|
THE
GOVERNMENT
-------
|
SOCIALIST
REPUBLIC OF VIETNAM
Independence- Freedom- Happiness
------------
|
|
No.119/1999/ND-CP
|
Hanoi,
September 18, 1999
|
DECREE
ON A NUMBER OF FINANCIAL POLICIES AND
MECHANISMS ENCOURAGING ENTERPRISES TO INVEST IN SCIENTIFIC AND TECHNOLOGICAL
ACTIVITIES
THE GOVERNMENT
Pursuant
to the Law on Organization of the Government of September 30, 1992;
In order to encourage enterprises to invest in scientific and technological
activities with a view to renewing and innovating technologies, and raising the
product quality as well as business and production efficiency;
At the proposal of the Minister of Science, Technology and Environment,
DECREES
Chapter I
GENERAL PROVISIONS
Article 1.- Scope of regulation
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Scientific and technological activities to be
encouraged under this Decree include:
1. Research and development activities
(including basic research, applied research, experimental development) carried
out by enterprises on their own or under contracts with domestic and foreign
organizations and/or individuals;
2. Application of scientific and technological
achievements, renewal of technologies, manufacture of new products;
3. Scientific and technological services:
a/ Services requiring high technical skills such
as: instructions on installation and operation of technological lines,
restoration, repair and adjustment of machinery, equipment, experimental
instruments, measuring and control devices, scientific and technical equipment
with an automatically-controlled component.
b/ Data processing, computing and analysis in
direct service of research and development, control and test;
c/ Drawing up pre-feasibility and feasibility
study report;
d/ Activities relating to the protection of
industrial property and technology transfer rights, and to the application of
new technologies to production.
e/ Services of information, scientific and
technological consultancy, training of technicians, fostering and raising of
business administration knowledge.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
This Decree shall apply to enterprises of all
economic sectors operating under Vietnamese laws.
Chapter II
INCENTIVE POLICIES AND
MECHANISMS
Article 3.- Enterprise income tax rates
1. Enterprises operating under the Law on
Domestic Investment Promotion (amended) and conducting high-tech application
activities and/or providing scientific and technological services shall enjoy
the following enterprise income tax rates with regard to the income earned from
these activities:
a/ A tax rate of 25%;
b/ A tax rate of 20% for enterprises investing
in geographical areas struck with difficult socio-economic conditions;
c/ A tax rate of 15% for enterprises investing
in geographical areas struck with extremely difficult socio-economic
conditions.
2. Foreign-invested enterprises and foreign
parties to business cooperation contracts operating under the Law on Foreign
Investment in Vietnam and having investment projects in the fields of high-tech
application and development as well as scientific and technological services
shall enjoy an enterprise income tax rate of 20% for 10 years from the time
they commence their business and production activities.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
1. Enterprise income tax shall be exempt in the
following cases:
a/ Income earned from the performance of
research and development contract;
b/ Income earned from the performance of
contracts for technical services in direct support of agricultural production;
c/ Income earned from capital contributed with
the intellectual property rights, technical know-hows and/or technological
processes.
2. Enterprises eligible for preferential
treatment stipulated in this Decree shall not have to pay additional income tax
on scientific and technological activities as prescribed in Clause 1, Article
10 of the Law on Enterprise Income Tax;
3. Enterprises operating under the Law on
Domestic Investment Promotion (amended) and having projects for investment in
scientific and technological service activities; projects for investment in the
construction of new production lines, the expansion of production scope and/or
the renewal of technologies shall enjoy the following preferences:
a/ Being exempt from enterprise income tax on
the increased income of the first year and enjoying a 50% reduction of the
payable tax amount for four subsequent years on the income earned as the result
of new investment;
b/ Production and/or business establishments
located in geographical areas struck with difficult socio-economic conditions
shall be exempt from enterprise income tax on the increased income of the first
three years and enjoy a 50% reduction of the payable tax amount for five subsequent
yeas on the income earned is the result of new investment;
c/ Production and/or business establishments
located in geographical areas struck with extremely difficult socio-economic
conditions shall be exempt from enterprise income tax on the increased income
of the first four years and enjoy a 50% reduction of the payable tax amount for
seven subsequent years on the income earned as the result of new investment.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Foreign investors who use their shared income
for reinvestment shall be refunded with the paid enterprise income tax amounts
as prescribed in Article 34 of Decree No.30/1998/ND-CP of May 13, 1998 detailing
the implementation of the Law on Enterprise Income Tax;
Article 5.- Privileges concerning the
land use levy, land rent and land use tax.
