Circular 67/2022/TT-BTC tax liabilities applicable to enterprises using Science and Technology Development Funds

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Circular No. 67/2022/TT-BTC dated November 07, 2022 of the Ministry of Finance guiding tax liabilities applicable to enterprises setting up and using Science and Technology Development Funds
Issuing body: Ministry of FinanceEffective date:
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Official number:67/2022/TT-BTCSigner:Cao Anh Tuan
Type:CircularExpiry date:Updating
Issuing date:07/11/2022Effect status:
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Fields:Enterprise , Science - Technology , Tax - Fee - Charge

SUMMARY

Tax liabilities applicable to enterprises setting up Science and Technology Development Funds

Circular No. 67/2022/TT-BTC guiding tax liabilities applicable to enterprises setting up and using Science and Technology Development Funds is issued on November 07, 2022 by the Ministry of Finance.

Accordingly, on an annual basis, enterprises may deduct a percentage (%) of enterprise income tax for setting up Science and Technology Development Funds. To be specific: For State-owned enterprises: Deduct between 3% and 10% of the income liable to enterprise income tax in the tax period; For other enterprises: The enterprise shall determine its specific deduction, but not exceeding 10% of the income liable to enterprise income tax in the tax period.

Besides, within 05 (years from the date of deducting for setting up the fund under Article 2 of this Circular, if the enterprise does not use, or uses less than 70% of the annual fund deduction, it shall remit to the State budget the enterprise income tax amount calculated on the income amount already deducted but not yet used, or used less than 70% of the annual fund deduction, concurrently pay interest arising from such enterprise income tax amount.

Besides, the interest rate for calculating interest arising on the redeemed enterprise income tax amount calculated on the unused portion of the fund shall be the one-year term treasury bond interest rate applied at the time of redemption and the interest calculation period shall be two years as prescribed in Clause 2 Article 17 of the Law on Enterprise Income Tax 2008.

This Circular takes effect on December 23, 2022.

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Effect status: Known

THE MINISTRY OF FINANCE

_______

No. 67/2022/TT-BTC

 

THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness

_____________________

Hanoi, November 7, 2022

CIRCULAR

Guiding tax liabilities applicable to enterprises setting up and using Science and Technology Development Funds

____________

 

Pursuant to the Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019;

Pursuant to the Law on Enterprise Income Tax No.  14/2008/QH12; the Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax; and the Law No.  71/2014/QH13 Amending and Supplementing a Number of Articles of the Laws on Taxes;

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

Pursuant to the Government’s Decree No. 126/2020/ND-CP dated October 19, 2020, detailing a number of articles of the Law on Tax Administration;

Pursuant to the Government’s Decree No. 218/2013/ND-CP dated December 26, 2013, detailing and guiding the implementation of the Law on Enterprise Income Tax;

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

Pursuant to the Government’s Decree’s No. 76/2018/ND-CP dated 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. 87/2017/ND-CP dated July 26, 2017, on defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the General Director of Taxation;

The Minister of Finance hereby promulgates the Circular guiding tax liabilities applicable to enterprises setting up and using Science and Technology Development Funds.

 

Article 1. Scope of regulation and subjects of application

1. Scope of regulation: This Circular provides guidance on tax liabilities applicable to enterprises setting up and using Science and Technology Development Funds (hereinafter collectively referred to as funds).

2. Subjects of application: Enterprises established and operating under Vietnamese laws (hereinafter collectively referred to as enterprises), State agencies, concerned organizations and individuals.

Article 2. Deduction for setting up Science and Technology Development Funds of enterprises

1. On an annual basis, enterprises may deduct a percentage (%) of enterprise income tax for setting up the funds in accordance with Clause 1 Article 17 of the Law on Enterprise Income Tax No. 14/2008/QH12, Clause 1 Article 18 of the Government’s Decree No. 218/2013/ND-CP dated December 26, 2013, detailing and guiding the implementation of the Law on Enterprise Income Tax, and Clauses 1 and 2 Article 9 of the Government’s Decree No. 95/2014/ND-CP dated October 17, 2014, on investment in, and the financial mechanism applicable to, scientific and technological activities. To be specific:

a) For State-owned enterprises: Deduct between 3% and 10% of the income liable to enterprise income tax in the tax period. The specific percentage shall be determined based on the capacity and needs for payment for scientific and technological activities of the enterprise;

b) For enterprises other than those specified at Point a Clause 1 of this Article: The enterprise shall determine its specific deduction, but not exceeding 10% of the income liable to enterprise income tax in the tax period.

