The Law on Science and Technology 2013 (adopted by the Thirteenth National Assembly of the Socialist Republic of Vietnam at its Fifth Session on June 18, 2013) will officially come into effect from January 1, 2014. Many new issues in the Law reflect a comprehensive renovation perspective in the management mechanism of scientific and technological activities, in accordance with the spirit of Resolution No. 20 – NQ/TW of the 6th Session of the Central Committee of the Eleventh Term on the development of Science and Technology to serve industrialization and modernization in the context of a socialist-oriented market economy and international integration. Some new contents directly related to research and technology development (R&D), technology transfer, and application have been mentioned in the Law, including the following:
Article table of contents
1. Training and Valuing Scientific and Technological Human Resources
Law on Science and Technology 2013 provided specific regulations on training, fostering, and attracting scientific and technological human resources — the direct resources for implementing research and technological development activities.
For those participating in scientific research and technological development, Article 64 of the Law stipulates that they are entitled to preferential tax policies under the tax law for income from performing scientific research and technological development contracts; income from products made from new technologies first applied in Vietnam, products under trial production period; and are exempted from civil liability for damages caused by risks during the R&D process (Article 23).
Also, in Article 23, leading scientists, in addition to the privileges of those appointed to scientific and technological titles, are prioritized to lead important scientific and technological tasks; establish outstanding research groups in their area of expertise and be granted or supported with funding for these groups' activities; receive financial support to participate in domestic and international scientific conferences and workshops in their field of expertise.
For young talented scientists, in addition to the privileges of those appointed to scientific titles, they are also prioritized for scholarships to upgrade their skills domestically and abroad; form outstanding research groups in their field of expertise and receive funding or support for these groups' activities; receive financial support to attend domestic and international conferences and workshops in their field of expertise.
2. Finance and Investment for Science and Technology
Recently, many research projects and opinions have stated that financial and investment mechanisms for science and technology face significant obstacles. Therefore, Law on Science and Technology 2013 has set out regulations to improve the efficiency of allocation, management, and use of funds from the state budget, strongly mobilize social and foreign capital investments for science and technology development, highlight the role of businesses in science and technology activities and innovation, and specify more tax and credit incentives for science and technology activities.
3. Funding from State Budget
In line with the spirit of Resolution No. 20-NQ/TW, Article 49 of the Law stipulates that the state ensures spending on science and technology from 2% or more of the total annual state budget expenditures and gradually increases according to the development needs of science and technology. Noteworthy is the use of state budget funds for purchasing R&D results, supporting the import of core technologies, high technologies, design, and hiring domestic and foreign experts in priority fields; applying a mechanism of fixed funding for science and technology activities using the state budget; and a special investment mechanism to implement special, large-scale science and technology projects serving defense, security, or having a substantial impact on the productivity, quality, and competitiveness of national products.
4. Enterprises' Investment in Science and Technology Development and Development of Science and Technology Enterprises
To mobilize all social resources for science and technology development, especially from businesses, Article 56 of the Law stipulates that enterprises must allocate funds to innovate and upgrade technology levels, enhance productivity, quality, and product competitiveness; the investment funds for science and technology development of enterprises are included in the product cost.
At the same time, the Law stipulates that state-owned enterprises must establish a Science and Technology Development Fund. Non-state enterprises are encouraged to allocate taxable income to establish their Science and Technology Development Fund (with no maximum limit specified) or contribute to the sectoral, local Science and Technology Development Fund and enjoy benefits as per the fund's regulations. Enterprises have full autonomy and responsibility in managing and using the funds for the purposes for which they were established.
To encourage the development of science and technology enterprises, the Law provides that science and technology enterprises are entitled to privileges: being considered by competent state management agencies to be granted rights to use or own scientific and technological results owned by the state; exempted or reduced enterprise income tax like newly established enterprises from investment projects in the high-tech sector from the time they have taxable income as per the Government of Vietnam's regulations; exempted from registration fees when registering land use rights, house ownership; prioritized in renting land, infrastructure in industrial zones, export processing zones, economic zones, high-tech zones; enjoy preferential credit policies from the Vietnam Development Bank, the National Technology Innovation Fund, and other funds to carry out investment production and business projects; given priority in using equipment for R&D activities at national key laboratories, technology incubators, business incubators, and state scientific and technological research facilities.
If enterprises apply R&D results to innovate and upgrade technology levels, enhance productivity, quality, and product competitiveness, they are also sponsored, lent at preferential interest rates, supported with interest subsidy loans, and guaranteed to get capital loans from state science and technology funds.
5. Application of R&D Results and Dissemination of Science and Technology Knowledge
To facilitate the application of R&D results, the Law stipulates the responsibility for deploying R&D results of the proposing or ordering party using the state budget for scientific and technological tasks. If the organization or individual presiding over the scientific and technological task does not fulfill the responsibility of applying R&D results, they will not be allowed to participate in the state-budget-funded scientific and technological tasks for three years from the date of violation handling.
Simultaneously, the Law encourages the application of R&D results into production and life as it is one of the primary criteria for evaluating the capability of the author, head of the science and technology organization, and enterprises; it serves as a basis for the state to prioritize when selecting and assigning scientific and technological tasks using the state budget; supported by state science and technology funds in terms of scientific and technological activities' finance. Organizations or individuals applying R&D results and exploiting, using patents, particularly high technology, to innovate socio-economic management, technology, and improve product competitiveness are entitled to tax, credit, and other incentives. Additionally, the Law provides that investment projects, socio-economic development programs using the state budget must have a budget for applying, researching, and developing scientific arguments during investment preparation, investment implementation, and solving arising scientific and technological issues; specifies the purpose of state budget expenditure to promote local scientific and technological application; and regulates the dissemination of knowledge and science and technology communication.
6. Ownership of R&D Results and Benefit Sharing of R&D Results Using State Budget
To ensure the benefits of scientists, especially for R&D results using the state budget, the Law stipulates the ownership of R&D results, in which results owned by the state are reviewed by the state representative for granting all or part ownership, usage rights to the organization presiding over scientific and technological tasks or organizations capable of commercializing scientific and technological research results. Concurrently, the profit from using, transferring usage rights, transferring, or contributing capital using R&D results with state budget consideration is shared with the author, with a minimum of 30%; the remaining portion is shared between the owner, the presiding organization, and intermediaries.
7. International Integration in Science and Technology
Aiming to take advantage of international resources in science and technology, in addition to regulations on diversifying international integration activities, Law on Science and Technology 2013 sets out several regulations on measures to promote international integration in science and technology, such as: establishing some science and technology research organizations and groups up to regional and international standards; enhancing the national science and technology database system, key laboratories meeting regional and international standards; connecting to advanced and modern regional and international information networks on research and training; perfecting preferential mechanisms and policies to support Vietnamese organizations and individuals in participating in international integration activities in science and technology; developing mechanisms and policies to attract foreign organizations and individuals to participate in Vietnam's science and technology development.
Source: Department of Technology Application and Development
