financing of the
Fund
The fund shall be financed by the following
sources:
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a) State-owned enterprises shall extract 3% to 10%
of the incomes on which the corporate income tax is levied to establish the
Fund. The extraction rate shall be subject to the state enterprise's capacity
and desire to allocate finances to scientific and technological activities;
b) Enterprises not defined in Point a, Section 1 of
this Article shall at their disposal decide the extraction rate, which shall
not exceed 10% of the taxed corporate incomes;
c) The incomes on which the corporate income tax is
levied shall be determined in accordance with the Law on corporate income tax
and guiding documents.
2. The corporation or parent
enterprise transfers part(s) of its science and technology development fund to
the relevant funds of its subsidiaries or affiliates or vice versa.
Chairperson of the Board of Directors, Chairperson
of the Members’ Council, General Director or Director (i.e. the legal
representative of the enterprises) shall decide the rate of transfer of the
science and technology development fund of the corporation or parent enterprise
to those of its subsidiaries or affiliates and vice versa on the basis of the
fund extraction ratio, the demands for investment in scientific and
technological activities of subsidiaries and affiliates, and the entire
system’s needs and plans on science and technology development.
The transfer of the Fund, as stated in this
Section, shall only be applicable for subsidiaries or affiliates that are fully
owned by the parent enterprise.
The transfer of the Fund, as stated in this
Section, shall not be applicable in these events:
- Foreign-invested enterprises
transfer their fund to that of the overseas parent enterprise;
- The parent enterprise in
Vietnam transfers the Fund to those of overseas subsidiaries.
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1. Use efficiently the Fund
that the enterprise establishes and that subsidiaries and affiliates contribute
to as per regulations.
2. Formulate and present to
competent individuals of the enterprise, for approval, the plans on annual
spending and contributions of the Fund, on the enterprise’s scientific and
technological activities (including scientific and technological activities of
subsidiaries and affiliates if the Fund belongs to the corporation or parent
enterprise) and on expenditure for the management of the Fund.
3. Manage and use the Fund for
scientific and technological activities of the enterprise (including scientific
and technological activities of subsidiaries and affiliates if the Fund belongs
to the corporation or parent enterprise) in accordance with the approved plan
on scientific and technological activities.
4. Inspect and assess the
implementation of scientific and technological activities that have been
financed by the Fund.
5. Formulate and present to
competent individuals of the enterprise, for approval, the transfer of one Fund
to another as stated in Section 2, Article 4 of the Circular.
6. Formulate and present to the
enterprise’s personnel in highest authority, for approval, the commission or
acceptance of the science and technology development fund(s) in trust to or
from other enterprises with the aim of performing science and technology
missions in line with the enterprise's activities in science and technology.
7. Formulate and present to
competent individuals of the enterprise the details of activities in support of
the enterprise’s science and technology development.
8. Cooperate with state
management authorities in inspecting the establishment, organization,
management and use of the Fund as per the law.
9. Report the extraction,
transfer and use the Fund to the tax authority and Department of Science and
Technology administering the zone where the enterprise's head office bases.
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1. Chairperson of the Board of
Directors or Chairperson of the Members’ Council or General Director or
Director (i.e. the legal representative of an enterprise) shall decide the
establishment of a Council of science and technology of the enterprise, which
selects and appraises the contents and expenditure of science and technology
missions, on the basis of the nature and scale of the enterprise’s missions in
science and technology as defined in the enterprise’s regulation on science and
technology.
2. Members of a Council of
science and technology shall be experienced in corporate management and finance
and be expert at sciences and technologies at which the missions aim.
A council of science and technology of the
enterprise, which appraises or finalize science and technology missions, must
be comprised of at least 50% of its members who are not working for the agency
presiding at the missions. Moreover, at least 02 of its members must be
prestigious specialists whose qualifications and expertise fit the field(s) of
science and technology under their consultancy. Other members shall be
managerial personnel of the enterprise.
If members of a council of science and technology
of the enterprise are unqualified, the enterprise can recruit specialists to
carry out assessment(s).
The quantity of members in a council of science and
technology shall be subject to the scale and complexity of science and
technology missions; however, there must be at least 05 members.
3. Each council of science and
technology of an enterprise may provide counsels for one or some missions in
science and technology (if such missions occur in the same sector).
4. The works of a council of
science and technology of an enterprise shall be, in principle, open,
transparent, independent and unbiased. A council and its members shall give its
propositions and opinions, respectively, in writing. Members of a Council shall
be held liable for their counsels.
5. The regulation on science
and technology of the enterprise shall define the procedure of appraisal and
verification of contents and expenditure of science and technology missions and
finalization of the missions.
6. A council of science and
technology of an enterprise shall evaluate and finalize the result of science
and technology missions of the enterprise in accordance with the enterprise’s
regulation on science and technology.
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ALLOCATION OF THE FUND
Article 7. Implementation of
science and technology missions
The fund shall finance the following missions in
science and technology:
1. Science and technology
missions at national level, ministerial level and provincial level.
The fund shall allocate reciprocal finances in sync
with the progress of science and technology missions at national level,
ministerial level and provincial level in line with the signed contracts for
science research and technology development and the approved explanations of
the missions.
2. Science and technology
missions of the enterprises.
a) Science and technology missions of the
enterprises as per their regulation on science and technology.
