Joint Circular No. 2341/2000/TTLT/BKHCNMT-BTC guides the implementation of Government Decree No. 119/1999/ND-CP dated September 18, 1999 on certain policies and financial mechanisms to encourage enterprises to invest in scientific and technological activities.

JOINT CIRCULAR

JOINT DECREE OF THE MINISTRY OF SCIENCE AND TECHNOLOGY AND THE MINISTRY OF FINANCE JOINT DECREE NO. 2341/2000/TTLT/BKHCNMT-BTC DATED NOVEMBER 28, 2000 GUIDING THE IMPLEMENTATION OF GOVERNMENT DECREE NO. 119/1999/NĐ-CP DATED SEPTEMBER 18, 1999 ON CERTAIN POLICIES AND FINANCIAL MECHANISMS TO INCENTIVIZE ENTERPRISES TO INVEST IN SCIENTIFIC AND TECHNOLOGICAL ACTIVITIES
To incentivize enterprises to invest in scientific and technological activities
The following activities are encouraged for enterprises under this Decision as stipulated in Article 1 of Government Decree No. 119/1999/NĐ-CP and detailed in this Circular:

1. Scientific and technological activities including research and development conducted by enterprises themselves or through contracts with organizations and individuals both domestically and internationally.

Research and development activities include the following stages: basic research, applied research, experimental deployment.

The boundary between research and development and production is defined as follows:

I. SCOPE OF REGULATION AND APPLICABLE OBJECTS

The final stage of research and development involves creating new technology, new products, and small-scale trial production aimed at perfecting the new technology and products before full-scale production and commercialization. When trial production becomes routine, the research and development phase concludes.

1.2 Application of scientific and technological results, technological innovation, and production of new products:

- Applying the outcomes of research and development to practical use;

- Applying existing scientific and technological achievements through technology transfer;

- Significant improvement of existing technology;

- Producing new products or significantly improved versions of existing products.

1.3 Scientific and technological services: These are activities closely linked to research and development, or contributing to the creation, dissemination, application, and knowledge of science and technology. Scientific and technological services include:

a) High-tech services such as: restoration, repair, calibration of machinery, equipment, testing tools, measuring instruments, scientific and technical equipment with automatic control systems, quality inspection, standardization of materials and products;b) Data processing, calculation, and analysis directly supporting research and development;c) Preparation of pre-feasibility and feasibility reports, environmental impact assessment reports;d) Activities related to industrial property protection and technology transfer, including the application of new techniques in production, comprising:

- Industrial property protection activities for inventions and utility models;

- Services supporting technology transfer and the application of new techniques in production (technology selection, installation guidance, trial operation of production lines and equipment to apply transferred technologies, machine inspection and maintenance, guidance on transferred technology processes, training to enhance professional skills and management capabilities to master transferred technologies);

đ) Services related to information, scientific and technological advisory services, management advisory services, business management advisory services, and vocational training to enhance scientific and technological knowledge and management.

2.1 Enterprises operating under the Law on Domestic Investment Promotion (amended) include:

c) Joint venture companies;

d) Private enterprises;

đ) Cooperatives and cooperative unions (referred to as cooperatives);

e) State-owned enterprises;

Article 2. The subjects to which this Decision applies include:

g) Enterprises of political organizations, socio-political organizations, and professional associations registered for business operations according to the law;

a) Limited liability companies;

b) Joint-stock companies;

h) Enterprises established by overseas Vietnamese investors directly investing in Vietnam;

i) Enterprises established by foreign residents in Vietnam directly investing in Vietnam;

k) Enterprises jointly established by Vietnamese citizens and overseas Vietnamese investors, or foreign residents in Vietnam.

2.2 Foreign-invested enterprises and foreign parties participating in joint ventures based on joint venture contracts under the Law on Foreign Investment in Vietnam, including:

a) Wholly foreign-owned enterprises;

b) Joint ventures;

c) Foreign parties participating in joint ventures based on joint venture contracts under the Law on Foreign Investment in Vietnam.

