THE GOVERNMENT
No. 128/2000/QD - TTg
THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
Hanoi, November 20, 2000
DECISION
On a number of policies and measures to stimulate investment and
development of the software industry
THE PRIME MINISTER
Based on the Law of Government Organization 30 September 1992;
Based on Government Resolution number 07/2000/NQ-CP of 05 June
2000 on building and development of the software industry for the period
2000-2005;
According to the proposal of Ministry of Science, Technology and
Environment;
DECIDES :
Article 1. Scope and application
1. This decision defines a number of policies and measures to
stimulate organizations and individuals nationally from all economic sectors,
overseas Vietnamese and overseas organizations and individuals, to invest in
software manufacturing and services in Vietnam (hereinafter called software
business).
2. The stimulation and preferential treatments defined in this decision
apply to software businesses. In businesses with many different operations,
the preferential treatment defined in this decision only applies in relation to
software manufacturing and service operations.
Article 2. Terminology used in this decision
In this decision, the terms below are defined as follows:
1. Software is understood to be programs, documents describing
programs, help documents and digital content.
a) Programs are a collection of commands, command strings
portrayed in any language, code or coding system and displayed or saved in
information devices (with or without attachment to related information),
used directly or indirectly after passing through one or both of the following
steps:
- Transferred from one language, code or coding system to another;
- Ported from one information device to another; as a tool with the
capability of processing information or establishing some function or other.
b) Documents describing programs and help documents are
documents portrayed in any form with contents describing programs,
introductions, installation instructions, use, upgrade, corrections or other
instructions related to use and exploitation of programs.
c) Digital content consists of:
- Basic data being a collection of data arranged and saved in digital
form;
- Digital works are collections of works saved in digital form.
2. Software products are software manufactured and portrayed or
saved in any one self contained form or other, which can be traded or
bartered in exchange for other usable objects. Types of software products
consist of:
a) Embedded software is software which is placed ready-made into a
manufacturer’s equipment and used immediately in conjunction with that
equipment which does not need installation by a user or a third person.
b) Packaged software are software products which can be use
immediately after a user or service provider has loaded it onto a machine or
system. This software is usually supplied in the form of floppy disk, CD; via
any other information carrying device or passed over a computer network.
Packaged software is usually divided into two kinds: system software and
application software (for example: operating systems, development tools,
programming languages, word processing, spreadsheets, anti-virus,
accounting, teaching, financial management, material management,
scientific calculation and technical software, drawing, etc.).
c) Customized software are software products developed according to
the specific and individual requirements of customers. Customized software
can be developed from scratch or designed according to the requirements of
customers based on software available on the market.
d) Digital information products are digital content saved on some
device or other.
3. Software services used to show each direct operation serving in the
production, exploitation, research, use, education, publicizing and other
similar operations relating to software.
Software services consist of the services of: software consultancy;
integration, systems supply; professional software services; software
processing; data processing services, instruction services, training and
education services and organization of software labor export.
a) Software consultancy services consist of consulting, supply of
information, instructions, exchange of software, research on requirements,
design experience and solutions, loading, computer network system
upgrades.
b) Integration and system supply services consist of consulting,
hardware connection, network equipment and special software used in a total
system, and associated instruction and training.
c) Professional software services consist of software development
specifically for customers, technical assistance, instruction, management,
loading, upgrades, maintenance, warranty, information technology systems
integrity.
d) Data processing services are services for data, digital electronic
data processing for customers.
e) Software education and training services are instruction, training on
specialties related to the software industry.
Article 3. Business income tariff taxes
1. Vietnamese software businesses and foreign software businesses
operating in Vietnam not subject to the amended Law on Foreign investment
in Vietnam, enjoy business income tariff taxes at the following levels:
a) Tariff 25%
b) Tariff 20% in relation to business investment in areas suffering
difficult socio-economic conditions.
c) Tariff 15% in relation to business investment in areas suffering
particularly difficult socio-economic conditions.
Investment areas at points b and c of this clause are defined according
to Appendix List B and C attached to Government Decision number
51/1999/NQ-CP of 08 July 1999 defining implementation details of the Law
to stimulate investment in the nation (as amended).
2. Software businesses not subject to the amended Law on Foreign
investment in Vietnam enjoy business income tariff taxes of 10%.
3. Vietnamese residing overseas investing in the nation in the software
industry according to the Law on Foreign investment and foreigners
investing in the software industry, enjoy tariff taxes on transfer of profits
overseas in relation to income from software manufacturing and service
operations as defined in article 50 of Government Decision number
24/2000/NQ-CP 31 July 2000 on defining implementation details of the Law
on Foreign investment in Vietnam.