Science and technology missions with latent risks
against the national interests, national defense, national security, environment,
human life and health, prior to the phases of production and application, shall
be implemented according to the Circular No. 02/2015/TT-BKHCN dated March 06,
2015 by the Minister of Science and Technology on the evaluation and
verification of the result of science and technology missions that do not
funded by the state budget;
b) Expenditure of science and technology missions,
whose contents have been verified by the Council(s) of science and technology
of the enterprises, shall be subject to the regulation on allocation and use of
the Fund;
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d) The assignment of allocations to finished
products or to segments of science and technology missions shall be defined in
the enterprise's regulation on science and technology and be permissibly
governed by the Joint Circular No. 27/2015/TTLT/BKHCN-BTC dated December 30,
2015 by the Ministry of Science and Technology and the Ministry of Finance on
the assignment of finances to state-funded missions in science and technology.
Article 8. Support to the
development of science and technology of enterprises
1. Physical and technical
infrastructure for science and technology activities of the enterprises: Set up
research and development organizations and centers for analysis, testing,
experiment, inspection and calibration of products; information infrastructure
and database of the enterprises, summarization of science and technology
activities; spending on the maintenance and repair of physical and technical
facilities and equipment for science and technology activities; spending on the
development of science and technology; quality control systems of the
enterprises.
Investments into the research and development
organizations and centers for analysis, testing, experiment, inspection and
calibration of products, information infrastructure and database of the
enterprises, summarization of science and technology activities shall be
subject to the procedures and formalities of investment projects and be
validated by competent individuals of the enterprises as per regulations.
2. Purchase of rights of use
and ownership: Technology secrets; technical knowledge of technologies
transferred as technological plans, technology processes, technical designs,
technical solutions, formulas, technical parameters, drawings, technical
diagrams, computer software, data, production streamline solutions, technology
renovations, invention patents, useful solutions, plant varieties, industrial
designs, ideas, documents, research findings, domestic and foreign products
that support the enterprises' science and technology activities;
Technologies defined in the list of technology
transfer restriction shall only be actualized upon competent government
authorities' licensing of technology transfer(s).
Purchase(s) of the rights of use and ownership
shall be based on either of the following:
a) Explanations of science and technology missions
whose contents and expenditure have been appraised and verified by a Council of
science and technology according to the enterprise’s regulation on science and
technology;
b) Sales contracts or contracts for transfer of the
right(s) of use and/or ownership between the enterprise and entities holding
the right(s) of use and/or ownership.
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Purchase(s) of machinery and equipment with
transferred technologies shall be subject to the procedure and formalities of
investment projects and the approval of competent individuals of the
enterprises as per regulations.
4. Remunerations for
specialists hired or engagement in contracts with science and technology
organizations that carry out science and technology activities of the
enterprises.
5. Spending on innovative
activities.
a) Innovations endorsed by agencies and
organizations as per the Government’s Decree No. 13/2012/ND-CP dated March 02,
2012 on the regulation on innovation and in conformity to relevant laws.
b) When an enterprise employs the Fund, competent
individuals of the enterprise shall base on its regulation on science and
technology, labor contract(s) and collective bargaining agreement to decide
allocations for innovative activities endorsed as per regulations.
c) Allocations for innovative activities shall be
subject to Article 16 of the Government’s Decree No. 13/2012/ND-CP dated March
02, 2012 on the regulation on innovation.
6. Allocations for assessment,
experiment, standardization and quality control, advertisement and
commercialization of new products and technologies, registration of
intellectual property.
7. Allocations for the
implementation of projects or development of new products despite the failed
sale of such products or the stagnation of such projects due to objective
causes as determined by the Council of science and technology of the
enterprises.
Article 9. Training of
personnel in science and technology for the enterprises
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a) Training and certification by universities;
b) Training in research groups;
c) Training of specialists in sciences and
technologies that are prioritized, crucial or new;
d) Postgraduate research;
dd) Advanced training of expertise, knowledge and
managerial skills in science and technology.
2. Training shall be conducted
in short and long term domestically and abroad. Moreover, internship in
prestigious local and foreign organizations in science and technology shall be
provided. Also granted is the engagement in science and technology missions.
3. The enterprises shall be
responsible for formulating plans for training of personnel in science and
technology, for estimating allocations for annual training activities and for
obtaining approval of competent individuals of the enterprises.
4. Details of allocations for
the training of personnel in science and technology shall be defined in the
regulation on allocation and use of the Fund.
5. The quota of allocations
for the training of personnel in science and technology shall be governed by
current regulations of the Government on the quota of training expenditure.
Competent individuals of the enterprises shall formulate and define the quota
of their allocations on which a quota has not been set by competent government
authorities.
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1. Local and foreign
organizations, individuals and enterprises shall cooperate in the following
activities of science and technology: Surveys, search of partners, study of
demands of domestic and overseas technologies; joint research missions over
sciences and technologies that the government encourages and prioritizes.
2. Manners of cooperation in
science and technology
a) The enterprises shall cooperate with local and
foreign entities in science and technology in the following manners:
- Placement of orders with
research organizations for science research and technology development on a
contract basis;
- Transfer of technologies on
a contract basis;
- Training and enhancement of
qualifications in science and technology on a contract basis;
- Recruit of technology
innovation consultants on a contract basis;
- Cooperation in science and
technology studies with the aim of solving particular issues of science and
technology or pursuing sciences and technologies in a cluster of industries and
chains of production that augment the competitiveness of the enterprises;
b) The enterprises shall be responsible for
explaining science and technology missions in relation to the forms of
cooperation defined in Point a, Section 2 of this Article. Such science and
technology missions shall undergo the process of selection, appraisal of
content and expenditure and finalizing assessment as per the enterprises'
regulation on science and technology.
