Circular 05/2022/TT-BKHCN use of Science and Technology Development Funds of enterprises

CIRCULAR

Guiding the use of Science and Technology Development Funds of enterprises^[1]

Pursuant to the June 18, 2013 Law on Science and Technology;

Pursuant to the June 19, 2017 Law on Technology Transfer;

Pursuant to the National Assembly’s Resolution No. 43/2022/QH15 of January 11, 2022, on fiscal and monetary policies in support of the socio-economic recovery and development program;

Pursuant to the Government’s Decree No. 95/2017/ND-CP of August 16, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Science and Technology;

Pursuant to the Government’s Decree No. 95/2014/ND-CP of October 17, 2014, on investment in, and the financial mechanism applicable to, scientific and technological activities;

Pursuant to the Government’s Decree No. 76/2018/ND-CP of May 15, 2018, detailing, and guiding the implementation of, a number of articles of the Law on Technology Transfer;

Pursuant to the Government’s Decree No. 13/2019/ND-CP of February 1, 2019, on science and technology enterprises;

At the proposal of the Director of the Department of Planning and Finance and the Director of the Legal Department;

The Minister of Science and Technology promulgates the Circular guiding the use of Science and Technology Development Funds of enterprises.

Article 1. Scope of regulation and subjects of application

1. This Circular guides the use of Science and Technology Development Funds of enterprises (below referred to as Funds).

2. This Circular applies to enterprises established in accordance with law (below referred to as enterprises), state agencies, and other related organizations and individuals.

Article 2. Right and responsibilities of enterprises

1. To enjoy autonomy in and take accountability for managing and using their Funds for proper purposes as specified in Clause 3, Article 63 of the Law on Science and Technology.

2. To notify the setting aside of Funds to specialized agencies in charge of science and technology under People’s Committees of the provinces or centrally run cities where they register tax payment within 30 days after the Funds are set aside.

3. To formulate and approve their regulations on proposal, identification, performance, evaluation and acceptance testing of scientific and technological tasks (below referred to as Regulations on scientific and technological tasks of enterprises), and Regulations on spending and use of Funds, and send these regulations to their managing tax offices concurrently with the  reports on deduction for setting aside and use of Funds in the first period as specified in Clause 2, Article 10 of the Government’s Decree No. 95/2014/ND-CP of October 17, 2014, on investment in, and the financial mechanism applicable to, scientific and technological activities (below referred to as Decree No. 95/2014/ND-CP).

4. To make reports on deduction for setting aside, transfer and use of Funds and send such reports to agencies under Clauses 1 and 4, Article 11 of Decree No. 95/2014/ND-CP.

5. To coordinate with state management agencies in inspecting and examining the management and use of funds under regulations.

Article 3. Expenditures for performance of scientific and technological tasks

1. Performance of national-, ministerial- and provincial-level scientific and technological tasks

For national-, ministerial- and provincial-level scientific and technological tasks which enterprises preside over or implement in coordination with others on the basis of signed scientific research and technology development contracts and for which task explanations have been approved in accordance with the law on science and technology, reciprocal capital shall be allocated from Funds based on implementation progress.

2. Performance of scientific and technological tasks of enterprises

a/ Based on Regulations on scientific and technological tasks of enterprises, scientific and technological tasks of enterprises shall be performed by the mode of selection or direct assignment or other modes as specified in Clause 2, Article 28 of the Law on Science and Technology.

b/ Regulations on estimation of expenditures for scientific and technological tasks of enterprises and the methods of expenditure assignment (final product-based expenditure assignment or partial expenditure assignment) for scientific and technological tasks shall be specified in enterprises’ Regulations on scientific and technological tasks and Regulations on spending and use of Funds. Enterprises may apply Joint Circular No. 27/2015/TTLT/BKHCN-BTC of December 30, 2015, of the Minister of Science and Technology and Minister of Finance, providing assignment of expenditures for performance of state budget-funded scientific and technological tasks and related replacing, amending and supplementing documents;

c/ Expenditures for performance of scientific and technological tasks shall be spent on items according to approved expenditure estimates, Regulations on scientific and technological tasks of enterprises and Regulations on spending and use of Funds;

d/ The appraisal of results of the performance of scientific and technological tasks not funded by the state budget which bear latent factors affecting national interests, national defense, security, environment or human health and lives before they are applied to production and life must comply with the Minister of Science and Technology’s Circular No. 02/2015/TT-BKHCN of March 6, 2015, providing the assessment and appraisal of results of the performance of scientific and technological tasks not funded by the state budget.

3. Expenditures for the performance of scientific and technological tasks which are terminated due to objective causes shall be determined according to enterprises’ Regulation on scientific and technological tasks.

Article 4. Expenditures for provision of support for science and technology development of enterprises

a/ Investing in technical and physical foundations for scientific and technological activities of enterprises: Building research and development organizations, analysis, testing, inspection, appraisal, calibration and product testing centers, information infrastructure and databases, and making of statistics on scientific and technological activities; expenditures for the maintenance and repair of technical and physical foundations and equipment serving scientific and technological activities; other expenditures for the science and technology development; quality management systems of enterprises as specified at Point a, Clause 3, Article 10 of Decree No. 95/2014/ND-CP.

