Income Tax Benefits For Science And Technology Development

In the context of science, technology, and innovation increasingly playing a pivotal role in socio-economic development, creating a favorable legal framework to encourage businesses to invest in this field is of paramount importance. The latest draft amendment of the Law on Corporate Income Tax clearly reflects this spirit, with numerous attractive tax incentive proposals promising to strongly motivate the development of the country’s science and technology.

Ensuring Overall And Consistent Tax Incentives

A noteworthy point in this draft Law is the focus on ensuring the overall and consistent nature of the tax incentive system. The drafting body has reviewed, summarized, and systematized existing incentives, and proposed incorporating all tax incentive regulations into the Law on Corporate Income Tax.

Accordingly, the draft Law clearly stipulates: “if other laws contain regulations on corporate income tax incentives that differ from the provisions of this Law, then the provisions of this Law shall be followed.” This is tantamount to ending the situation of embedding tax incentive policies in specialized laws, which has caused inconsistency and difficulties in implementation.

The National Assembly’s Economic and Financial Committee also strongly agrees with this view and will continue to review tax incentives currently scattered across other laws to bring them into the Law on Corporate Income Tax, ensuring a unified, transparent, and easily implemented tax legal system.

Tax Incentives To Encourage Investment In Science And Technology

To implement Resolution No. 57-NQ/TW on breakthrough development of science, technology, innovation, and national digital transformation, the draft Law particularly emphasizes introducing tax incentives to encourage businesses to invest more strongly in the field of science and technology.

As proposed, the Government will be assigned to detail the specifics of these incentive contents, including:

• The level of additional deductible expenses when calculating corporate income tax for research and development, and innovation activities.
• The duration of incentive application.
• The scope of incentive application.

Assigning the Government to detail the specifics will create flexibility in developing and adjusting tax incentive policies, ensuring policies are always appropriate to the actual situation and goals of science and technology development at each stage.

Details Of Current And Draft Tax Incentives

Deputy Minister of Finance Cao Anh Tuan further clarified the current tax incentives and new points in the draft Law related to science and technology.

Accordingly, current legislation already has many incentives for this field, and the draft Law continues to inherit and develop these incentives. Specifically:

• Deductible expenses: Expenditures sponsoring science and technology, innovation, digital transformation; expenditures for research and development, innovation, and digital transformation activities of enterprises are all deductible when calculating corporate income tax.
• Tax-exempt income: The draft Law supplements regulations on tax exemption for sponsored funds used for research, development of science and technology, and innovation, digital transformation; sponsorships for science and technology organizations, and non-profit public educational organizations.
• Detailed regulations from the Government: To ensure a legal basis and flexibility, the draft Law supplements regulations that the Government will detail deductible expenses, the level of additional deductions, and the scope of application for expenditures on research and development activities of enterprises, environmental protection, and innovation.

Review And Unify The Incentive System

The drafting agency and the National Assembly’s Economic and Financial Committee have closely coordinated in reviewing specialized laws to bring tax incentives into the Law on Corporate Income Tax. The goal is to create a unified legal system, avoiding the situation of dispersed tax incentives, which causes difficulties in implementation.

With the proposed corporate income tax incentives for science and technology development mentioned in the draft amended Law, the State’s determination to create the most favorable conditions for businesses to invest in this field is evident. These changes will not only help businesses reduce their financial burden but also create strong motivation to promote research and innovation activities, making an important contribution to the sustainable development of the country in the future.