Are machinery and equipment serving the development of technology incubation in Vietnam subject to import duty exemption?

What is the definition of technology incubation in Vietnam?

According to Article 2 of Law on Technology Transfer 2017:

Interpretation of terms

For the purpose of this law, these terms are construed as below:

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11. Commercialization of findings on scientific research and technological development refers to the development, finishing, application, transfer or other activities related to findings on scientific research and technological development for profit purpose.

12. Technology incubation means a process to create, finish and commercialize technology from technology ideas, findings of scientific research and technological development or incomplete technology by means of assistance activities in technical infrastructure, resources and necessary services.  

13. Science and technology business incubation means a process to establish and develop science and technology enterprises by means of assistance activities in technical infrastructure, resources and necessary services.

14. Technology incubator or science and technology business incubator is a facility that provides conditions as required by law such as technical infrastructure, resources and necessary services to serve the technology incubation or the science and technology business incubation.

15. Technology innovation refers to the partial or full replacement of existing technology by another one with the aims of improving the productivity, quality and competitiveness of products.

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Thus, technology incubation means a process to create, finish and commercialize technology from technology ideas, findings of scientific research and technological development or incomplete technology by means of assistance activities in technical infrastructure, resources and necessary services. 

Technology incubator is a facility that provides conditions as required by law such as technical infrastructure, resources and necessary services to serve the technology incubation.

Are machinery and equipment serving the development of technology incubation in Vietnam subject to import duty exemption? (Image from the Internet)

Are machinery and equipment serving the development of technology incubation in Vietnam subject to import duty exemption?

According to Article 16 of Law on Export and Import Duties 2016:

Tax Exemption

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21. Imported dedicated machinery, equipment, components, supplies that cannot be domestically produced, scientific materials serving scientific research, technological development, technology incubation, incubation of science and technology enterprises and technological innovation.

22. Imported dedicated products directly serving national defense and security, the vehicles among which must be those that cannot be domestically produced.

23. Exports and imports serving assurance of social security, recovery from disasters, epidemics, and other special situations.

24. The Government shall regulate this Article.

Thus, if the imported goods are machinery, equipment, components, or supplies serving the development of technology incubation, they will be exempt from import duty.

What are the criteria for identifying machinery and equipment serving the development of technology incubation in Vietnam?

According to Article 7, Circular 14/2017/TT-BKHCN:

Criteria for identifying specialized machinery, equipment, parts and supplies serving development of technology incubation and science and technology enterprise incubation

Specialized machinery, equipment, parts and supplies serving development of technology incubation and science and technology enterprise incubation shall satisfy the following criteria:

1. They are used to directly serve technology incubation by technology incubators, and science and technology enterprise incubation by science and technology enterprise incubators.

2. They are included in the list of machinery, equipment, parts and supplies for performance of science and technology tasks by technology incubators and science and technology enterprise incubators that has been approved by a competent authority (regarding science and technology tasks funded by state budget) or by an investor (regarding the science and technology tasks not covered by state budget).

Therefore, the two criteria for identifying machinery and equipment serving the development of technology incubation in Vietnam are:

- They are used to directly serve technology incubation by technology incubators;

- They are included in the list of machinery, equipment, parts and supplies for the performance of science and technology tasks by technology incubators that has been approved by a competent authority (regarding science and technology tasks funded by state budget) or by an investor (regarding the science and technology tasks not covered by state budget).