February 2019, the Government of Vietnam issued the Decree No. 13/2019/NĐ-CP, which brings good news to science and technology enterprises, namely tax exemption and reduction policies. By January 2021, the Government quickly issued the Circular No. 03/2021/TT-BTC providing guidance on remission of corporate income tax incurred by science and technology enterprises as prescribed in the Government’s Decree No. 13/2019/ND-CP dated February 01, 2019 on science and technology enterprises (STE).
Article table of contents
Pursuant to Article 3 of the Circular No. 03/2021/TT-BTC of the Ministry of Finance of Vietnam, corporate income tax (CIT) is specified as following:
Firstly, CIT remission rate and duration
- An STE will receive CIT remission as prescribed in Clause 1 Article 12 of the Vietnam Government’s Decree No. 13/2019/ND-CP dated February 01, 2019. To be specific: The STE will have its CIT payable exempted in 04 years and reduced by 50% in the subsequent 09 years.
In which:
+ The CIT remission duration shall be counted consecutively from the day on which the STE is issued with the STE certificate.
+ If the STE has no taxable income within the first three years from the year in which it is issued with the STE certificate, the CIT remission duration shall commence from the fourth year.
Note: During the CIT remission duration, the STE will not be entitled to CIT remission in the year in which its revenue from science and technology products fails to account for at least 30% of its total annual revenue as prescribed, and this period will be excluded in the STE’s CIT remission duration.
- In case the STE has taxable income but its operating period during which it is eligible for CIT remission is less than 12 (twelve) months in the first year, the STE may decide whether it will receive CIT remission in the first year or register with the tax authority to receive CIT remission in the subsequent year. If the STE chooses to receive CIT remission in the subsequent year, it must calculate its CIT payable in the first year and pay it to the state budget as prescribed.
Secondly, cases of application
(1) If the STE has received or is receiving CIT incentives under other conditions (in addition to incentives given to STEs) and is issued with an STE certificate, the duration during which it will receive CIT remission as an STE will be the CIT remission duration given to the STE minus the period during which it has received CIT remission under other conditions.
(2) If additional science and technology products are added by a competent authority to the STE certificate of an STE that is operating and receiving CIT remission for an STE, the revenue from such additional science and technology products shall be also eligible for the CIT remission that the STE is receiving for the remaining CIT remission duration.
Circular No. 03/2021/TT-BTC of the Ministry of Finance of Vietnam takes effect from March 01, 2021.
Thu Ba
- Key word:
- Circular No. 03/2021/TT-BTC
