THE MINISTRY OF FINANCE
THE GENERAL DEPARTMENT OF TAXATION
Official Dispatch No. 3730/TCT-CS dated August 18, 2016 of the General Department of Taxation on the introduction of the Joint Circular No. 12/2016/TTLT-BKHCN-BTC on the allocation and management of the science and technology development fund in enterprises
To: Provincial Tax Departments.
Ministry of Science and Technology and Ministry of Finance, on June 28, 2016, promulgated the Joint Circular No. 12/2016/TTLT-BKHCN-BTC on guidelines for the allocation and management of the science and technology development fund in enterprises (referred to as TTLT 12). General Department of Taxation introduces certain details of TTLT 12 as follows:
- Scope: The Circular provides guidelines for the allocation and management of the science and technology development fund in enterprises
- Regulated entities: Enterprises incorporated as per the laws, government agencies and other relevant entities.
The fund can be organized in either of these two manners:
- As an organization without judicial personality and directly under an enterprise.
- Be not established as an organization and operated by the enterprise’s officials who conduct multiple concurrent tasks.
Circular No. 15/2011/TT-BTC dated February 09, 2011 by the Ministry of Finance on guidelines for the establishment, organization, operation, management and allocation of science and technology development funds of the enterprises (referred to as Circular No. 15) defined that: The fund is a part, without juridical personality, of an enterprise.
- Sources of financing: The fund shall be financed by two sources:
+ Incomes from which corporate income tax is calculated during a tax period;
+ The corporation or parent enterprise transfers its science and technology development fund to the relevant funds of its subsidiaries or affiliates or vice versa.
- Level of contribution of taxable incomes to the Fund during a tax period:
+ For state-owned enterprises: The Fund receives 3% to 10% of incomes from which corporate income tax is calculated during the tax period;
+ For non-state owned enterprises: The level of contribution is left to their discretion but is limited to at most 10% of incomes from which corporate income tax is calculated during the tax period.
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