3. Conditions for enjoying incentives:

The entities mentioned in Point 2, Section I of this Circular shall enjoy incentives as prescribed in Government Decree No. 119/1999/NĐ-CP when they meet the following conditions:

a) Enterprises engaging in scientific and technological activities encouraged as specified in Point 1, Section I of this Circular;

b) Have registered for tax payment;

c) Engage in business activities within their registered scope;

d) Adhere to accounting regulations.

II. GUIDELINES FOR TAX INCENTIVES ON ENTERPRISE INCOME TAX

1. Regarding preferential tax rates for enterprise income tax:

1.1 Enterprises operating under the Law on Domestic Investment Promotion (amended) that engage in high-tech applications and scientific and technological services shall be subject to the preferential tax rate for enterprise income tax as stipulated in Clause 1, Article 3 of Government Decree No. 119/1999/NĐ-CP.

The application dossier for preferential tax rates includes:

a) A request form for preferential treatment on enterprise income tax duly signed by the authorized representative and stamped by the enterprise;

b) Establishment decision (if applicable) and Business Registration Certificate (certified copy or original copy with signature and stamp of the enterprise);

c) Tax registration form;

d) Opinion of the competent science and technology management agency;

Documents submitted for the opinion of the competent science and technology management agency include:

a) An application for tax benefits on corporate income tax must be fully signed by the legal representative and stamped with the company seal;

b) The establishment decision (if any) and the business registration certificate (certified copy or copy signed and stamped by the company);

c) The tax registration form;

d) The opinion of the science and technology management agency;

The documents submitted to seek the opinion of the science and technology management agency include:

- For each type of enterprise engaged in high-tech application activities (applying production technology for high-tech components, parts, or advanced technological production lines as prescribed in Point 3, Section I, Circular No. 2345/TT-BKHCNMT dated December 4, 1998 on Guidelines for Determining and Recognizing High-Tech Industrial Enterprises Operating under the Law on Foreign Investment):

+ State-owned enterprises: Feasibility study reports or investment reports, technical designs approved by competent authorities, final accounts of construction projects or handover certificates for putting projects into operation (if final accounts have not been completed);

+ Limited liability companies, joint-stock companies, joint ventures: feasibility study reports or investment reports, technical designs approved by the board of members or shareholders, and final accounts of construction projects or handover certificates for putting projects into operation (if final accounts have not been completed);

+ Private enterprises: Technical designs, contracts, and final accounts of investment construction and installation contracts. In cases where enterprises construct themselves, they must present invoices and receipts for purchasing materials, machinery, and equipment, and evidence that such machinery and equipment have been installed and put into use according to technical designs;

+ Cooperatives: feasibility study reports or investment reports, technical designs approved by the management board, and final accounts of construction projects or handover certificates for putting projects into operation (if final accounts have not been completed);

- For enterprises providing scientific and technological services, the documents include:

+ Scientific and technological service contracts;

+ Final accounts of contracts.

1.2 Foreign-invested enterprises and foreign parties participating in business cooperation based on contracts under the Law on Foreign Investment in Vietnam investing in fields of high-tech application and development, and scientific and technological services shall enjoy tax incentives on corporate income tax as stipulated in Clause 2, Article 3 of Decree No. 119/1999/NĐ-CP. The level of incentives shall be specifically recorded in the Investment License.

For enterprises granted Investment Licenses before the effective date of Decree No. 119/1999/NĐ-CP which have not had their Investment Licenses adjusted by the issuing authority, they shall continue to implement according to the provisions of their Investment Licenses.

If the Investment License does not specify the level of incentives and the enterprise wishes to enjoy tax incentives on corporate income tax as stipulated in Decree No. 119/1999/NĐ-CP, it must submit relevant documents to the directly managing tax authority.