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Activities of research and application of science
and technology according to the lists of sciences and technologies that the
government encourages and prioritizes; for example, the list of hi-tech
technologies prioritized for investment and development and the list of hi-tech
products prioritized for development as per the Prime Minister's Decision No.
66/2014/QD-TTg dated November 25, 2014.
The enterprises shall conduct surveys, search for
partners and study demands for overseas technologies given priority according
to the Prime Minister's Decision No. 1069/QD-TTg dated July 04, 2014 on the
approval of state-funded programs for search and transfer of overseas
technologies towards 2020 as per regulations;
The enterprises shall carry out research missions,
in cooperation with foreign entities, by priority and with financial support
from the Government as per the Prime Minister's Decision No. 538/QD-TTg dated
April 16, 2014 on the approval of bilateral and multilateral research programs
in science and technology.
Article 11. Management of the
Fund
1. Spending on the management
of the Fund includes:
a) Salary, contributions to social insurance,
unemployment insurance and health insurance, and other regulated contributions;
b) Allowances for personnel holding concurrent
posts;
c) Rent of offices (if any);
d) Purchase and repair of office equipment and
assets for the operation of the Fund;
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e) Allocations for the activities of the Council(s)
of science and technology of the enterprise;
g) Payments for assessment specialists on hire for
the Council(s) of science and technology of the enterprise;
h) Business expenses for the implementation of
missions of the Fund;
i) Other payments in relation to the operation of
the Fund.
2. Competent individuals of
the enterprises shall decide the quota and ratio of allocations for the management
of the Fund.
Chapter III
FUND MANAGEMENT
Article 12. Financial
management for the Fund
1. Competent individuals of
the enterprises shall stipulate the management and use of assets, finance and
allocation quota of the Fund, approve the ratio of allocations for the
management of the Fund, validate the financial plan(s) and report(s) on
establishment, transfer and use of the Fund on annual basis.
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3. If a corporation or parent
enterprise using the Fund of its subsidiaries or affiliates or vice versa, the
corporation or parent enterprise may decide to transfer the Fund to finance science
and technology activities of the entire system. Such decision(s) must specify
the year that the Fund transferred was established.
4. Allocations from the Fund
must be fully evidenced in writing as per regulations.
5. Guaranteed allocations from
the Fund for science and technology development of the enterprises shall not be
recorded as tax-deductible expenses in a tax period.
6. If the enterprises need to
overspend the Fund, above its current balance, on science and technology
activities anytime in a year, the differential sum(s) between the actual
spending and the Fund’s allocations shall be picked out or extracted from
finances of the Fund for subsequent years to cover the insufficient amount or
be recorded as tax deductible expenses in the relevant tax period.
Article 13. Management of
assets that the Fund creates
1. The enterprises must
document the fixed assets as stated in Section 1, Section 2 and Section 3,
Article 8 of the Circular to have them supervised and managed as per
regulations of the Ministry of Finance. Depreciation of fixed assets shall not
be required. The enterprises shall monitor and manage other assets and have
them used for proper purposes.
2. The enterprises’ repair and
renovation of fixed assets in which the Fund has been invested shall be
financed by their fund for science and technology development.
3. If fixed assets, in which
the Fund has been invested, have yet to depreciate fully but are assigned to
the enterprises’ business operations, the remaining value of the fixed assets
shall be recorded as other incomes and be depreciated as tax-deductible
expense.
4. If fixed assets, whose
creation is a result of the enterprises' science and technology development
missions as stated in Section 2, Article 7 of the Circular, are assigned to the
enterprises' business operations, the remaining value of the fixed assets shall
be recorded as other incomes and be depreciated as tax-deductible expense.
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6. The liquidation of assets
that avail the science and technology activities of the enterprises shall be
subject to current regulations.
Article 14. Settlement of the
Fund being unused, underused or misused
1. The allocated amounts of
the Fund shall include all the sums finalized in accounting records, the sums
advanced, recorded in writing but unsuited for finalization for the
implementation of activities of the Fund as defined in Article 7, Article 8,
Article 9, Article 10 and Article 11 of this Circular, and the sums transferred
from the Fund as stated in Section 2, Article 4 of the Circular.
2. Contributions to and
allocations from the Fund shall be subject to the first in first out principle.
3. If total allocations and
contributions of the national science and technology development fund or the
science and technology development funds of the governing ministries and
provinces and cities where an enterprise registers to pay taxes do not reach
70% of the fund contributed and additionally financed by transfers (if any) in
05 years since the original contribution to such fund, the contributing
enterprise shall incur a corporate income tax, which is levied on the remaining
amount in the Fund, and an interest on such corporate income tax.
The rate of the corporate income tax redeemed shall
be the tax rate imposed on the enterprise during the establishment of the Fund.
The rate of interest on the redeemed tax, which is
levied on the unused amount of the Fund, shall be the rate of interest on the
1-year treasury bond (or the 1-year treasury bill) in effect upon the
redemption. Moreover, the interest shall be imposed in two years.