Investment in technical and physical foundations for scientific and technological activities of enterprises must comply with the investment law, construction law, law on management and use of state capital invested in production and business at enterprises, and other relevant laws.

2. Procuring the right to use or own technological know-how and technological knowledge transferred in the forms of technological plan, technological process, technical design, technical solution, formulas, technical specification, technical drawing or diagram, computer program, or information data; production  rationalization or technology renewal solutions; patents, utility solutions, plant varieties, industrial designs; innovations; and domestic and foreign research outcomes and products serving scientific and technological activities of enterprises as specified at Point b, Clause 3, Article 10 of Decree No. 95/2014/ ND-CP.

The procurement of the right to use or own technologies on the List of technologies restricted from transfer specified at Point b, Clause 1, Article 3 of the Government’s Decree No. 76/2018/ND-CP of May 15, 2018, detailing, and guiding the implementation of, a number of articles of the Law on Technology Transfer (below referred to as Decree No. 76/2018/ND-CP) shall be implemented only after competent state agencies issue technology transfer licenses under Articles 28, 29 and 30 of the Law on Technology Transfer.

The determination of prices and payment methods when procuring the rights to use or own technologies related to technology transfer must comply with Article 4 of Decree No. 76/2018/ND-CP.

Arising expenses directly related to the procurement of the right to use or own the objects specified in this Clause shall be included in the value of the right to use or own such objects.

3. Procuring machinery and equipment for technology renewal directly serving production and business activities to replace part or the whole of technologies currently in use with more advanced ones in order to improve productivity and product quality or renovate or develop new products;

The procurement of raw materials and materials must comply with Point b, Clause 3, Article 3 of the National Assembly’s Resolution No. 43/2022/QH15 of January 11, 2022, on fiscal and monetary policies in support of the socio-economic recovery and development program.

The procurement of machinery and equipment mentioned in this Clause must comply with the investment law, law on management and use of state capital invested in production and business at enterprises and other relevant laws.

4. Paying salaries or expenses for outsourcing scientific and technological activities of enterprises to domestic or foreign experts or science and technology organizations under Point d, Clause 3, Article 10 of Decree No. 95/2014/ND-CP.

5. Expenditures for training scientific and technological personnel of enterprises

a/ The training of scientific and technological personnel of enterprises shall be carried out according to the contents and forms of training and further training as specified at Point dd, Clause 3, Article 10 of Decree No. 95/2014/ND-CP as follows:

- Research group-based training;

- Training experts in the field of science and technology;

- Postgraduate research;

- Training and further training to improve professional qualifications, knowledge and skills in science and technology management, productivity, quality and corporate governance.

b/ Training and further training shall take the forms of short-term and long-term courses at home and abroad; probation and working at research institutions, science and technology organizations, enterprises and corporations at home and abroad; and participation in scientific and technological tasks.

c/ Based on their approved development strategies and plans, enterprises shall formulate and approve plans on training of scientific and technological personnel and estimate their annual funds for training of scientific and technological personnel.

6. Expenses for initiative activities

a/ Initiative activities must comply with the Regulation on initiatives promulgated together with the Government’s Decree No. 13/2012/ND-CP of March 2, 2012, and relevant laws;

b/ Expenditures for initiative activities must comply with the Minister of Finance’s Circular No. 03/2019/TT-BTC of January 15, 2019, providing for funding sources, contents and levels of expenditures from the state budget to carry out initiative activities.

7. Expenditures for science and technology cooperation with domestic and overseas organizations, individuals and enterprises: Expenses for exploring and seeking partners and identifying technology demands at home and abroad; expenses for joint research in scientific and technological fields encouraged and prioritized by the State under Point g, Clause 3, Article 10 of Decree No. 95/2014/ND-CP.

8. Expenditures for evaluation, testing, appraisal, inspection, promotion and commercialization of new products and technologies; intellectual property right registration specified at Point h, Clause 3, Article 10 of Decree No. 95/2014/ND-CP must comply with relevant laws.

9. Expenditures for provision of donation and financial support for tasks under the Scheme on support for the national innovative startup ecosystem through 2025 as specified in the Minister of Finance’s Circular No. 45/2019/TT-BTC of July 19, 2019, on the financial management of the implementation of the Scheme on provision of support for the national innovative startup ecosystem through 2025.

Article 5. Expenditures for technology transfer activities

1. Expenditures for implementation of projects in the sectors, fields or localities eligible for investment incentives to acquire technologies from science and technology organizations must comply with Articles 8 and 9 of Decree No. 76/2018 /ND-CP.

2. Expenditures for investment in and reciprocal capital for innovative startups; technology renewal and incubation, incubation of science and technology enterprises, commercialization of scientific research and technological development outcomes; technology decoding, investment in physical and technical foundations for technology decoding; and hiring of domestic and foreign organizations and individuals to provide consultancy on and manage investment activities of Funds under contracts between the parties must comply with Article 10 of Decree No. 76/2018/ND-CP and Clause 3, Article 16 of Decree No. 13/2019/ND-CP of February 1, 2019, on science and technology enterprises.