Documents submitted for the opinion of the competent science and technology management agency include:

a) An application for tax benefits on corporate income tax must be fully signed by the legal representative and stamped with the company seal;

b) Investment License (certified copy or copy signed and stamped by the enterprise);

c) The tax registration form;

d) The opinion of the science and technology management agency;

The documents submitted to seek the opinion of the science and technology management agency include:

- For enterprises with projects applying and developing high-tech (applying production technology for high-tech components, parts, or advanced technological production lines as prescribed in Point 3, Section I, Circular No. 2345/TT-BKHCNMT dated December 4, 1998 on Guidelines for Determining and Recognizing High-Tech Industrial Enterprises Operating under the Law on Foreign Investment): Feasibility study reports or investment reports, technical designs approved by competent authorities, final accounts of construction projects or handover certificates for putting projects into operation (if final accounts have not been completed);

- For enterprises providing scientific and technological services: Scientific and technological service contracts, final accounts of contracts.

2. Exemption and reduction of corporate income tax as provided for in Article 4 of Decree No. 119/1999/NĐ-CP:

2.1 Activities exempt from corporate income tax as stipulated in Clause 1, Article 4:

- Income from implementing research and development contracts.

- Income from implementing technical service contracts directly serving agriculture, fisheries, and forestry including:

+ Supplying new crop seeds (before the stage of being allowed for large-scale production), livestock breeds created domestically or imported (before being recognized as advanced techniques), supplying seeds for trial or regionalization purposes;

+ Plant protection services (for agricultural crops, forest trees, medicinal plants...);

+ Livestock disease prevention services (veterinary services, preventing diseases in livestock, poultry, and aquaculture);

+ Providing guidance on agricultural techniques: Crop cultivation, intensive farming, animal husbandry procedures, aquaculture, preservation and processing of agricultural, forestry, and aquaculture products;

+ Survey, planning, and quality inspection services for irrigation works directly serving agriculture;

+ Mapping services for agricultural, forestry, and aquaculture planning;

+ Agricultural, forestry, and aquaculture product analysis services for farmers;

+ Other agricultural, forestry, and fishery promotion activities.

- Income from contributing intellectual property rights, technical secrets, and production processes.

Documents for requesting exemption from corporate income tax include:

a) A request for exemption from corporate income tax duly signed by the authorized representative and stamped by the enterprise;

b) Establishment decision (if applicable) and Business Registration Certificate (certified copy or copy signed and stamped by the enterprise) or Investment License;

c) The tax registration form;

d) The opinion of the science and technology management agency;

Documents submitted for comments from the science and technology management agency include:

Contracts, final accounts of research and development contracts, technical service contracts directly serving agriculture, forestry, and fisheries, or contribution certificates by intellectual property rights, technical secrets, and production processes together with proof of ownership.

2.2 Additional exemptions stipulated in Clause 2, Article 4

Enterprises enjoying incentives under Decree No. 119/NĐ-CP are not required to pay additional corporate income tax arising from high-income gains due to objective advantages from scientific and technological activities, as provided for in Clause 1, Article 10 of the Corporate Income Tax Law.

2.3 Exemptions and reductions of corporate income tax as stipulated in Clause 3, Article 4

Documents for requesting exemption and reduction of corporate income tax include:

a) An application for tax benefits on corporate income tax must be fully signed by the legal representative and stamped with the company seal;

b) The establishment decision (if any) and the business registration certificate (certified copy or copy signed and stamped by the company);

c) The tax registration form;

d) Comments from the science and technology management agency;

Documents sent to solicit opinions from the science and technology management agency for each type of enterprise as stipulated at Point 1.1-d, Section II of this Circular.

e) Financial settlement report and corporate income tax settlement report of the business establishment for the year prior to investment and the year following investment requesting tax exemption and reduction. The enterprise must calculate separately the additional income generated due to new investment based on the degree of tax exemption and reduction, as well as the amount of tax exempted and payable for each period and annually, and settle taxes with the tax authority according to regulations. In cases where the enterprise cannot separately account for the additional taxable income generated due to investment in scientific and technological activities, building new production lines, expanding scale, or technological innovation, the additional taxable income shall be determined based on the ratio between the increased investment value and the total fixed asset value of the enterprise.

