Enterprises implementing new investment projects to manufacture software products, the income from this project is subject to the tax rate of 10% for a period of 15 years and tax exemption for no more than 4 years. 50% reduction of payable tax amount for no more than 9 subsequent years.

(Previously, Mr. Le Minh Vu (in Hochiminh City) established a Digital Step Software Company to apply software engineering to sales management. However, after 2 years of operation, the company had to close because the tax authorities did not apply incentives for software companies. Start-up is an issue the Government is concerned about. As Mr. Vu knows, the first incentive for startup companies is tax incentives. The Thu Duc Tax Department announce that no startup software companies are entitled to tax exemption and reduction is contrary to the spirit of supporting startup companies.

Through the system of receiving and responding to businesses ‘recommendations, Mr. Vu would like to propose that the Government considers and provides clear guidance on tax incentives for startup companies in the software sector.

Regarding this issue, The General Department of Taxation - The Ministry of Finance has the following opinions:

Clause 7 and Clause 8, Article 1 of Law No. 32/2013 / QH13 amending and supplementing Article 13 and Article 14 of the Law on Corporate Income Tax as follows:

“7. Article 13 is added as follows:

“Article 13. Tax incentives

1. Apply the tax rate of 15% to:

… b) Income of enterprise from performing new investment projects, including:… software product production …””.

“8. Article 14 is amended and supplemented as follows:

“Article 14. Tax exemption and reduction duration incentives:

1. Incomes of enterprises from the execution of new investment projects specified in Clauses 1, a, and clause 2, Article 13 of this Law and hi-tech enterprises and hi-tech agricultural enterprises are exempt. Tax does not exceed 4 years and 50% reduction of payable tax for no more than 9 subsequent years… ”.

Pursuant to the above provisions, in principle, if an enterprise implementing a new investment project produces software products, income from this project is subject to the tax rate of 10% for a period of 15 years and is exempt from tax. Tax for not more than 4 years, 50% reduction of payable tax for no more than 9 subsequent years.

It is suggested that the Ho Chi Minh City Tax Department works with Mr. Le Minh Vu based on the provisions of law to guide enterprises to comply with the provisions of tax law.