Criteria For Determining High-Tech Enterprises: The Key To Special Tax Incentives

In the context of Vietnam’s push for high-quality investment and digital transformation, being recognized as a High-Tech Enterprise (HTE) is not only a testament to a company’s prestige but also a gateway to significant Corporate Income Tax (CIT) privileges and land rent incentives.

Based on current legal regulations, businesses must satisfy the following 05 core criteria:

1. Manufacturing Products in the High-Tech Portfolio

The first and most critical criterion: The enterprise must be engaged in the manufacturing and trading of products listed in the Portfolio of High-Tech Products Encouraged for Development. Furthermore, these products must account for a major proportion of the enterprise’s total annual net revenue.

2. Revenue Ratio from High-Tech Products

The revenue generated from high-tech products must reach a minimum percentage of the enterprise’s total annual net revenue. Specifically, this ratio must be at least 70%. This is a key indicator used by authorities to assess the entity’s level of technological focus.

3. Research and Development (R&D) Expenditures

Enterprises must maintain a specific level of investment in R&D activities (conducted within Vietnam) relative to their total annual net revenue, based on the following thresholds:

• Large Enterprises: At least 0.5%.
• Small and Medium Enterprises (SMEs): At least 1%.
• Enterprises with revenue exceeding VND 3,000 billion: At least 0.2%.

4. Dedicated R&D Human Resources

Technological capacity is demonstrated through the qualifications of the team directly performing R&D. The ratio of R&D staff (holding at least a Junior College degree or higher) to the total workforce must be:

• Large Enterprises: At least 2.5%.
• Small and Medium Enterprises (SMEs): At least 5%.
• Large-scale enterprises with high labor counts: At least 1% (but not fewer than 100 employees).

5. Quality Management & Environmental Protection Systems

Enterprises are required to apply international quality management systems such as ISO 9001, AS 9100, or equivalent industry-specific standards. Additionally, strict compliance with Vietnam’s environmental protection regulations is a prerequisite for maintaining certification.

For detailed consultation on the criteria for determining high-tech enterprises and related incentives, please kindly contact TPM Tax Agent experts via the TPM Hotline: +84 28 3505 1800.

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