4. If the enterprise misuses
the Fund during the establishment of the latter, the enterprise shall incur a
corporate income tax levied on the part of incomes it has contributed to the
Fund and has misused. Also incurred is an interest on such corporate income
tax.
The rate of the corporate income tax redeemed shall
be the tax rate imposed on the enterprise during the establishment of the Fund.
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5. The enterprise shall not
record the interest on the corporate income tax payable as a tax deductible for
its taxable incomes.
6. If an enterprise benefiting
from tax incentives (i.e. preferential tax rate, tax deduction, tax exemption)
does not use any or less than 70% of the Fund or misuse it, the enterprise
shall incur a tax on the incomes on which tax incentives have been granted upon
its contribution to the Fund. Also incurred is an interest as per regulations.
7. The amount in the Fund,
none or less than 70% of which the enterprise has used in 05 years upon the
establishment of the fund, or the misused amount shall be settled in line with
the business type of the enterprise in the following manner:
a) For state-owned enterprises
- A state-owned enterprise’s
use of the Fund is subject to Point a, Section 1, Article 4 of this Article. If
the none or less than 70% of the Fund contributed and additional financed by
any transfers is used, the enterprise shall dispense the unused or underused
part(s) of the Fund to the national science and technology development fund or
the science and technology development funds of the governing ministries and
provinces and cities where the enterprise registers to pay taxes.
The amount dispensed to the national science and
technology development fund or the science and technology development funds of
the governing ministries and provinces shall be at least 20% of the Fund, none
or less than 70% of which has been used, of the Fund contributed and
additionally financed by any transfers.
- If total allocations and
contributions of the national science and technology development fund or the
science and technology development fund(s) of the governing ministry or
province where the enterprises register to pay taxes do not reach 70% of the
fund contributed and additionally financed by transfers (if any), the
enterprises shall incur a corporate income tax, which is levied on the
remaining amount in the Fund, and an interest on such corporate income tax.
- The remaining amount in the
Fund, after the regulated obligations are paid, shall be at the enterprise's
disposal as per regulations.
* Example 1:
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In 2016, Corporation X contributed 10%, i.e. VND 20
billion, to its science and development fund that was newly established. In
2021, Corporation X spent only VND 10 billion from the science and technology
development fund (i.e. 50% of the Fund as contributed). The remaining amount in
the Fund, as the enterprise has used less than 70%, is VND 10 billion (i.e. 20
billion minus 10 billion). A part of such amount must be dispensed to the
national science and technology development fund or the science and technology
development funds of the governing ministries and provinces and cities where
the enterprise registers to pay taxes.
+ If Corporation X dispenses 40% of the underused Fund,
i.e. VND 4 billion (40% x 10 billion), to the national science and development
fund. Therefore, the total sum that Corporation X has used and dispensed to the
national science and technology development fund is: 14 billion (i.e. 10
billion + 4 billion), which makes up 70% of the Fund contributed; therefore,
the enterprise does not incur a corporate income tax and continues to use its
Fund as per regulations since its Fund retains VND 6 billion (20 billion - 14
billion).
+ If Corporation X dispenses 20% of the underused
Fund, i.e. VND 2 billion (20% x 10 billion), to the national science and
development fund. Therefore, the total sum that Corporation X has used and
dispensed to the national science and technology development fund is: VND 12
billion (10 billion + 2 billion), which makes up 60% of the Fund contributed
(less than 70% of this Fund); thus, Corporation X must pay a corporate income
tax on the remaining amount of VND 8 billion in the Fund (20 billion - 12
billion) and an interest on such corporate income tax as follows:
The corporate income tax, which is payable since
the sum used and dispensed to the national science and technology fund does not
make up 70% of the Fund (the rate of corporate income tax during the
establishment of the Fund in 2016 was 20%) shall be:
VND 8 billion x 20% = VND 1.6 billion.
The interest on the corporate income tax (if the
rate of interest on the 1-year treasury bond is 12%) shall be:
VND 1.6 billion x 12% x 2 years = VND 384 million.
- If the state-owned
enterprise misuses the Fund, it shall incur a corporate income tax levied on
the part of incomes it has contributed to the Fund and has misused. Also
incurred is an interest on such corporate income tax.
b) For other enterprises
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- If an enterprise does not or
does contribute to the provincial science and technology development funds but
none or less than 70% of the funds are used (including any contributions to
such funds) or the funds are misused, the enterprise shall incur a corporate
income tax on the amount of incomes, which the enterprise has contributed to
the funds but has not used, has underused (less than 70%) or misused, and an
interest on such corporate income tax.
* Example 2 (if the enterprise uses the Fund to an
inadequate degree):
Enterprise A states the following data in the
report on the establishment and use of the science and technology development
fund in 2012:
In 2016, Enterprise A contributed 10%, i.e. VND 2
billion, to its science and development fund that was newly founded. In 2021,
Enterprise A spent only VND 1.2 billion from the science and technology
development fund (i.e. 60% of the Fund as contributed). The remaining amount in
the Fund, as the enterprise has used less than 70%, is VND 0.8 billion (2
billion - 1.2 billion).
