A production line of Vietnamese technology equipment products. — VNA/VNS Photo
The draft Law on Digital Technology Industry proposes many regulations and policies to support the development of the digital technology industry to become an economic sector that contributes greatly to the country's economy.
It is also expected to stipulate a number of special policies for semiconductor industry developments.
The draft Law on Digital Technology Industry, being developed by the Ministry of Information and Communications (MIC), includes six chapters and 90 articles.
The extensive regulations are aimed at promoting the development of the digital technology industry into an economic sector that contributes greatly to the country's economy.
Việt Nam has become a favoured environment to nurture and develop digital technology businesses.
In the draft proposal, the MIC states that the current legal regulations on the information technology industry were issued over the past 17 years, at a time when the information technology industry was just starting to develop in Việt Nam.
These regulations have not adapted to new problems that arise in the practical development of the information technology industry.
The draft law has proposed a number of outstanding policies to promote the development of the digital technology industry, develop the brand of Việt Nam's digital technology industry and develop domestic and foreign markets, as well as investing, purchasing and selecting suppliers of digital technology products and services using State budget capital.
The State provides partial financial support when organisations and businesses participate, with a minimum support level of 30 per cent and a maximum of no more than 80 per cent of the total cost.
In addition, digital technology product manufacturing activities in which at least 30 per cent of Vietnamese enterprises out of the total number of enterprises participate and perform assembly contracts, supply of components, raw materials and domestic production services to produce products and at least 30 per cent of the product cost is created by Vietnamese enterprises, are entitled to preferential corporate income tax rate of 10 per cent for a period of 15 years.
Regarding support for digital technology businesses, it is expected that there will be policies to support business development, incentives for digital technology industry activities, credit policies for digital technology businesses and financial sources for digital technology industry development.
In particular, the draft law proposes that enterprises with projects to produce digital technology products may borrow investment credit from the State according to the provisions of law on investment credit and receive a loan at preferential interest rates from the Việt Nam Environmental Protection Fund for the project's pollution treatment and environmental protection items.
Digital technology product production projects will enjoy exempted or reduced land use fees and land rent according to the provisions of land law. Such projects using land are eligible for compensation, support and resettlement funding of investment projects at the highest level according to the provisions of land law.
There are also preferential policies for projects of a special nature and on a large scale.
These projects will enjoy special investment incentive policies on corporate income tax and other incentives according to the provisions of investment law, corporate income tax law and other relevant legal regulations and the projects' costs will be included in deductible expenses to determine taxable income for R&D activities, which is 150 per cent of the actual costs of this activity when calculating corporate income tax.
Actual R&D costs are determined according to the provisions of accounting law, personal income tax exemption for a period of five years for income from salaries and wages of experts, scientists and people with special talents working on projects. — VNS