Annually, when settling corporate income tax, the tax authority officially determines the amount of corporate income tax that is exempted and reduced.

2.4 Exemption and reduction of corporate income tax for foreign-invested enterprises and foreign parties participating in joint venture contracts under the Law on Foreign Investment in Vietnam as provided for in Clause 4, Article 4.

The application dossier for corporate income tax exemption and reduction includes:

a) A request form for tax benefits on corporate income tax duly signed by the authorized representative and stamped by the enterprise;

b) Investment license and Business Registration Certificate if available (certified true copy or copy signed and stamped by the enterprise);

c) The tax registration form;

d) The opinion of the science and technology management agency;

Documents submitted for comments from the science and technology management agency include:

Feasibility study report or investment report, technical design approved by the competent authority, project settlement statement or handover record upon commencement of operation (if settlement has not been completed);

In cases where the enterprise uses distributed profits for reinvestment, the conditions, ratios, and calculation formulas for refunding paid corporate income tax are implemented according to the guidelines set out in Part II, Section I, Point 6 of Circular No. 89/1999/TT-BTC dated July 16, 1999, issued by the Ministry of Finance regarding taxation on various forms of investment under the Law on Foreign Investment in Vietnam.

2.5 Procedures and deadlines for considering corporate income tax exemptions and reductions:

a) Within ten days from the date of receipt of a complete and valid application dossier for soliciting opinions from the science and technology management agency, the science and technology management agency must provide a reply to the enterprise.

b) Within thirty days from the date of receipt of a complete application dossier for tax benefits on corporate income tax submitted by the enterprise, the directly managing tax authority must notify the enterprise of the tax benefits according to Decree No. 119/1999/NĐ-CP. If the tax authority finds the enterprise's dossier invalid or not in compliance with the objects specified in Decree No. 119/1999/NĐ-CP, it must notify the enterprise within fifteen days from the date of receipt of the dossier.

III. GUIDELINES FOR IMPLEMENTING LAND USE FEES, LAND TAX, AND LAND USE TAX EXEMPTIONS AND REDUCTIONS

1. Enterprises operating under the Law on Encouraging Domestic Investment (amended) investing in scientific and technological activities as stipulated at Point 1, Section I of this Circular are entitled to land use benefits for land allocated or leased for constructing scientific and technological research facilities, laboratories, stations, experimental workshops as prescribed in Clause 1, Article 5 of Decree No. 119/1999/NĐ-CP.

Land use tax as stipulated at Clause 1-c, Article 5 of Decree No. 119/1999/NĐ-CP includes: Agricultural land use tax as prescribed in the Law on Agricultural Land Use Tax adopted by the National Assembly on July 10, 1993, and house and land tax as prescribed in the Ordinance on House and Land Tax issued by the State Council (now the Standing Committee of the National Assembly) on July 31, 1992, and implementing regulations.

The application dossier for land use fee, land lease fee, and land use tax exemptions and reductions includes:

a) Enterprise's letter of request;

b) Establishment decision (if applicable) and business registration certificate (certified true copy or copy signed and stamped by the enterprise);

c) The tax registration form;

d) Decision on land allocation by the competent state agency or land lease contract;

e) Opinion of the science and technology management agency;

Documents sent to solicit opinions from the science and technology management agency for each type of enterprise as stipulated at Point 1.1-d, Section II of this Circular.

2. Foreign-invested enterprises and foreign parties participating in joint ventures based on joint venture contracts under the Law on Foreign Investment in Vietnam are entitled to land lease fee benefits for the area leased for constructing laboratories, experimental workshops, or for conducting research and development and experiments as prescribed by current laws.

The application dossier for land lease fee benefits includes:

a) Request form for land lease fee benefits according to current legal regulations on land lease fees applicable to foreign investment in Vietnam, duly signed by the authorized representative and stamped by the enterprise;

b) Investment License (certified copy or copy signed and stamped by the enterprise);

c) The tax registration form;

d) Certificate of land use rights lease (certified true copy or copy signed and stamped by the enterprise);

e) Opinion of the science and technology management agency;

Documents submitted for comments from the science and technology management agency include:

Feasibility study report or investment report, technical design approved by the competent authority, project settlement statement or handover record upon commencement of operation (if settlement has not been completed);

3. Procedures and deadlines for considering land use fee, land lease fee, and land use tax exemptions and reductions:

The science and technology management agency is responsible for replying within the time limit stipulated at Point 2.5-a, Section II of this Circular.