1. If enterprises operating under the Law on
Domestic Investment Promotion (amended) and investment in scientific and
technological activities use their assigned or leased land for the construction
of scientific and technological research establishments; laboratory and
experimental offices, stations, farms and/or workshops, they shall be entitled
to the following privileges concerning the land use levy, land rent and land
use tax for such land area:
a/ For cases they are assigned land and have to
pay land use levy:
- Enjoying a 50% reduction of the land use levy;
- Being exempt from the land use levy if they
use the assigned land in geographical areas struck with difficult
socio-economic conditions or with extremely difficult socio-economic
conditions.
b/ For cases they lease land and have to pay
land rent:
- Being exempt from the land rent for six years
from the time they sign their land lease contract;
- If they lease land in geographical areas with
difficult socio-economic conditions they shall be exempt from the land rent for
15 years from the time they sign the land lease contracts;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
c/ For cases they are assigned land and have to
pay land use tax:
- Being exempt from the land use tax for six
years from the time they are assigned land.
- If they use the assigned land in geographical
areas with difficult socio-economic conditions they shall be exempt from the
land rent for 15 years the time they are assigned land;
- If they use the assigned land in geographical
areas with extremely difficult socio-economic conditions they shall be exempted
from the land rent throughout the project implementation duration.
2. For investors under the Law on Foreign
Investment in Vietnam investing in the scientific and technological field, if
they lease land for the construction of laboratories, trial production
workshops or for experiments and research they shall be entitled to privileges
prescribed by current law provisions on land rent for such land area.
Article 6.- Import tax privileges
Imported goods which are machinery, equipment,
raw materials and materials, scientific and technical equipment with an
automatically-controlled component, test samples, measuring and experimental
instruments in direct service of research and development projects and
contracts which have not yet been domestically manufactured or have been
domestically manufactured but fail to meet the requirements, shall be exempt
from import tax.
Article 7.- Credit privileges
Enterprises operating under the Law on Domestic
Investment Promotion (amended) and engaged in activities mentioned in Article 1
of this Decree shall be entitled to borrow medium-term and long-term capital
loans with a preferential interest rate, up to 70% of their investment capital
may be borrowed from the Development Support Fund, the Export Support Fund and
the Scientific and Technological Development Support Fund.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Article 8.- Other incentive policies
1. Enterprises that use a technology being the
outcome of a scientific and technological research project funded with the
State budget (except for technologies which are defense and security secrets
and protected industrial property objects) shall only have to pay a remuneration
to the author who has invented such technology. The payable remuneration shall
be equal to 30% of the technology transfer price stipulated in Article 23 of
Decree No.45/1998 of July 1st, 1998 of the Government detailing
technology transfer.
2. The State shall provide support for
enterprises with a funding of not more than 30% of the total funding for the
execution of research projects to create new technologies for production and
business lines, which are prioritized and encouraged by the State and implemented
by the enterprises or in coordination with scientific institutions.
The Ministry of Science, Technology and
Environment shall assume the prime responsibility and coordinate with the
relevant ministries and branches in considering and deciding the amount of
support funding from the non-business scientific and technological budget.
3. Enterprises operating under the Law on State
Enterprises shall be entitled to deduct 50% of the increased after-tax income
earned from the application
of new technologies to reinvest in scientific
and technological activities and reward individuals and collectives inside and
outside the enterprises that have made meritorious contributions to the
research, creation and organization of the application of such new technologies.
The percentages of the reward amount and the amount to be reinvested in
scientific and technological activities shall be decided by the director, but
the reward amount must not exceed 60% of the deducted amount of money. The time
limit for deduction shall not exceed three years from the time the increased
income is generated.
Article 9.- Producers for consideration
of privileges
The procedures for considering tax and credit
privileges for projects regulated by this Decree shall comply with the
regulations in documents guiding the implementation of the Law on Domestic
Investment Promotion (amended).
In cases where a project is entitled to various
preferential levels stipulated in different legal documents it shall only be
entitled to the highest preferential level.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
IMPLEMENTATION PROVISIONS
Article 10.- Handling of violations
Organizations and individuals that violate the
stipulations of this Decree shall, depending on the nature and seriousness of
the violations and the consequences, be disciplined or administratively
sanctioned in accordance with the provisions of law; individuals who commit
serious violation shall be examined for penal liability and if any damage is
caused they shall to pay compensation therefor according to the provisions of law.
Article 11.- Guidance for implementation
The Minister of Science, Technology and
Environment and the Minister of Finance shall have to guide the implementation
of this Decree.
Article 12.- Implementation effect
This Decree takes effect 15 days after its
signing. The previous provisions contrary to the provisions of this Decree are
now annulled.
Article 13.- Responsibility for
implementation:
The ministers, heads of the ministerial-level
agencies, heads of the agencies attached to the Government, presidents of the
People’s Committees of
the provinces and centrally-run cities, chairmen of the managing boards,
general directors and directors of enterprises shall have to implement this
Decree.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
ON BEHALF OF
THE GOVERNMENT
PRIME MINISTER
Phan Van Khai