Legal News

[Taxation] Points to note regarding reports on software development activities

2024/10/22

Based on the Ministry of Information and Communications’ statistical reporting system, software developers are required to submit annual reports in accordance with current regulations.

Current law does not specify penalties for companies that fail to submit reports or fail to submit them by the deadline. However, in recent tax audits, tax authorities have tended to check the status of these reports as a basis for determining whether a company is engaged in software development activities. If software development activities do not comply with the regulations, tax authorities may take this into consideration and point out the applicability of corporate tax incentives.

Article 15, Paragraph 2(c) of Decree 71/2007/ND-CP dated May 3, 2007, stipulates the responsibilities of organizations and individuals engaged in the information technology industry as follows:
“By March 15 annually at the latest, information technology industry enterprises shall send reports on the previous year’s situation of specialized information technology industry activities to provincial municipal Post and Telematics Services of their respective localities. The Ministry of Post and Telecommunications shall specify the contents of those reports.”

Additionally, Article 5, Paragraph 2 of Circular 13/2020/TT-BTTTT dated July 3, 2020, issued by the Ministry of Information and Communications, stipulates the responsibilities of organizations and enterprises engaged in software development as follows:
“Submitting information regarding software products and stages within software product manufacturing operations that are procedurally compliant and deducted tax to the Ministry of Information and Communications (via the Agency of Information and Technology) for consolidation.”

Therefore, companies engaged in software development must submit an annual report on the status of their software development activities to the Ministry of Information and Communications by March 15 of the following year at the latest.

Even if the deadline has already passed and the report has not been submitted, it is recommended that it be submitted as soon as possible.

There are three submission methods available, and any one of them may be selected.

1. Send the soft copy of the report via email (vanthucntt@mic.gov.vn).
The subject line of the email should be “Báo cáo tình hình hoạt động sản xuất phần mềm.”

2. Mail a hard copy of the report to the Information and Communications Technology Industry Department of the Ministry of Information and Communications.
・Address: 19th Floor, Building 115 Tran Duy Hung, Cau Giay, Hanoi
・Phone number: 0931.108.108
・Email: vanthucntt@mic.gov.vn

3. Submit online.
Companies can submit online by registering an account.
Website: https://makeinvietnam.mic.gov.vn/

For the format of the software development activity report, please refer to the form issued in Official Letter No. 65/CNICT-QLCL dated February 15, 2023.
(Link: https://makeinvietnam.mic.gov.vn/Bieu-Mau)

References:
• Government Decree No. 71/2007/ND-CP dated May 3, 2007
• Circular No. 13/2020/TT-BTTTT issued by the Ministry of Information and Communications on July 3, 2020