3. Expenditures for procurement or import of samples (of products, technologies, designs, equipment or systems that need to be decoded) to serve technology decoding activities; support for hiring of experts to provide consultancy or technical assistance or carry out seeking activities, or technical workers to carry out technology decoding activities through scientific and technological tasks must comply with Article 13 of Decree No. 76/ 2018/ND-CP.

4. The provision of support for science and technology organizations carrying out activities in coordination with local technology application or transfer organizations to make scientific research and technological development outcomes suit local conditions must comply with Article 14 of Decree No. 76/2018/ND-CP.

5. Training and further training for building capacity to absorb and master technologies must comply with Article 28 of Decree No. 76/2018/ND-CP.

Article 6. Expenditures for management of Funds

1. Enterprises may use their Funds to spend on the following contents to directly serve the management of Funds:

a/ Payment of salaries, social insurance, unemployment insurance and health insurance premiums and contributions for staffs directly engaged in the management of Funds under regulations;

b/ Payment of allowances for part-time officials under regulations;

c/ Payment of expenses for hiring working offices (if any);

d/ Payment of expenses for procurement and repair of office supplies and assets;

dd/ Payment for public services;

e/ Payment of working-trip expenses;

g/ Payment of other expenses related to management of Funds.

2. The level of expenditures for management of Funds and the ratio of expenditures for management of Funds to the total expenditures shall be decided by enterprises, ensuring thrift, efficiency and compliance with law.

Article 7. Request for support from the National Science and Technology Development Fund; Science and Technology Development Funds of ministries; Science and Technology Development Funds of provinces and centrally run cities where enterprises register tax payment (below referred to as national, ministerial and local Science and Technology Development Fund(s)).

1. For state-owned enterprises that have made deduction for setting aside Funds in accordance with tax laws, if failing to using or having used less than 70% of the amount deducted for setting aside Funds, including of amounts transferred (if any) within 5 years from the year of making deduction for setting aside or receiving transferred amounts, they shall remit a part of the Funds that remain unused or are not used up to the national, ministerial and local Science and Technology Development Fund(s). The amount remitted to the national, ministerial and local Science and Technology Development Fund(s) shall be at least 20% of the amount deducted for setting aside the Funds, including transferred amounts (if any), in case enterprises have not yet used or used less than 70% of their Funds.

The amount deducted for setting aside Funds and the amounts already used are provided in the tax laws.

The remaining enterprises may contribute to Science and Technology Development Funds of the provinces and centrally-run cities where they register tax payment.

2. Enterprises that have paid or contributed to the national, ministerial and local Science and Technology Development Funds under Point a, Clause 5, Article 11 of Decree No. 95/2014/ND-CP may request support from these funds.

3. The national, ministerial and local Science and Technology Development Fund(s) that have received transfers shall provide support equal to the amount transferred to it/them and prioritize additional support within capacity of the fund(s). Additional support shall be provided in accordance with the national, ministerial and local Science and Technology Development Fund(s).

4. Order and procedures for enterprises to request support from the national, ministerial and local Science and Technology Development Fund(s) are as follows:

a/ Order:

- Enterprises that have made contribution to the national, ministerial and local Science and Technology Development Fund(s) under Clause 1 of this Article shall make and send dossiers to the national, ministerial and local Science and Technology Development Fund(s);

- Within 5 working days after receiving a dossier, the national, ministerial, and local Science and Technology Development Fund(s) shall check the completeness and validity of the dossier and issue a written request for amendment or supplementation of the dossier, in case it is incomplete or invalid  (if any);

- Within 35 working days after receiving a complete and valid dossier, the national, ministerial, and local Science and Technology Development Fund(s) shall consider and provide support to the concerned enterprise according to Clause 3 of this Article. In case of refusal to provide support, the national, ministerial and local Science and Technology Development Fund(s) must reply in writing and clearly state the reasons.

b/ Methods of dossier submission:

Dossiers shall be submitted directly at headquarters of the national, ministerial and local Science and Technology Development Fund(s); via online public services under regulations or sent by post.

c/ Composition and number of dossiers:

- A dossier must comprise an official request for support from the national, ministerial and local level Science and Technology Development Fund(s); explanations about, and estimated funds for performance of scientific and technological tasks;

- Number of dossier set: 1.

Article 8. Effect and organization of implementation

1. This Circular takes effect on June 1, 2022, and applies to Science and Technology Funds of enterprises from the 2022 enterprise income tax period.

2. Articles 2, 3, 5, 6, 7, 8, 9, 10, 11, and 15 of, and Form No. 1 provided in the Appendix to, Joint Circular No. 12/ 2016/TTLT-BKHCN-BTC of June 28, 2016 of the Minister of Science and Technology and Minister of Finance, guiding expenditures and management of Science and Technology Development Funds of enterprises cease to be effective from the effective date of this Circular.

3. Guidance on taxes, financial management and management of assets formed from the Funds must comply with the Ministry of Finance.

4. In case the legal documents referred to in this Circular are amended, supplemented or replaced by new legal documents, the latter shall prevail.-

For the Minister of Science and Technology
Deputy Minister
LE XUAN DINH