Main updated points of Circular 13 in comparison with Circular 16 on software product manufacturing operations
On July 03, 2020, the Ministry of Information and Communications issued Circular No. 13/2020/TT-BTTTT ("Circular 13") regulating the determination procedural compliance of software product manufacturing operations, replacing Circular 16/2014/TT-BTTTT (“Circular 16”). Circular 13 has taken effect since 19 August 2020 and will have significant impact on the operations of organizations and enterprises which manufacture software product.
The main updated points of Circular 13 in comparison with Circular 16 are summarized below.
| Content | Circular 13 | Circular 16 | Comment |
|---|---|---|---|
| Scope | This Circular prescribes the determination procedural compliance of software product manufacturing operations for enjoying corporate income tax incentives. | This Circular unifies the software manufacturing process, requirements and criteria to determine software production activities. | Add in the purpose of determining procedural compliance of software product manufacturing operations is to determine corporate income tax incentives. |
| Subjects of application | Applicable to management agencies, organizations and enterprises involved in software production. | Applicable to management agencies, organizations, enterprises, and individuals involved in software production | Circular 13 removes the application for individuals. |
| Manufacturing process of software products | Stages in manufacturing process of software products: (1) Requirement determination; (2) Analysis and design; (3) Programming and coding; (4) Software examination and experimentation; (5) Software product completion and packaging; (6) Software product installation, transfer, instruction, and maintenance; (7) Publishing and distributing software products | Supplementing and modifying multiple points in the stages in the manufacturing process of software products. | |
| Determining procedural compliance of software product manufacturing operations | No specified | Stipulate two general requirements for organizations, enterprises and individuals manufacturing software products | |
| Activity is considered as procedural compliance of software product manufacturing operations when the organization/ enterprise performs at least one of the two stages (1) and (2) | Stipulate three cases in which the activities of organizations, enterprises and individuals are identified as procedural compliance of software product manufacturing operations. | Simplify the specification of the cases of software product production which meets the standard process requirement; Focusing on two main stages in the software product production process | |
| Supplement the list of supporting documents for each stages of the production process which the organization or enterprise has performed. | |||
| Organizations and enterprises’ responsibilities | Add in the responsibility to propose the applicable tax incentives for software production activities | ||
| Send and update information on software products and production stages of software products which meets the standard process requirement and the applicable incentive tax rates to the Ministry of Information and Communications (Information Technology Department) for synthesis | Annually, prior March 15 each year, send reports on software production to the Ministry of Information and Communications (the Information Technology Department). | There is no specific deadline for enterprise to send reports to the Ministry of Information and Communications. Accordingly, enterprise will need to send and update information regularly if there are new products or updates in the production process. | |
In addition, Circular 13 also presents a transitional clause for software production activities which had been determined as identified as qualified for the standard process requirement prior to the effective date of Circular 13, will continue to be considered qualified until the expiry of the approved investment project term.