What are regulations on components of service costs for information technology services covered by state budget capital on-demand in Vietnam?

1. What are regulations on components of service costs for information technology services covered by state budget capital on-demand in Vietnam?

Pursuant to Article 4 of Circular 12/2020/TT-BTTTT stipulating regulations on components of service costs for information technology services covered by state budget capital on-demand as follows:

1. Service costs shall be calculated in accordance with Article 6 herein.

2. Service administrative and overhead costs (if any) shall be calculated in accordance with clause 2 of Article 8 herein.

3. Service maintenance costs (if any) shall be calculated in accordance with clause 1 of Article 8 herein.

4. Other costs related to the provision of services (such as costs of database creation; standardization, conversion for data input; input of data into database; training in use instructions; training provided for administrators or system operators; transmission line installation and lease; domain registration and retainer; hosting rental; server co-location; storage rental; notification messages; customer care hotlines) shall be calculated according to the provisions of clause 2 of Article 8 herein.

2. What are principles of calculation of service cost for information technology services covered by state budget capital on-demand in Vietnam?

According to Article 5 of Circular 12/2020/TT-BTTTT stipulating principles of calculation of service cost for information technology services covered by state budget capital on-demand as follows:

On-demand service cost shall be determined according to the following formula:

G_t = G_tdv + G_v + G_bt + G_k

Where:

- G_t: Cost of on-demand service cost (VND)

- G_tdv: Service cost (VND)

- G_v: Service administrative and overhead cost (VND)

- G_bt: Service cost (VND)

- G_k: Other cost related to provision of service (VND)

3. What are principles of calculation of service cost in Vietnam? 

According to Article 6 of Circular 12/2020/TT-BTTTT stipulating principles of calculation of service cost as follows:

1. The service cost shall be determined according to the following formula:

G_tdv = G_dv * n

Where:

- G_dv: Service cost corresponding to the payment period which is determined according to the plan specified in clause 2 and 3 of this Article.

- n: Number of payment installments during the period of outsourcing for on-demand services.

2. In case where the service cost corresponding to the payment installment is paid evenly at end of each installment, the formula shall be as follows:

Gdv =	Td * r * (1 + r)n - S * r	* (1 + GTGT)
	(1 + r)n - 1

Where:

- T_d: Construction and development cost for formation of services before value-added tax (VND). Construction and development cost for formation of services shall be calculated in accordance with Article 7 herein.

- r: Rental interest rate corresponding to the payment period/installment (%). r shall be determined as follows:

N: The average interest rate on Vietnam dong deposit for 1-year term and term corresponding to the number of years of rental of on-demand services (if there is no corresponding maturity term, accept the latest lower term than the number of years of rental of on-demand services) announced by 03 reputable domestic joint stock commercial banks in Vietnam within the latest 06 months before the time of approval of the plan on outsourcing for on-demand services.

k: Number of payment maturity installments/periods per each year of rental of on-demand service.

- S: Residual value of the asset constituting the service of the lessor at the end of the period of lease of on-demand service after the prescribed depreciation (using the straight-line depreciation method) (VND).

- GTGT: Value added tax.

3. In case where the service cost corresponding to the payment installment is paid evenly in the beginning of each payment installment/period, the formula shall be as follows:

Where: Values of the formula shall be determined in the same manner as prescribed in clause 2 of Article 9 hereof.

4. Example of calculation of the service cost is shown in the Appendix hereto.

Best Regards!