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| A worker checks a wafer used in semiconductor manufacturing at the South Korea-invested Hana Micron Vina factory in the northern Bac Giang Province__Photo: VNA |
The Ministry of Information and Communications (MOIC) has released a draft Law on Digital Technology Industry, proposing novel regulations to promote the development of the digital technology industry into a sector with great contribution to the country’s economy.
With the aim of transforming Vietnam into the most favorable environment for nurturing and developing digital technology businesses, the draft law introduces special policies for the digital technology industry, particularly research and development (R&D) activities. Regulations on innovative startups in the digital technology industry; testing of digital technology products and services; promotion of the semiconductor industry; and management and development of AI are also specified.
As per the draft, the State would provide partial financial support ranging from 30 percent to 80 percent of the total expenses for those organizing or participating in programs and schemes to improve enterprises’ R&D capacity, productivity and products’ quality to meet requirements of overseas markets, guide enterprises to apply systems and tools for management and raising of quality and productivity, especially tools supporting smart production and smart services; disseminate information on expansion of overseas markets; and connect domestic businesses with foreign partners.
Income from manufacture of digital technology products for which Vietnamese enterprises accounting least 30 percent of the total number of manufacturers that perform contracts on assembly and supply of components and raw materials and provision of services serving the manufacture of the products in the country and contributing at least 30 percent of the product cost, would be eligible for corporate income tax at the rate of 10 percent for 15 years.
The draft also sets out policies to support the development of digital technology businesses, incentives for activities of the digital technology industry, special credit policies for digital technology businesses, and financial sources for development of the digital technology industry.
Accordingly, enterprises carrying out projects on manufacture of digital technology products would be entitled to borrow investment credit from the State according to the law on investment credit. They might also take soft loans from the Vietnam Environmental Protection Fund for pollution treatment and environmental protection activities.
Digital technology product manufacture projects would be entitled to land use levy and land rental exemption and reduction as well as financial support for compensation and resettlement work, if any, at the highest level as prescribed by the land law.
As for large-scale special projects, special policies would applied. Specifically, they would enjoy special investment incentive policies regarding corporate income tax and others according to the investment law, corporate income tax law and other relevant legal regulations. When calculating taxable incomes, projects would be entitled to deduct R&D expenses at the rate of 150 percent of the actually incurred expenses while experts, scientists and talents working for them would be entitled to exemption from personal income tax on salaries and wages for five years.
Besides, enterprises undertaking such projects would also enjoy a 10-year exemption of land rental and water surface rental and 50-percent reduction for the remaining period. They would also benefit to the priority regime when carrying out customs procedures and be exempt from conditions on import/export turnover.- (VLLF)