+ If Enterprise A dispenses VND 200 million (0.2 billion)
to the provincial science and technology development fund(s). Therefore, the
total sum that Enterprise A has used and dispensed to the provincial science
and technology development fund(s) is: 1.4 billion (i.e. 1.2 billion + 0.2
billion), which makes up 70% of the Fund contributed; therefore, the enterprise
does not incur a corporate income tax on the remaining amount contributed to
its Fund, which is VND 0.6 billion (2 billion - 1.4 billion).
+ If Enterprise A dispenses none to the provincial
science and technology development fund(s), it shall incur a corporate income
tax on the amount of VND 0.8 billion and an interest on the corporate income
tax as follows:
The corporate income tax, which is payable since
less than 70% of the Fund has been used (the rate of corporate income tax
during the establishment of the Fund in 2016 was 20%) shall be:
VND 0.8 billion x 20% = VND 160 million.
The interest on the corporate income tax (if the
rate of interest on the 1-year treasury bond is 12%) shall be:
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* Example 3 (if the enterprises misuse the Fund):
In 2016, Enterprise B contributes VND 800 million
to its science and technology development fund that was newly founded. At the
end of 2016, the enterprise spent VND 300 million from the Fund. Every year,
the enterprise reported its contribution and use of the Fund. A tax authority,
on May 05, 2017, exposed that the enterprise spent VND 50 million from the Fund
for an invalid purpose and had such incident recorded in writing. On May 10,
2017, the enterprise paid the fine to the state budget. The rate of fine for
tax deferral as per the Law on tax administration is 0.03% per day.
In such circumstance, the sum of tax and interest
payable is:
The corporate income tax, which is levied due to
the misuse of the fund (the rate of corporate income tax during the
establishment of the Fund in 2016 was 20%) shall be:
VND 50 billion x 20% = VND 10 million.
The number of days that the deferral fine is
imposed from December 31, 2016 to May 09, 2017 is 131 days.
The interest payable (according to the deferral
fine):
VND 10 million x 0.03% per day x 131 days = VND
393,000.
* Example 4 (if the enterprise benefits from
incentive(s) on the corporate income tax during the establishment of the Fund):
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In 2016, Enterprise C contributed 10%, i.e. VND 2
billion, to its science and development fund that was newly founded. In 2021,
Enterprise C spent only VND 1.2 billion from the science and technology
development fund (i.e. 60% of the Fund as contributed). The remaining amount in
the Fund, as the enterprise has used less than 70%, is VND 0.8 billion (2 billion
- 1.2 billion).
It is assumed that the enterprise was granted with
the preferential corporate income tax rate of 10% and the reduction of its
corporate income tax by 50% upon its contribution to the Fund in 2016. Because
the enterprise has used less than 70% and has dispensed none to the provincial
science and technology development fund(s), it incurs a corporate income tax on
its underused contribution and an interest on the corporate income tax as
follows:
The corporate income tax that the enterprise incurs
for its use of less than 70% of the Fund shall be:
VND 0.8 billion x 10% x 50% years = VND 40 million
The interest on the corporate income tax (if the
rate of interest on the 1-year treasury bond is 12%) shall be:
VND 40 million x 12% x 2 years = VND 9.6 million.
* Example 5:
Enterprise D contributed VND 2 billion, in 2016,
and VND 2.5 billion, in 2017, to its science and technology development fund.
If Enterprise D spends VND 1.8 billion, i.e. 90% of the 2016's contribution to
the Fund, by 2012, the remaining worth of the Fund as per the year of 2016 is
VND 0.2 billion (as the enterprise has used 90% of the contribution to its
science and technology activities). The enterprise shall continue allocating
the fund to its science and technology activities in subsequent years according
to the first in first out principle without incurring either a tax or an
interest.
If the enterprise does not allocate the fund to
science research in 2022, the unused amount of VND 2.5 billion, as contributed
in 2017, shall result in the imposition of a corporate income tax and a
deferral interest. However, the unused amount of VND 0.2 billion, as
contributed in 2016, shall not incur any tax or deferral interest.
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If a transferee enterprise uses none or less than
70% of its Fund (including transfers) or misuses such fund, the transferee
enterprise shall incur a corporate income tax plus interest as regulated to the
state budget. If the transferee enterprise benefits from corporation income tax
incentive(s) upon its contribution to its Fund, the corporate income tax
redeemed shall be:
- The corporate income tax
levied on the original value of the Fund shall be determined according to tax
incentives granted to the transferred enterprise upon its contribution to such
Fund.
- The corporate income tax
levied on fund transfers from other enterprises shall be determined according
to the rate of corporate income tax imposed on the transferred enterprise upon
the receipt of such transfers.
The unused or misused transfers shall be defined
according to the proportion of such transfers to the value of the Fund that
includes transfers.
* Example 6:
In 2016, Corporation E contributed totally VND 4 billion
to its science and technology fund and received a transfer of VND 1 billion
from its subsidiaries. The total contribution to the Fund in 2016 was VND 5
billion. In 2021, the corporation spent only VND 3 billion from the science and
technology fund (i.e. 60% of the Fund as contributed). The underused amount in
the Fund, as the enterprise has used less than 70%, is VND 2 billion (5 billion
- 3 billion).
It is presumed that Corporation E was granted the
preferential rate of corporate income tax of 10% in 2016.
