Deputy Prime Minister Vu Van Ninh this week asked the Finance Ministry to complete a draft resolution on tax incentives for IT firms and collect suggestions from relevant ministries and the Ministry of Justice for submission to the Government this month.

Deputy Prime Minister Vu Van Ninh this week asked the Finance Ministry to complete a draft resolution on tax incentives for IT firms and collect suggestions from relevant ministries and the Ministry of Justice for submission to the Government this month.

On November 24, 2015, the Ministry of Finance submitted to the Prime Minister a number of measures and policies on tax incentives to promote the application and development of IT in Viet Nam.

Ninh also asked the Finance Ministry to discuss with the National Committee on Information Technology Application issues involving extending tax payment schedules for IT firms.

Regarding corporate income tax, IT service and software would be subject to tax preferences. They would be able to enjoy the preferential tax rate of 10 per cent for 15 years. In special cases, companies that employed more than 1,000 workers, could enjoy the preferences for no more than 30 years, and get four-year tax exemptions and 50 per cent tax reduction for no more than nine years.

On personal income tax (PIT), IT workers can enjoy a 50 per cent tax reduction. Meanwhile, some kinds of allowances are not counted as taxable income. The Viet Nam Tax Consultants Association (VTCA) has suggested the special occupational allowance of 25 per cent for salary for IT workers.

The association estimates that the new policy on tax incentives would help make up 25 per cent of GDP growth, attract talented employees and create more than 1 million jobs with high income in IT and other industries.

The preferential tax incentives for the IT sector were also discussed by the National Committee on Information Technology Application at a meeting on September 2015 chaired by Deputy Prime Minister Vu Duc Dam.

At the meeting, Deputy PM Dam required the Ministry of Information and Communications to co-ordinate with the Ministry of Finance to offer clear guidance on tax incentives in the IT field.

Policies must be built in view of encouraging and developing IT enterprises, not simply satisfying users of services, said Dam.