The directly managing tax authority for land use, land lease fees, and land use tax, after receiving a valid application dossier for land use fee, land lease fee, and land use tax exemptions and reductions, must issue a decision on exemptions and reductions within thirty days from the date of receipt of the dossier.

In cases where tax exemptions or reductions for agricultural land use are granted, within ten days from the date of examination and finding sufficient conditions, the direct tax authority must submit the file along with a request letter to the Provincial Tax Department for consideration. Within twenty days, the Provincial Tax Department must present the People's Committee of the province or centrally governed city with a decision on tax exemption or reduction for each specific case.

If the application for tax exemption or reduction for land use fees, land rental fees, or land use taxes is not valid or does not meet the required conditions, the tax authority must notify the enterprise of this fact within the latest fifteen days from the date of receipt of the file.

IV. GUIDELINES FOR IMPLEMENTING TAX EXEMPTIONS:

The entities mentioned in Point 2, Section I of this Circular that import machinery, equipment, component parts, raw materials, scientific and technological equipment with automatic control systems, experimental samples, measuring and testing tools serving directly for research and development projects and contracts which cannot be produced domestically or whose quality and quantity requirements are not met shall be exempted from import duties according to Article 6 of Decree No. 119/1999/NĐ-CP.

The application for import tax exemption includes:

a) A letter from the enterprise requesting an import tax exemption for machinery, equipment, raw materials, scientific and technological equipment with automatic control systems, experimental samples, measuring and testing tools serving directly for research and development projects, specifying the quantity, value, and commitment to use them for their intended purpose;

b) Investment license or business registration certificate issued by the competent authority;

c) Opinion of the science and technology management agency regarding the research and development topics, contracts, and projects, clearly stating that the objects eligible for import tax exemption are machinery, equipment, raw materials, scientific and technological equipment with automatic control systems, experimental samples, measuring and testing tools... serving directly for research and development topics, projects, and contracts, accompanied by relevant research and development project files;

d) Import plan for machinery, equipment, raw materials... serving directly for research and development topics, contracts, and projects of the enterprise;

e) Entrusted import contract (if it is entrusted imported goods).

Based on the above documents, comparing with the list of raw materials, machinery, and equipment that have been produced domestically according to current regulations, the Customs Office where the enterprise registers for import procedures will monitor and process tax exemption procedures for each specific shipment. Quarterly, all Customs Offices must compile and report the total value of imported goods and the quantities of major imported goods eligible for tax exemption to the General Department of Customs, Ministry of Finance, and the Ministry of Science and Technology.

V. GUIDELINES FOR IMPLEMENTING CREDIT PRIVILEGES

Enterprises operating under the Law on Encouraging Domestic Investment (amended) that engage in activities specified in Point 1, Section I of this Circular may borrow medium-term and long-term loans at preferential interest rates. The loan amount can be up to 70% of the investment capital at the Development Support Fund and the Scientific and Technological Development Support Fund.

In cases where enterprises are guaranteed loans by the Development Support Fund for medium-term and long-term loans at the Vietnam Bank for Social Policies, the Development Support Fund will support post-investment interest rates for these enterprises.

For enterprises borrowing from banks to produce scientific products for export (software, technology...) will be supported with interest rates on bank loans from the Export Support Fund.

Procedures and steps for obtaining loan guarantees, borrowing at preferential interest rates, post-investment interest rate support, and bank loan interest rate support shall be carried out in accordance with the Charter of the Development Support Fund, the Export Support Fund, the Scientific and Technological Development Support Fund, and the current laws governing the operations of credit organizations.