The corporate income tax on the fund, less than 70%
of which was used, shall be determined as follows:
+ The corporate income tax on the unused original
amount in the Fund of the transferee enterprise shall be:
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+ The corporate income tax on the unused transfer
to the Fund of the transferee enterprise shall be:
VND 2 billion x 1/5 x 20% = VND 80 million
Total corporate income tax that the enterprise
incurs for its use of less than 70% of the Fund shall be:
VND 160 billion + VND 80 billion = VND 240 million
The interest on such corporate income tax (if the
rate of interest on the 1-year treasury bond is 12%) shall be:
VND 240 million x 12% x 2 years = VND 57.6 million.
Article 15. Request of
financial supports from science and technology development funds of the
country, ministries and local authorities
1. When in need of finances
for their science and technology missions, the enterprises that have
contributed to the science and technology development funds of the country,
ministries or local bodies, as stated in Point a and Point b, Section 7,
Article 14 of the Circular are entitled to request financial supports from such
science and technology development funds.
2. The science and technology
development funds of the country, ministries and local bodies, which have
received external contributions, shall provide financial supports equivalent to
such contributions and prioritize extra aids within the capacity of such funds
according to the cost estimates of the said science and technology missions.
The financial supports and extra aids from the science and technology
development funds of the country, ministries and local bodies shall be managed
and supervised in accordance with the operational regulations of such funds.
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a) Procedure:
- An enterprise having
contributed to the science and technology development funds of the country,
ministries and local bodies as stated in Point a and Point b, Section 7,
Article 14 of the Circular shall prepare and submit its application to such
funds;
- The said funds shall receive
the application directly at their premises or by post. The reception employees
of the funds shall stamp a mark of receipt on an application manually
submitted, write the time of receipt, record the quantity of documents included
in the application and input data into the administrative journal of the funds.
Otherwise, an application delivered by post shall be stamped with a receipt
mark and inputted into the administrative journal of the funds.
b) Submission:
The application shall be either submitted manually
at the premises of the science and technology development funds of the country,
ministries or local bodies or delivered by post;
c) Content and quantity of the application:
- Content of the application:
The written request for financial support(s) from the science and technology
development funds of the country, ministries and local bodies in line with
contributions to such Fund; the explanation(s) and estimate of expenditure for
science and technology missions;
- Quantity of the application:
01 set.
d) Processing time: At most 45 working days upon
the receipt of the full application for financial supports (not including the
time for the enterprises to correct errors and supplement documents)
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1. When an active enterprise
undergoes changes in ownership, consolidation or merger, the enterprise newly
founded through the change of ownership or consolidation or the acquiring
enterprise shall succeed to and assume responsibilities for the management and
allocation of the Fund that exists prior to such change, consolidation or
merger.
2. If an active enterprise's
Fund is not depleted upon the division of such enterprise, the enterprises
newly established through such division shall succeed to and assume
responsibilities for the management and allocation of the Fund that exists
prior to the division. The enterprises are given discretion in the
apportionment of their Funds; however, they shall inform tax authorities before
the process of apportionment.
Article 17. Reporting of
contributions, transfers and allocations of the Fund
The enterprises shall make annual reports on
contributions, transfers and allocations of their Fund according to Form No. 2 enclosed
to this Circular.
If the Fund of a corporation or parent enterprise
incorporates transfers from the funds of its subsidiaries and affiliates or
vice versa, the enterprise receiving transfers and allocating the Fund shall
report the transfers and allocations of the Fund that incorporates transfers.
Such reports must indicate the years when contributions and transfers to the
Fund occur.
Reports on contributions, transfers and allocations
of the Fund shall be submitted to the authorities defined in Section 1, Article
1 of the Government's Decree No. 95/2014/ND-CP dated October 17, 2014 on
investment and financial regulations for science and technology activities. The
reports shall be submitting upon the filing of the finalization return on the
enterprise's annual corporate income tax.
Chapter IV
IMPLEMENTATION
Article 18. Effect and
implementation
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2. Upon the effect of this
Circular, the following documents shall lose effect:
a) Decision No. 36/2007/QD-BTC dated May 16, 2007
by the Ministry of Finance on the promulgation of the Regulation on the organization
and operation of science and technology development funds of organizations,
individuals and enterprises;
b) Circular No. 15/2011/TT-BTC dated February 09,
2011 by the Ministry of Finance on guidelines for the establishment,
organization, operation, management and allocation of science and technology
development funds of the enterprises;
c) Circular No. 105/2012/TT-BTC dated June 25, 2012
on amendments to the Circular No. 15/2011/TT-BTC dated February 09, 2011 by the
Ministry of Finance on guidelines for the establishment, organization,
operation, management and allocation of science and technology development
funds of the enterprises;
d) Article 10 of the Circular No. 78/2014/TT-BTC
dated June 18, 2014 by the Ministry of Finance on guidelines for the
Government’s Decree No. 218/2013/ND-CP dated December 26, 2013 on details and
guidelines for the implementation of the Law on corporate income tax.
dd) Form No. 03-6/TNDN enclosed to the Circular No.
156/2013/TT-BTC dated November 06, 2013 by the Ministry of Finance on
guidelines for the implementation of certain articles of the Law on tax
administration; the Law on amendments to certain articles of the Law on tax
administration and the Government’s Decree No. 83/2013/ND-CP dated July 22,
2013.
3. The enterprises that have
established and contributed to the Funds according to previous legislative
documents shall manage and allocate such Funds as per this Circular upon its
effect.
