What is management of assets created using the Fund for Science and Technology Development in enterprises in Vietnam?

What is management of assets created using the Fund for Science and Technology Development in enterprises in Vietnam?

Article 5 of Circular 67/2022/TT-BTC (effective from December 23, 2022) stipulates management of assets created using the Fund for Science and Technology Development in enterprises as follows:

1. Each enterprise shall document the fixed assets created using its Fund to have them managed in accordance with regulations of law, and shall not include depreciation of these fixed assets in its deductible expenses upon determination of its income subject to CIT. Such fixed assets include:

a) Fixed assets created to serve the enterprise’s science and technology activities;

b) Machinery and equipment purchased with transferred technologies as prescribed in Article 7 of the Law on Technology Transfer in order to partially or entirely replace the enterprise’s technologies in use with more advanced ones with the aims of enhancing productivity and quality of products or developing new products according to Point c Clause 3 Article 10 of the Government’s Decree No. 95/2014/ND-CP dated October 17, 2014;

c) Machinery and equipment purchased to serve technology innovation or directly serve the enterprise’s business in 02 years (2022 and 2023) as prescribed in Point b Clause 3 Article 3 of the National Assembly’s Resolution No. 43/2022/QH15 dated January 11, 2022.

2. Costs of repair or renovation of fixed assets which have been created using the enterprise’s Fund shall be also covered by such Fund.

3. If fixed assets which have been created using the Fund to serve the enterprise’s science and technology activities are yet to be fully depreciated but are transferred to serve the enterprise’s business operations, their residual values shall be recorded as other incomes and depreciated as deductible expenses upon determination of taxable income.

4. If fixed assets which have been created using the Fund to serve both science and technology activities and business operations of the enterprise are yet to be fully depreciated, they shall be managed in accordance with the Ministry of Finance of Vietnam’s regulations on management, use and depreciation of fixed assets, and the enterprise shall not include depreciation of such fixed assets in its deductible expenses upon determination of taxable income.

5. If fixed assets which have been created as a result of the enterprise’s science and technology activities are transferred to serve the enterprise’s business operations, their values shall be recorded as other incomes and depreciated as deductible expenses upon determination of taxable income.

6. If fixed assets purchased using the enterprise’s Fund are transferred, the enterprise shall determine the residual values of such assets to record an increase or decrease in its Fund upon transfer of such assets.

7. If fixed assets which are used for the enterprise’s business operations are transferred to serve its science and technology activities, their residual values shall be determined to be recorded as expenses on purchase of fixed assets using the Fund, and shall be managed according to Clause 1 of this Article.

8. The liquidation of assets used for serving an enterprise’s science and technology activities shall comply with prevailing regulations.

9. Other assets shall be managed and properly used for defined purposes as prescribed.

What is management of Fund for Science and Technology Development in enterprises in Vietnam in case of enterprise restructuring?

Article 6 of Circular 67/2022/TT-BTC (effective from December 23, 2022) stipulates management of Fund for Science and Technology Development in enterprises in Vietnam in case of enterprise restructuring as follows:

1. If a new enterprise is established after the enterprise restructuring in accordance with regulations of the law of Vietnam, this new enterprise shall inherit, manage and use the Fund(s) of the former enterprise(s).

2. If the enterprise restructuring is not subject to the provisions of Clause 1 of this Article, the enterprise(s) existing after the restructuring shall inherit, manage and use the Fund(s) of the enterprise(s) existing before the restructuring. Assignment of such Funds shall be subject to decision of relevant enterprise(s) and must be notified to tax authorities.

What is reporting on contribution, transfer and use of Fund for Science and Technology Development in enterprises in Vietnam?

Article 7 of Circular 67/2022/TT-BTC (effective from December 23, 2022) stipulates reporting on contribution, transfer and use of Fund for Science and Technology Development in enterprises as follows:

1. Each enterprise shall make annual report on contribution to, transfer and use of its Fund using Form No. 03-6/TNDN enclosed with the Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance of Vietnam.

2. In case of transfer of Funds between the enterprises as prescribed in Point c Clause 2 Article 4 of this Circular, the receiving enterprise shall make reports on receipt and use of transferred money.

3. Reports on contribution, transfer and use of Funds shall be submitted to the competent authorities mentioned in Clauses 1, 4 Article 11 of the Government’s Decree No. 95/2014/ND-CP dated October 17, 2014. Such reports shall be submitted within the same time limit with annual CIT finalization forms.

Best Regards!