VI. GUIDELINES FOR IMPLEMENTING OTHER INCENTIVE POLICIES:

1. Guidelines for preferential use of technology resulting from scientific and technological research projects funded by the state budget as stipulated in Clause 1, Article 8 of Decree No. 119/NĐ-CP:

Enterprises using technology resulting from scientific and technological research projects funded by the state budget (excluding technologies classified as national security secrets and other industrial property objects currently protected) only need to pay remuneration to the authors who developed such technology. The amount of remuneration paid to the authors is 30% of the transfer price of the technology according to Clause 3 and 4 of Article 23 of Decree No. 45/1998/NĐ-CP dated July 1, 1998 of the Government "Detailed Regulations on Technology Transfer" and Circular No. 1245/1999/TT-BKHCNMT dated July 12, 1999 of the Ministry of Science, Technology, and Environment "Guidelines for Implementing Decree No. 45/1998/NĐ-CP dated July 1, 1998 of the Government on Detailed Regulations on Technology Transfer."

The author of the technology referred to in this Circular as the result of a scientific research project funded by the state budget is understood to be the principal investigator of the project and the team directly involved in scientific research listed in the main implementation cooperation list recorded in the "Registration Certificate for Research and Development Project Results" issued by the Ministry of Science, Technology, and Environment.

2. Guidelines for financial support for enterprises implementing research projects to create new technologies in priority industries and fields as stipulated in Clause 2, Article 8 of Decree No. 119/NĐ-CP:

2.1. Eligible recipients:

In addition to research projects selected according to the general regulations, if enterprises have research projects to create new technologies in priority industries encouraged by the state (Annex 5), implemented independently or jointly with scientific institutions, they will be supported financially by the state up to a maximum of 30% of the total project funding.

2.2. Organizing selection:

The Ministry of Science, Technology and Environment shall annually announce on mass media the list of scientific and technological research fields under priority sectors encouraged by the State for enterprises to implement or cooperate with scientific agencies to carry out, along with the deadline for submitting applications requesting State financial support for scientific research.

Enterprises shall base their scientific research tasks serving production and business activities and the scientific and technological research fields encouraged by the State to prepare applications requesting State financial support.

The application for financial support includes:

a) An application form for the Ministry of Science, Technology and Environment to consider providing financial support for scientific research according to the model (Annex 1).

b) A scientific research outline according to the unified model issued by the Ministry of Science, Technology and Environment (Annex 2).

The Ministry of Science, Technology and Environment shall coordinate with Ministries and Sectors to establish specialized Appraisal Councils to examine the scientific nature, feasibility, and budget estimate of the total funds required to implement the research project, serving as the basis for considering financial support and the level of support for enterprises implementing scientific research projects, but the amount of financial support shall not exceed 30% of the total funds spent on the implementation of the research project by the enterprise.

Based on the annual state budget allocated for scientific research support for enterprises and the results of specialized appraisal councils, the Ministry of Science, Technology and Environment shall decide the list of scientific research projects of enterprises eligible for support and the level of support for each research project.

If the scientific research projects of enterprises applying for State financial support overlap with research projects at various levels using state budget funds that are currently being implemented or have been successful, the Ministry of Science, Technology and Environment will not consider providing financial support. The Ministry of Science, Technology and Environment has the responsibility to inform enterprises about such overlaps.

2.3. Tasks and responsibilities of management agencies and enterprises receiving financial support for scientific research:

After receiving notification from the State regarding the scientific research projects supported financially, enterprises must open a deposit account at the Treasury where their main office is located, in accordance with the regulations of the Provincial or Central City Treasury Director, and notify the Treasury account number to the Ministry of Finance for the allocation of financial support.

The Ministry of Science, Technology and Environment and enterprises receiving financial support must sign a contract according to the prescribed model to implement the project.

Enterprises must comply with the expenditure regulations for scientific research funds according to current financial regulations for science and technology. This financial support is exempt from taxes.

The Ministry of Science, Technology and Environment shall coordinate with relevant agencies to inspect the proper and effective use of financial support. In case of misuse of funds, the funding agency has the right to stop or recover the allocated funds.

