Corporate income tax on software

CIT for Company part soft

 Pursuant to Article 19 and Article 20 of Circular 78/2014/TT-BTC

Preferential tax rate 10% for a period of fifteen years (15 years) applies to income of enterprises from implementing new investment projects in the following fields:

+ Scientific research and technology development; High technology applications in the list of high technologies prioritized for investment and development according to the provisions of the Law on High Technology;

+ High technology incubation, high technology business incubation;

+ Venture capital investment for high technology development in the list of high technologies prioritized for development according to the provisions of law on high technology;

+ Investment in construction and business of high-tech incubators and high-tech business incubation facilities; investment in developing water plants, power plants, water supply and drainage systems;

+ Bridges, roads, railways; airports, seaports, river ports; airports, railway stations and other particularly important infrastructure projects decided by the Prime Minister;

+ Production of software products; production of composite materials, light construction materials, and rare materials; producing renewable energy, clean energy, energy from waste destruction; biotechnology development.

Incentives on tax exemption and tax reduction periods

– Tax exemption for 4 years, reduction of 50% in tax payable for the next 9 years for: Enterprise income from implementing new investment projects specified in Clause 1, Article 19 of this Circular

- So if it is a software manufacturing enterprise: For new investment projects that produce software products in the category of software products and meet the software product production process according to the provisions of law. , enjoy preferential tax rate of 10% for a period of 15 years, tax exemption for 4 years, reduction of 50% in tax payable for the next 9 years.

– If you are a business buying/selling software, you are not eligible for incentives CIT as above.

– Software manufacturing enterprises since their establishment have applied the following tax rates:

+ From year 1 to year 4: Will be exempted from corporate income tax.

+ From year 5 to year 13 (next 9 years): Reduce 50% corporate income tax with tax rate 10% -> So only have to pay 5% corporate income tax.

+ From year 14 to year 15: Tax rate is 10%.

+ From year 16 onwards: Pay corporate income tax like a normal business (From 2016 onwards it is 20%)