4. If legislative documents
named in this Circular are amended or replaced, new documents shall prevail.
5. Difficulties that ensue
shall be reported to the Ministry of Science and Technology and the Ministry of
Finance for timely guidance./.
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p.p. MINISTER
OF FINANCE
DEPUTY MINISTER
Do Hoang Anh Tuan
p.p. MINISTER OF
SCIENCE AND TECHNOLOGY
DEPUTY MINISTER
Tran Viet Thanh
APPENDIX
FORMS
(Enclosed to the Joint Circular No. 12/2016/TTLT-BKHCN-BTC dated June 28,
2016 by the Ministry of Science and Technology and the Ministry of Finance)
1. Form No. 01: The enterprise's
regulation on science and technology/
2. Form No. 02: The report on
the enterprise’s contributions, transfers and allocations of the science and
technology development fund.
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[NAME OF THE
ENTERPRISE]
SCIENCE AND TECHNOLOGY DEVELOPMENT FUND
SOCIALIST REPUBLIC
OF VIETNAM
Independent - Freedom - Happiness
.......
… [place], … … … [date]
THE
REGULATION ON SCIENCE AND TECHNOLOGY OF THE ENTERPRISE
- Pursuant to the Circular
…
- Pursuant to the Regulation
on the organization and operation of the Science and Technology Development
Fund of the enterprise as enclosed to the Decision No. …;
- Pursuant to ...
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Article 1. Allocation of the science and
technology development fund of the enterprise
The allocations from the science and technology
development fund of the enterprise (referred to as the Fund) shall be of use
for the following activities of science and technology:
1. Implement the science and
technology missions.
2. Support the development of
science and technology in the enterprise.
Article 2. Procedure for implementation of
science and technology missions
1. Procedure for
implementation of science and technology missions:
The council of science and technology of the
enterprise (referred to as the science and technology council) shall select,
appraise and finalize the missions in science and technology as follows:
a. Proposal:
- Individuals (i.e. principal
investigators) and units (i.e. lead agencies) make the proposal sheets and
presentations of the science and technology missions in accordance with the
demands for science research and technology application for the enterprise's
business operations.
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- The fund lists the science
and technology missions registered, recommends members of the Council of
science and technology and presents such information to the Chairperson of the
Fund for a decision to establish the Council.
- The fund prepares the
meeting of the council of science and technology: relevant documents, time,
location, invitations to members of the Council.
- The council of science and technology
holds the meeting, evaluates recommendations and endorses or rejects the
missions.
- The agenda of the Council
for selection of works includes:
▪ Secretary of the Council
reads out the written decision on the establish of the Council for selection of
works, introduces its members and participants.
▪ Chairperson of the Council
presides at the meeting.
▪ Principal investigator and
lead agency briefly present the science and technology mission.
▪ Members of the Council
discuss and evaluate the works via selection sheets that are then given to the
secretary.
▪ Principal investigator and
lead agency respond to any comments of the Council.
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▪ Secretary of the Council
summarizes the opinions of its members and the conclusion of the Chairperson of
the Council and makes a written record of the Council’s meeting.
- Principal investigator and lead agency resend
their presentations of the missions, as revised according to the Council’s
advices, to the Fund.
c. Verification:
- The fund designates
functional unit(s) to verify the expenditure of the science and technology
missions, which the council of science and technology has recommended, then to
competent persons of the enterprise for approval.
- Competent persons of the
enterprise consider and approve the implementation of the science and
technology missions.
- A decision on approval of a
science and technology mission indicates:
▪ The information on the
science and technology mission approved for implementation: Names of the
mission, principal investigator and lead agency.
▪ Total expenditure of the
mission, which specifies allocations from the science and technology development
fund and the progress of disbursement.
▪ Duration of the mission and
time of finalization.
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- The fund informs the
principal investigator and lead agency of the selection of the mission.
d. Implementation
- Individuals and units
designated to the science and technology missions carry out the approved plan.
Make recommendations and suggestions to the Fund if problems ensue.
- The fund supervises the implementation
of the science and technology missions.
dd. Finalization:
- Principal investigator and
lead agency prepare and send the acceptance report and cost finalization
documents of the science and technology missions to the Fund.
- The fund summarizes science
and technology missions for finalization, recommends members of the council of
science and technology for finalization of works and presents such information
to the Chairperson of the Fund for a decision to establish the council.
- The fund prepares the
meeting of the council of science and technology for finalization of works:
relevant documents, time, location, invitations to members of the Council.
- The council of science and
technology appraises the result of the missions and makes acceptance reports to
the Fund.
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▪ Secretary of the Council
reads out the decision on the establishment of such Council and introduces the
members of the Council and participants.
▪ Chairperson of the Council
presides at the meeting.
▪ Principal investigator and
lead agency present the brief version of the report on finalization of the
science and technology missions.
▪ Members of the Council
discuss and appraise the works via appraisal sheets that are then given to the
secretary.
▪ Principal investigator and
lead agency respond to any comments of the Council.
▪ Basing on the comments of
the members of the Council, the Chairperson of the Council concludes the
science and technology missions or remarks on further revisions.
▪ Secretary of the Council
summarizes the opinions of its members and the conclusion of the Chairperson of
the Council and writes a record of the Council’s meeting.
