Highlight Incentives for Software production
Consistent with the previous regulations, CIT incentives for software production activities (under the newly-issued Circular 78/2014/TT-BTC dated 18 June 2014 of the MOF on Corporate Income Tax) contain no differences: 4 years of tax exemption, 9 years of 50% CIT reduction, and CIT rate of 10% for 15 years. These incentives are favourable for companies but the actual determination of software production for such incentives remains ambiguous.
Recently, the Ministry of Information and Communication issued a draft Circular guiding the certification of software production activities. It promises software companies a sound base to correctly determine their business nature when applying CIT incentives.
The Circular (when released) will then also be applicable retrospectively for companies who have been in operation, and in our view this will be very helpful in removing current difficulties for software production business.
We highlight the incentives for Software production in the below document.