On June 28, 2016, Ministry of Science and Technology and Ministry of Finance issued Joint Circular No. 12/2016/TTLT-BKHCN-BTC providing guidance on allocation and management of the science and technology development fund in enterprises. Accordingly, this Circular specifies:
Enterprises are incorporated under the Law, government authorities and other relevant entities are permitted to establish science and technology development fund. The Fund can be organized in one of these manners:
- Establish as an organization without judicial personality and directly under an enterprise
- Not establish as an organization and enterprises’ officials who conduct multiple concurrent tasks operate.
The Fund may be financed by the following sources:
- CIT assessable income in the tax period;
Enterprises are not state-owned enterprises shall self-decide extraction rate but not exceed 10% of CIT assessable income.
- The corporation or parent enterprise transfers parts of its science and technology development fund to the relevant funds of its subsidiaries or affiliates or vice versa.
The transfer of the fund shall not be applied in following cases: Foreign-invested enterprises transfer their fund to oversea parent enterprise and parent enterprise in Vietnam transfers its fund to oversea subsidiaries.
Besides, this Circular specifies allocation and management of the fund.
This Circular comes into effect from September 01, 2016 and is applied for allocation, management and usage science and technology development fund of enterprises from CIT tax period 2016.