2. The deduction shall be determined according to each enterprise income tax period and is deducted from the taxable income when determining the payable enterprise income tax in the tax period.

Article 3. Rules for allocation of funds

1. Funds shall only be used for investment in research and development of science and technology of enterprises and the contents permitted to spend from the funds as prescribed by law.

2. Expenditures from the funds must have sufficient invoices and documents as prescribed. For expenditures from the funds without invoices and documents as prescribed, enterprises must remit to the State budget in accordance with Clause 1 Article 4 of this Circular.

3. Enterprises are not allowed to include expenditures from the funds, late-payment interests and interests arising from the payable enterprise income tax, as determined under Clauses 1 and 2 Article 4 of this Circular, in deductible expenses when determining taxable income in the tax period.

4. Allocations from the Funds shall be subject to the first in, first out principle.

5. In case during the year, enterprises have demand to use for scientific and technological activities in excess of the amount currently available at the funds, they may choose to include them in deductible expenses when determining their taxable income in the tax period or make advance deductions to the funds of the following years to cover the insufficient amount in accordance with Clause 7 Article 10 of the Government’s Decree No. 95/2014/ND-CP dated October 17, 2014, on investment in, and the financial mechanism applicable to, scientific and technological activities.

Article 4. Tax liabilities applicable to enterprises failing to properly use; or failing to use, or using less than 70% of the annual deduction for setting up the funds

1. Tax liability applicable to an enterprise failing to properly use the fund

In case the enterprise fails to properly use the fund, it shall remit to the State budget an enterprise income tax amount calculated on the deducted income corresponding to the amount improperly used and the interests arising from such enterprise income tax amount. The interest rate for calculating interest arising on the redeemed enterprise income tax amount calculated on the portion of the fund improperly used is the rate of late-payment interest prescribed in the Law on Tax Administration and other guiding documents. The interest shall be imposed continuously from the day following the date of deduction of the fund to the day immediately preceding the day on which the redeemed tax amount is remitted into the State budget.

2. Tax liability applicable to an enterprise failing to use, or using less than 70% of the annual fund deduction

a) Within 05 (five) years from the date of deducting for setting up the fund under Article 2 of this Circular, if the enterprise does not use, or uses less than 70% of the annual fund deduction, it shall remit to the State budget the enterprise income tax amount calculated on the income amount already deducted but not yet used, or used less than 70% of the annual fund deduction, concurrently pay interest arising from such enterprise income tax amount. Interest arising from the payable enterprise income tax amount shall be determined in accordance with Point b Clause 2 of this Article.

In case of fund transfer, the time limit of 05 years for the fund transfer amount shall be determined from the enterprise income tax period of receiving the fund transfer.

b) The interest rate for calculating interest arising on the redeemed enterprise income tax amount calculated on the unused portion of the fund shall be the one-year term treasury bond interest rate applied at the time of redemption and the interest calculation period shall be two years as prescribed in Clause 2 Article 17 of the Law on Enterprise Income Tax No. 14/2008/QH12.

c) The used amount of the fund includes: the amount of the fund spent for the right purpose which has been settled according to regulations; the advance payment with sufficient invoices and documents but not yet qualified for settlement to carry out the fund’s activities; transfers from the fund of the corporation to its member enterprises, of the parent company to its subsidiaries or vice versa; and the money paid to the National Science and Technology Development Fund or the Science and Technology Development Funds of the line ministries, provinces and cities (if any) according to regulations of the Ministry of Science and Technology.

