Proposal for a super tax deduction mechanism for strategic technology

The draft Law on High Technology (amended) proposes a "super tax deduction" mechanism, allowing enterprises to calculate 200% of actual costs for strategic technology research and development activities into deductible expenses when calculating income tax.

Enterprises producing strategic technology products will enjoy preferential policies and special support.

On September 4, the draft Law on High Technology (amended) was sent to the Ministry of Justice for appraisal. A prominent policy is the "super tax deduction" mechanism, allowing enterprises to calculate the cost of strategic technology research and development (R&D) activities into deductible expenses when calculating income tax at 200% of the actual cost.

One of the core and most influential changes of the draft law is "strategic technology", defined as high technology that is prioritized for investment and development, has the ability to create breakthrough development, plays a fundamental role for industries and services, or is of strategic importance to national defense and security.

Enterprises producing strategic technology products will enjoy preferential policies and special support, including tax incentives, R&D funding support, access to investment funds, support for human resource training and priority use of shared infrastructure.

Changing the mechanism for flexibly determining priority technologies is also another noteworthy new point. Accordingly, the draft has removed rigid regulations on 4 priority high-tech fields (information technology, biology, new materials, automation), replacing them with qualitative and quantitative criteria to determine high technology and strategic technology. The list of strategic technologies will be issued by the Prime Minister and reviewed and updated periodically to ensure timeliness.

Along with that, breakthrough incentive policies, especially on tax, are added, linked to actual efficiency instead of widespread incentives as before. However, incentive policies on tax, land, credit... will be linked to more effective binding conditions such as localization rate, commitment on technology transfer level, human resource training and domestic R&D investment.

The draft law also emphasizes the building of a synchronous development environment; adding regulations on the formation of a high-tech ecosystem as a new pillar, creating a connecting environment between businesses, research institutes, universities, start-up organizations and investment funds. In particular, the high-tech park is identified as the center of the innovation ecosystem, playing a role in connecting and spreading technology.

The "high-tech urban" model (Tech City) is a completely new concept that has been added and legalized. This is where high-tech zones are placed in an integrated, modern living and working environment. This model aims at thoroughly decentralizing management, creating maximum convenience for people and businesses.

MR. PHUONG

Source: https://www.sggp.org.vn/de-xuat-co-che-sieu-khau-tru-thue-doi-voi-cong-nghe-chien-luoc-post811561.html