▪ Principal investigator and
lead agency send the cost finalization documents and acceptance report, as
revised according to the Council’s advices, to the Fund.
- The fund reviews the full
cost finalization documents and acceptance report of the science and technology
missions and send them to relevant functional divisions then to the Chairperson
of the Fund for approval.
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- A council of science and
technology for verification and finalization of works shall consist of at least
5 individuals. One or two of its members shall be assessors who are experienced
in corporate management and finance and possess expertise in sciences and
technologies that the science and technology missions aim at. The establishment
of a science and technology council is at the discretion of the Chairperson of
the Fund.
- The enterprise may hire
external specialists to participate in assessments.
- Each council of science and
technology may provide counsels for one (01) or some science and technology
missions (if such missions occur in the same field).
- A council of science and
technology for selection and finalization of works must be comprised of at
least 50% of its members who are not working for the lead agency presiding at
the works. Moreover, at least 2 of its members must be prestigious specialists
whose qualifications and expertise fit the field(s) of science and technology
under their consultancy. Other members shall be managerial personnel.
- A council of science and
technology for selection and finalization of works consists of: 01 chairperson,
(possibly 01 vice chairperson), 01 or 02 assessors, 01 secretary and other
members. The secretary of the Council shall be a member of the Fund, who is in
charge of preparing the meetings of the Council, taking meeting records,
reading out opinions given by absent members in writing and performing other
tasks.
- Principles of appraisal of
science and technology missions:
▪ Each member of the Council
comments on and grades a science and technology mission via an appraisal sheet.
▪ The average grade of the
science and technology mission shall be the sum of members’ grades divided by
the number of members attending the Council's meeting.
▪ If the grade in an appraisal
sheet differs from the average grade of the Council by 30%, such appraisal
sheet shall be null and discarded.
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+ Fail: average grade < 50
+ Pass: average grade at 50 to 69
+ Good: average grade at 70 to 89
+ Excellent: average grade at 90 to 100
- The members (particularly
assessors) of a Council, from the section to the finalization of a science and
technology mission, shall be unchanged. Otherwise, at most one third of the
original members may be changed.
Article 3. Assignment of science and technology
missions
- The allocations for science
and technology missions shall be assigned in either of these methods:
+ Missions whose allocations are assigned to
finished products;
+ Missions whose allocations are assigned to each
segment.
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+ Principal investigator and lead agency justify
and propose the assignment of allocations to finished products;
+ Products of science and technology of the
missions have been specified; primary quality criteria of such products, unit
of measurement, quality level or scientific requirements to attain; quantity or
scale of potential products; locations of application;
- Missions not eligible for
assignment of allocations to finished products shall receive allocations
assigned by segment. Items whose allocations are and are not assigned shall be
defined according to the justifications of the principal investigator and lead
agency.
+ Items whose allocations are assigned
a) Manual labor, including: Labor of holders of
research titles; hiring of local and foreign specialists who cooperate in the
process of research and the implementation of missions.
b) Science seminars, domestic business trips for
research.
c) Investigations and data-collecting surveys.
d) Purchase of ingredients, fuels, materials and
parts for research activities, on which the enterprise has set an economic and
technical quota.
dd) Purchase of instruments, disposable objects,
energies, documents, records, data, newspapers, books, magazines for reference;
service outsourcing; stationery, contact information, printing and photocopying
of documents for research activities.
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+ Items whose allocations are not assigned
a) Purchase of ingredients, fuels, materials (e.g.
chemicals) and parts for research activities, on which the enterprise or
competent government authorities have not set a technical and economic quota.
b) Repair and purchase of fixed assets, including
the procurement of assets that are essential and of direct use to research
activities; repair of equipment and facilities that directly serve the research
activities.
c) Overseas trips.
Article 4. Effect and implementation
- This guideline takes effect
from the date that it is signed.
- Ensuing difficulties shall
be reported to the Fund for revision and to the person in highest authority of
the enterprise for promulgation./.
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Form
No. 02
12/2016/TTLT-BKHCN-BTC
REPORT
ON CONTRIBUTION, TRANSFER AND ALLOCATION OF THE SCIENCE AND TECHNOLOGY
DEVELOPMENT FUND
(Enclosed to the Corporate Income Tax Finalization Return No. 03/TNDN)
Tax period: from … to ….
Taxpayer’s name: ……………………………………………………………………………….
Taxpayer identification code:
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I. Contribution to the science and technology
development fund in the tax period:
1. Level of contribution: …………………………….
2. Amount contributed: VND
………………………..
II. Supervision of transfers and allocations of
the science and technology development fund in previous and current tax
periods:
No.
Year of
contribution
Level of
contribution in the tax period
Amount
contributed in the tax period
Amount of
transfers received in the tax period
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Amount
allocated in the last tax period
Amount
allocated in this tax period
Amount
forwarded to subsequent tax periods
(1)
(2)
(3)
(4)
(5)
(6)
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(8)
(9)=(4)+(5)-(6)-(7)-(8)
1
…
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2
….
...
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…..
…..
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Documents enclosed:
- List of contracts for
science research and technology development;
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- List of science and
technology activities of the Fund in the tax period.
TAX AGENCY’S EMPLOYEE
Full name:
License of practice no: … …….
……… … … [date]
TAXPAYER or
LEGAL REPRESENTATIVE
OF THE TAXPAYER
(sign, write full name; write title and seal (if applicable))