Annually, enterprises receiving financial support must submit periodic reports according to the prescribed model (Annex 3) to the Ministry of Science, Technology and Environment and the Ministry of Finance. Based on these reports, the funding agency will decide to continue allocating funds according to the approved plan.

Upon completion of the scientific research project, the leading enterprise must organize an acceptance committee to evaluate the scientific and technological outcomes achieved and the use of the supported budget funds. Within fifteen days following the conclusion of the acceptance committee, the enterprise must submit a report on the achievements of the scientific research project according to the prescribed model (Annex 4), along with the minutes of the acceptance committee to the Ministry of Science, Technology and Environment. The Ministry of Science, Technology and Environment and the enterprise will organize the acceptance and liquidation of the contract.

Enterprises have the right to request related agencies involved in providing financial support from the budget to protect information related to the scientific research projects they undertake for the benefit of the enterprise.

3. Guidelines for using additional income after tax from the application of new technology as stipulated in Clause 3, Article 8:

Enterprises operating under the Law on State-Owned Enterprises may allocate 50% of the additional income after tax generated from the application of new technology for reinvestment in scientific and technological activities and rewarding individuals and groups within and outside the enterprise who contribute to researching, creating, and organizing the application of the new technology.

Reinvestment in scientific and technological activities includes activities such as constructing facilities to serve research and development and scientific and technological service bases, purchasing scientific equipment and technological literature, conducting scientific research, training, and upgrading staff to master scientific and technological knowledge...

The allocation for rewards shall be carried out annually starting from when additional income is generated from the application of new technology. The maximum period for allocation is three years from when additional income is generated. In cases where there is no additional profit in a given year, no allocation for rewards shall be made.

VII. IMPLEMENTATION ORGANIZATION

1. Determining areas with difficult socio-economic conditions, areas with extremely difficult socio-economic conditions:

The determination of areas with difficult socio-economic conditions and areas with extremely difficult socio-economic conditions is specified in the list B, C of Decree No. 51/1999/NĐ-CP of the Government dated July 8, 1999.

2. For beneficiaries entitled to preferential treatment under Decree No. 119/1999/NĐ-CP:

- After enjoying preferential benefits, if there is a change in the investor of investment projects in scientific and technological activities, the new investor will continue to enjoy the remaining preferential benefits and is responsible for fulfilling all obligations of the previous investor to be entitled to preferential benefits.

- In cases where enterprises have already enjoyed preferential levels based on conditions registered for their scientific and technological activities, but during implementation, there are changes to the registered conditions leading to changes in preferential levels according to Decree No. 119/1999/NĐ-CP, the enterprise must declare such changes to the competent authority within the latest five days to adjust the preferential levels accordingly.

- Enterprises that engage in fraudulent behavior to enjoy preferential levels under Decree No. 119/1999/NĐ-CP and this Circular, or intentionally fail to declare changes in investment conditions for scientific and technological activities to continue enjoying preferential levels, shall, in addition to returning the amounts received through preferential treatment, be subject to administrative penalties or criminal prosecution depending on the severity of the violation as stipulated by law.

- Where enterprises are entitled to different preferential regimes prescribed in various legal documents, they have the right to choose a suitable preferential level for themselves.

3. Regarding tax authorities, financial authorities, and science and technology management agencies:

- Tax authorities, financial authorities, and science and technology management agencies are responsible for creating favorable conditions for enterprises investing in scientific and technological activities and promptly detecting and preventing actions exploiting preferential levels prescribed in Decree No. 119/1999/NĐ-CP and this Circular.

- The Ministry of Science, Technology, and Environment shall provide comments in writing on contracts, projects, research and development topics valued at 100 million dong or more, scientific and technological service contracts, technical services directly serving agriculture valued at 200 million dong or more, cases involving capital contributions with intellectual property rights, technical secrets, production processes, and scientific and technological investment projects belonging to Group A.