Article 4 .Tax free business income
Software businesses receive tax free business income for a period of
four years, from the date taxable income is produced and are not required to
submit a business income tax return supplement in relation to income from
software manufacturing and service operations.
The Minister of Finance is to specifically guide the establishment of
tax free business income as defined in this Article.
Article 5 . Income tax in relation to high income earners
Vietnamese professionals directly participating in software
manufacturing and service operations pay tax at the initial and progressive
levels as defined in relation to foreigners.
Article 6 . Tax rate increases
Software products and services enjoy the highest preferential
treatment on Tax rate increases.
The Minister of Finance is to specifically guide the establishment of
Tax rate increases as defined in this Article.
Article 7 . Import Export tax
1. Imports of raw and working materials directly serving software
product manufacturing operations and not produced by national
manufacturers are tax free. The Ministry of Science, Technology and
Environment is to promulgate a list of raw and working materials serving the
manufacturing of software products not possessed by the nation’s
manufacturers in order to create a basis for determination of preferential
treatment on import tax. The list is to be updated annually.
2. Export of software products is tax free.
Article 8 . Preferential credit
Vietnamese businesses with software manufacturing and service
operations can apply for official investment assistance from the National
Development Assistance Fund as defined in Government Decision number
43/1999/NQ-CP of 29 June 1999 on the National Development Assistance
Fund.
Article 9. Preferential land use and rent
1. Vietnamese software businesses attract free or reduced land use
costs; land use tax as defined in Government Decision number 51/1999/NQCP of 08 July 1999.
2. Software businesses subject to the amended Law on Foreign
investment in Vietnam enjoy preferential treatment as defined in decisions
on land rent costs in force at the time.
Article 10 . Protecting software copyrights
The Ministry of Culture and Information has primary responsibility
for collaborating with Ministries and branches concerned to check legal
procedures in force at the time in order to promulgate according to law, or
report to the service with jurisdiction to promulgate legal procedures related
to the protection of software product copyrights; strengthen capabilities,
operational effectiveness of service management and software copyright
enforcement.
Article 11. Training and development of human resources
1. Organizations and individuals from every economic sector are to
establish information technology training bases. These bases enjoy
preferential treatment for information technology training operations in
relation to software business.
2. The Ministry of Education and Training primary is responsible for
collaborating with Ministry of Science, Technology and Environment, the
General Directorate of Post and Telecommunications and Ministries and
branches concerned with reporting to Government to make a plan to expand
human resource training to meet the requirements of building and
developing the software industry and Internet projects serving education and
training.
3. The General Directorate of Post and Telecommunications has
primary responsibility for collaborating with the Ministry of Finance, the
Ministry of Education and Training and Ministries and branches concerned
to promulgate policy for lecturers, school teachers, students and school
children in schools in the national education system to enjoy a regime of free
or low cost Internet access at training bases.
Article 12. Creation of favorable telecommunications
infrastructure
The General Directorate of Post and Telecommunications has primary
responsibility for collaborating with Ministries and branches concerned with
promulgating policy, defining specific aims guaranteed to strengthen the
competitive environment, create favorable conditions for software business
participating in telecommunications and Internet service operations; to
supply adequate and favorable high speed, high quality telecommunications
and Internet services for users, lower subscription rates to be comparable
with countries in the region; to permit the software industry to concentrate
and allow individual Internet gateway connections into the international
Internet system for all software businesses in these areas.and for software
businesses to subscribe to Internet services through these areas which are
adequate, easy use to use and have regionally competitive pricing.
Article 13. Publication and inspection of software exports and
imports
The Ministry of Culture and Information has primary responsibility
for collaborating with Ministries and branches concerned with guidance to
improve procedures for software publication, export and import, especially
programs, documents describing programs and help documents, to be
established quickly and without causing inconvenience, congestion, damage
to organizations and individuals with the rights, related privilege; at the
same time there must be comprehensive, coordinated measures to prevent
acts of misuse impacting on national security and the preservation of
national identity and culture.
Article 14. Implementation
This decision comes into force 15 days from the date of signing.
Ministers, Heads of Ministerial commissions, Heads of Government
agencies, Chairmen of provincial Peoples Committees, cities under Central
control are responsible for implementing this Decision.
For the Prime Minister
Deputy Prime Minister
(Signed)
Pham Gia Khiem