Vietnam: Enterprises shall make reports on the use of their science and technology development funds annually

According to the Decree No. 95/2014/NĐ-CP of Vietnam’s Government, management of science and technology development funds of enterprises is prescribed as follows:

- Annually enterprises shall make reports on the deduction for, and use of their science and technology development funds and send them to the tax office where they register enterprise income tax payment and the provincial-level Science and Technology Department and Finance Department. Such report shall be submitted together with the enterprise income tax finalization report.

- Enterprises may transfer capital between their science and technology development funds by the following modes:

+ Between parent companies and member enterprises and vice versa;

+ Between parent companies and subsidiary companies and vice versa.

- The transfer of capital and the rate of capital transferred between the science and technology development fund of a corporation or parent company and the science and technology development funds of member enterprises or subsidiary companies and vice versa shall be decided by the Chairman of the Board of Directors or Members’ Council or director general or director (at-law representative of the enterprise) on the basis of the fund deduction rate prescribed in the fund’s organization and operation charter, investment demands of scientific and technological activities at member enterprises and the science and technology development demand and plan of the whole system.

- Enterprises that transfer capital between their science and technology development funds under Clause 2 of this Article shall report on the transfer of capital and use of transferred amount to their managing tax office and provincial-level Finance Department and Science and Technology Department of the locality where they make business registration.

- In case an enterprise has no need to use or does not use up its science and technology development fund:

+ If being a state-owned enterprise, it shall remit the unused amount to the National Science and Technology Development Fund or the science and technology development fund of its managing ministry, province or central-affiliated city. If being a non-state enterprise, it may contribute the unused amount to the science and technology development fund of the province or centrally run city where it registers tax payment;

+ In case a non-state enterprise does not make contributions to any state-run science and technology development fund, within 5 years, counting from the year following the year of making deduction for setting up the fund, if the enterprise’s science and technology development fund remains unused, is not used up or is improperly used, the enterprise shall pay to the state budget an enterprise income tax on the amount deducted for setting up the fund but left unused or improperly used and an interest on such enterprise income tax.

- When an enterprise that has made contributions to a science and technology development fund prescribed a Point a, Clause 5 of this Article needs funding to perform a scientific and technological task, it may request support from such fund.

The science and technology development fund that has received capital transferred from the enterprise shall, based on the fund estimate of the scientific and technological task, provide a monetary support equal to or higher than the transferred amount, depending on its capacity.

View more details at Decree No. 95/2014/NĐ-CP of Vietnam’s Government, effective from December 01, 2014.

Le Hai

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