- Provincial Departments of Science, Technology, and Environment shall provide comments on remaining scientific and technological activities where enterprises invest in scientific and technological activities.

- Civil servants who abuse their positions and powers to deliberately violate the provisions of Decree No. 119/1999/NĐ-CP and this Circular, causing damage to the State budget, shall be subject to disciplinary action, administrative penalties, or criminal prosecution depending on the severity of the violation as stipulated by law.

4. This Circular takes effect from the date Decree No. 119/1999/NĐ-CP dated September 18, 1999, of the Government comes into force.

Any previous regulations contrary to this Circular are hereby abolished.

During implementation, if any issues arise, enterprises, sectors, and localities are requested to promptly report them to the Ministry of Finance and the Ministry of Science, Technology, and Environment for further guidance and supplementary instructions.

ANNEX 1

SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness

APPLICATION FOR FINANCIAL SUPPORT FOR SCIENTIFIC RESEARCH

Respectfully submitted to: Ministry of Science, Technology, and Environment

1. Enterprise name:

2. Main office address:

3. Telephone ... Fax ...

4. Authority deciding establishment (if any):

5. Type of enterprise:

- State-owned enterprise:

- Enterprise with foreign investment:

- Other enterprise:

6. Name of the head of the research topic:

Scientific title:

Workplace:

7. Title of the scientific research topic:

8. Total budget for implementing the research topic:

9. Financial support requested from the State:

10. Enterprise's recommendation regarding information confidentiality:

- Ordinary type:

- Non-public type:

11. Declaration: We hereby declare that all submitted documents to your esteemed Ministry are true. If the State supports our enterprise's research project financially, we assure to fully implement all contents approved in the research outline.

ANNEX 2

DESCRIPTION OF THE RESEARCH TOPIC

* Subsequent pages follow the template issued by the Ministry of Science, Technology, and Environment.

ANNEX 3

PERIODIC REPORT ON THE IMPLEMENTATION STATUS OF THE RESEARCH TOPIC

Report recipient: Ministry of Science, Technology, and Environment, 39 Tran Hung Dao Street, Hanoi; Ministry of Finance, 8 Phan Huy Chu Street, Hanoi.

1. Topic name:

2. Leading enterprise name:

3: Address:

4. Telephone: Fax:

5. Main content implemented from day month year to now

6. Scientific and technological results:

7. Total budget:

Where:

- Enterprise budget:

- Budget support from the state:

8. Budget received from the state up to the reporting date:

9. Total budget used:

Where:

- Enterprise budget:

- Budget support from the state:

10. Detailed report on the use of state budget funds:

11. Self-assessment:

- Achievements:

- Advantages:

- Difficulties:

12. Planned work to be carried out in the near future:

13. Recommendations:

ANNEX 4

SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness

FINAL REPORT ON THE IMPLEMENTATION RESULTS OF THE RESEARCH TOPIC AFTER TESTING

1. Leading enterprise name:

2. Main office address:

3. Telephone: Fax:

4. Implementation results:

- Achieved target as stated in the description:

- Exceeded target as stated in the description:

- Did not achieve target as stated in the description:

5. Prospects for application:

- Promising:

- Promising but requires further improvement:

Issues requiring further improvement:

- Not promising:

Reason:

6. Specific results:

7. Budget usage situation:

Total budget used:

Of which state-funded budget:

8. Detailed report on the use of state budget funds:

ANNEX 5

LIST OF PRIORITY FIELDS OF SCIENCE AND TECHNOLOGY ENCOURAGED BY THE STATE FOR ENTERPRISES TO IMPLEMENT

- Research to create new products for export or to replace imported materials, rare materials, or materials with special properties.

- Research to create new biotechnology to produce high-quality crop and livestock varieties, human and animal medicines, and crops meeting international standards and having high economic efficiency.

- Study to create technology chains reaching advanced levels, high-tech component production technologies.

- Study to develop production technologies using less fuel, raw materials, and materials compared to existing technologies.

- Study environmental pollution treatment technologies and environmental protection, solid, liquid, and gas waste processing technologies.