- Companies must earn seventy percent revenue from electronic equipment manufacturing projects.
- Research and development spending must reach three percent of average net income.
- Foreign firms must transfer technology or include Vietnamese businesses in production.
The Ministry of Science and Technology (MoST) of Vietnam is preparing a circular to create standards for companies engaged in manufacturing electronic equipment projects to be eligible for corporate income tax benefits. The draft states that companies seeking corporate income tax incentives must fulfill specific requirements, with revenue from electronic equipment manufacturing constituting at least 70% of the total revenue of the company.
For major corporations, the organization needs to maintain a research and development team comprising a minimum of 10 staff members with university diplomas or above, which must include at least five Vietnamese citizens. Small and medium-sized enterprises must establish a research and development department that includes at least three employees with university degrees or higher, which must comprise at least one Vietnamese citizen.
Total spending on scientific research, technology development, and innovation should be a minimum of 3% of the average net income from the last three consecutive fiscal years; for enterprises operating for fewer than three years, the calculation will consider the total operational duration since inception, but not less than one complete fiscal year.
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Foreign-invested companies undertaking electronic equipment manufacturing projects and looking to obtain corporate income tax incentives must adhere to the specified criteria outlined in the draft. If a foreign-invested enterprise fails to satisfy any of the specified criteria, it must comply with one of the following additional criteria:
- The company is required to transfer technology to a minimum of one Vietnamese company within five years of obtaining the investment registration certificate, the decision approving the investment, or a written agreement with the relevant state authority.
- The business must include Vietnamese companies in the value chain and fulfill both of the subsequent requirements.
A minimum of 20% to 30% of businesses engaged in or executing assembly contracts, supplying materials, components, and services directly for the electronic equipment manufacturing project are Vietnamese. A minimum of 20% of the product's cost has to be produced by Vietnamese businesses involved in the value chain. The MoST is currently inviting public input on this draft via the ministry's official online platform.