On April 25, 2024, the General Department of Taxation issued Official Letter No. 1741/TCT-CS in response to the determination of a new investment project in the field of software product production.
Based on Decree No. 12/2015/ND-CP dated February 12, 2015, of the Government; In Appendix No. 01 - List of software products (Issued together with Circular No. 20/2021/TT-BTTTT dated December 3, 2021, of the Ministry of Information and Communications amending and supplementing Circular No. 09/2013/TT-BTTTT dated April 8, 2013, of the Minister of Information and Communications issuing a list of software and hardware products, electronics); Circular No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance guiding the implementation of the Law on Value Added Tax and Decree No. 209/2013/ND-CP dated December 18, 2013, of the Government:
- Regarding the Value Added Tax (VAT) policy: The activity of producing software products and software services is not subject to VAT as prescribed in Clause 21, Article 4 of Circular No. 219/2013/TT-BTC. In case the Company produces software products for foreign organizations and individuals and consumes outside Vietnam; supply to organizations and individuals in the non-tariff area and consume in the non-tariff area as prescribed by law, it is subject to the VAT rate of 0% if it meets the conditions prescribed in Article 9 and Clause 2, Article 16 of Circular No. 219/2013/TT-BTC.
- Regarding the preferential policy of Corporate Income Tax (CIT): The operation of the enterprise, if it belongs to the project of software production activities and meets the preferential conditions for CIT, will enjoy preferential treatment according to the actual conditions met.
- Regarding the determination of the field of software product production is implemented according to the guidance in the legal documents issued by the Ministry of Information and Communications. In case of difficulties in determining whether the Company’s product meets the conditions of software, producing software products or not, it is suggested that the Tax Department coordinate with the Company to have a written request to the Ministry of Information and Communications for comments to have a basis for applying tax policies.
