Legal News

[Taxation] Tax Policy of Software Development Business

2024/05/02

The GDT issued Official Letter No. 1741/TCT-CS dated April 25, 2024, guiding the tax policy for software development projects. Software development and providing services to domestic customers shall be exempted from VAT in accordance with Article 4, Paragraph 21 of Circular No. 219/2013/TT-BTC.

If the enterprise develops software products to be exported to foreign customers or customers in non-tariffed areas and meets the conditions stipulated in Article 9, paragraph 2 and Article 16 of Circular No. 219/2013/TT-BTC, the VAT rate of 0% shall be applied.

If an enterprise has an investment project for the purpose of software development, it may be eligible for preferential tax treatment according to the conditions, provided that certain conditions are met in accordance with the CIT Law. Whether a project qualifies as a software development project is determined based on a guide issued by the Ministry of Information and Communication.

Reference:
Official Letter No. 1741/TCT-CS dated 25 April 2024 of the Directorate General of Taxation
Circular No. 219/2013/TT-BTC