The transfer between the fund of the parent company, the corporation and the fund of the subsidiary or member enterprise and vice versa shall only be applicable to the subsidiaries or member enterprises in which the parent company owns 100% of the capital, excluding the following cases:

- Foreign-invested enterprises transfer their fund to that of the overseas parent enterprise;

- Vietnam-based parent enterprise transfers the fund to those of overseas subsidiaries.

3. In case the enterprise deducting the fund and the enterprise transferring the fund are not eligible for enterprise income tax incentives, the enterprise income tax rate used to calculate the redeemed tax is the tax rate applicable to the enterprise in each tax period of the enterprise when making deduction for setting up the fund or at the time of transferring the fund.

4. The determination of enterprise income tax in case of deducting for setting up the fund during the period the enterprise is entitled to enterprise income tax incentives:

a) In case the enterprise makes deductions to the fund during the period of enjoying enterprise income tax incentives (applying preferential tax rates, tax exemption and reduction period), if the enterprise uses it for improper purposes or fails to use or uses less than 70% of the fund amount already deducted during the time the enterprise is enjoying enterprise income tax incentives, the redeemed enterprise income tax amount shall be determined according to the enterprise income tax incentives at the time of setting up the fund.

b) In case the enterprise that deducts for setting up the fund during the time it is enjoying enterprise income tax incentives receives fund transfer from other enterprises (transferring enterprises), if it uses such transfer amount for improper purposes or uses less than 70% of the amount already deducted and received from the transfer, the redeemed enterprise income tax amount shall be determined as follows:

- For the amount of deduction for setting up the fund at the enterprise, the enterprise income tax redeemed shall be determined according to enterprise income tax incentives granted to the enterprise upon its contribution to such fund.

- For the amount the enterprise receives from another enterprise, the enterprise income tax redeemed shall be determined as follows:

+ In case at the time of receiving the fund transfer, the enterprise transferring the fund is not entitled to enterprise income tax incentives, the enterprise income tax redeemed shall be determined according to the rate of the enterprise income tax that is ineligible for incentives.

+ In case at the time of receiving the fund transfer, the enterprise transferring the fund is enjoying enterprise tax incentives, the enterprise income tax redeemed shall be determined according to the enterprise tax incentives of the transferring enterprise at the time of transfer.

The determination of the transferred amount that is improperly used, or unused or used less than 70% of the allocated amount shall be based on the ratio between the transferred amount and the fund in the tax period (including the deduction to the fund and the transferred amount).

5. Enterprises shall calculate, declare and pay enterprise income tax on their own for the funds that are improperly used, or unused or used less than 70% of the allocated amount, and shall take responsibility before the law in accordance with the law on tax administration.

Article 5. Management of assets formed by the fund

1. The enterprises must compile the dossier of fixed assets formed by the fund to have them supervised and managed in accordance with laws. The depreciation of fixed assets must not be included in deductible expenses when determining enterprise income tax, including the following cases:

a) Fixed assets created to serve the enterprise's scientific and technological research activities;

b) Purchasing machinery and equipment accompanied by objects of technology transfer as prescribed in Article 7 of the Law on Technology Transfer to replace part or all of the technology that has been or is being used with another more advanced technology in order to improve productivity, product quality or improve and develop new products of enterprises under Point c Clause 3 Article 10 of the Government's Decree No. 95/2014/ND-CP dated October 17, 2014, on investment in, and the financial mechanism applicable to, scientific and technological activities;

c) Purchasing machinery and equipment for technological innovation, directly serving the enterprise's production and business activities for 02 years (in 2022 and 2023) according to the content mentioned at Point b Clause 3 Article 3 of the National Assembly's Resolution No. 43/2022/QH15 dated January 11, 2022, on fiscal and monetary policies in support of the socio-economic recovery and development program.

2. Fixed assets have been invested from the fund, if the enterprise repairs or upgrades, the enterprise's fund shall be used to pay for such expenses.

3. In case the fixed assets that have been created from the fund to serve scientific and technological research activities have not yet worn out, if transferred to the enterprise's production and business activities, the remaining value of fixed assets shall be included in other income and the remaining value of such fixed assets shall be depreciated and included in deductible expenses when determining enterprise income tax.

