Hi-tech enterprises would be eligible for plenty of incentives and supports, following a draft decree elaborated by the Ministry of Science and Technology (MoST) to guide the Law on High Technology regarding hi-tech activities and policies and measures to encourage the development of high technologies.
The 23-article draft decree targets all Vietnamese as well as foreign organizations and individuals and overseas Vietnamese engaged in hi-tech activities in Vietnam.
To be recognized as a hi-tech one, an enterprise must meet the following conditions: producing hi-tech products or providing hi-tech services encouraged for development; having an average spending on hi-tech R&D activities and an average turnover from hi-tech products or services accounting for at least one per cent and 60 per cent, respectively, of their annual total turnover in three consecutive years; from the 4th year on, hi-tech R&D cost must exceed one per cent while income from hi-tech products or services must reach at least 70 per cent of the annual turnover. In addition, they must satisfy other conditions on environmental protection, energy saving and product quality management.
If satisfying these conditions, enterprises would enjoy exemption from corporate income tax (CIT) for four years after taxable income is generated and a 50 per cent reduction of the payable CIT amounts for the subsequent nine years and enjoy the CIT rate of 10 per cent for 15 years.
They would be eligible for exemption from import duty on machinery, equipment and spare parts which cannot be produced at home and are imported for production and enjoy the highest export duty incentives and the value-added tax rate of zero per cent for hi-tech products and services. Hi-tech enterprises would be also allocated land free of land use levy or exempted from land use levy on land plots used for the production of hi-tech products or provision of hi-tech services.-