4. In case the fixed assets that have been created from the fund have not yet worn out to serve scientific and technological research activities, production and business activities, the enterprise shall monitor and manage according to the Ministry of Finance’s regulations on the regime of management, use and depreciation of fixed assets and shall not have to include the depreciation of fixed assets in deductible expenses when determining enterprise income tax.

5. In case the fixed assets that have been created from the fund to serve scientific and technological research activities, then transferred to serve the enterprise's production and business activities, the value of fixed assets shall be included in other income and the value of such fixed assets shall be depreciated and included in deductible expenses when determining enterprise income tax.

6. In case the fixed assets are purchased from the fund that has transferred these assets, the enterprise must determine the remaining value to adjust the increase or decrease of the fund when transferring the assets.

7. For the fixed assets being used for production and business activities and converted to use for scientific and technological research activities, the enterprise shall determine the remaining value of the fixed assets to pay for the purchase of fixed assets from the fund and monitor the fixed assets in accordance with Clause 1 of this Article.

8. Cases of liquidation of assets in service of scientific and technological activities of enterprises shall comply with current regulations.

9. Other assets must be managed and monitored according to regulations to ensure proper use.

Article 6. Management of the funds in case of re-organization of enterprises

1. In case an enterprise is re-organized which leads to the formation of a new enterprise in accordance with Vietnamese laws, the newly established enterprise may inherit and take responsibility for the management and use of the fund of the enterprise or enterprises before re-organization.

2. In case of re-organizing an enterprise other than those specified in Clause 1 of this Article, the enterprise or enterprises formed after re-organization shall inherit and take responsibility for the management and use of the enterprise’s fund before the re-organization.  The distribution of the science and technology development fund shall be decided by enterprise(s) and notified to tax agencies.

Article 7. Report on setting up, transfer and use of the fund

1. On an annual basis, the enterprise shall make a report on the deduction for setting up the fund, transfer and use of the fund according to Form No. 03-6/TNDN issued together with the Ministry of Finance's Circular No. 80/2021/TT-BTC dated September 29, 2021, guiding the implementation of a number of articles of the Law on Tax Administration and the Government’s Decree No. 126/2020/ND-CP of October 19, 2020, detailing a number of articles of the Law on Tax Administration.

2. In case enterprises transfer funds between funds under Point c Clause 2 Article 4 of this Circular, the enterprise receiving the transferred amount must report about receiving the transfer and using the transferred amount of the fund.

3. Reports on deduction for setting up the fund, transfer and use of the fund shall be sent to the agencies as prescribed in Clauses 1 and 4 Article 11 of the Government’s Decree No. 95/2014/ND-CP dated October 17, 2014, on investment in, and the financial mechanism applicable to, scientific and technological activities. The deadline for reporting is the same as the deadline for submitting the enterprise's annual enterprise income tax finalization declaration.

Article 8. Effect and implementation organization

1. This Circular takes effect on December 23, 2022, and applies to the determination of tax liabilities from the enterprise income tax period of 2022.

2. To repeal Article 4, Article 12, Article 13, Article 14, Article 16, Article 17 of Joint Circular No. 12/2016/TTLT-BKHCN-BTC dated June 28, 2016, of the Ministry of Science and Technology and the Ministry of Finance, on guidelines for the allocation and management of the science and technology development fund enterprises.

3. Contents of spending, instructions on use of the fund and remittance of the enterprise's science and technology development fund to the National Science and Technology Development Fund or the Science and Technology Development Funds of line ministries, provinces and cities shall comply with legal documents on science and technology and regulations of the Ministry of Science and Technology.

4. In cases where the legal documents which are referred to in this Circular are amended, supplemented, or replaced with new legal documents, the new ones shall prevail.

5. Any problems arising in the course of implementation should be promptly reported to the Ministry of Finance for review and settlement./.

 

 

FOR THE MINISTER

THE DEPUTY MINISTER

 

 

Cao Anh Tuan

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