Proposal for 2-year tax exemption, 50% reduction for the next 4 years and the privilege of trial release without a license for Vietnamese cultural and educational games

Proposed tax exemption for 2 years and 50% reduction for the next 4 years; Privileges of trial release without permission... to promote game series with Vietnamese cultural identity and high educational value.

This is a proposal stated in the draft Decree amending and supplementing a number of articles of Decree 147/2024 on management and provision of Internet services and online information, which is being evaluated by the Ministry of Justice.

The drafting agency assessed that online games have long been both an entertainment tool and a means of quickly and sustainably conveying cultural identity to young people.

Therefore, the proposal of these special mechanisms will encourage Vietnamese businesses to invest in producing online games imbued with Vietnamese history and education, aiming to export culture to the international market.

Conditions for enjoying incentives

The draft states two groups of online games that are eligible for incentives, including:

Video games expressing Vietnamese cultural and historical identity: Must be produced by an enterprise established under Vietnamese law, holding legal intellectual property rights to the software.

The game script is required to integrate at least 3 elements expressing national identity, including: costumes, character design; context, landmarks, architecture; customs, practices, festivals; traditional arts; national cuisine or symbol.

At the same time, the project must employ at least 30% of direct personnel (programming, graphics, design, testing) who are Vietnamese workers with labor contracts.

The second is a video game with educational content: In addition to the conditions of corporate status, intellectual property rights and the ratio of 30% domestic personnel, the game script must exploit cultural and historical materials throughout.

Historical and educational elements must be deeply integrated into the plot, mission system or core gameplay mechanics, and are not allowed to be used only in the form of images, sounds, or illustrated costumes for external decoration.

The appraisal will be conducted by a specialized Council, gathering experts, scientists, and representatives of management agencies in the field of Vietnamese culture and history.

Tax exemption and reduction for 6 years

The draft proposes to exempt corporate income tax for 2 years and reduce 50% in the next 4 years for income arising directly from production and development activities of the above game lines.

To attract talent, the draft also proposes personal income tax exemption for 2 years and a 50% reduction for the next 4 years on salaries and wages of experts and scientists directly participating in the enterprise's cultural and educational game development activities.

In addition, these products will be supported by the State to be uploaded to global application stores, with priority given to participation in trade promotion programs and national brand promotion both domestically and internationally.

Trial release privileges do not require a license

Minimizing administrative barriers for developers is the mechanism that allows for license-free experimental releases.

Enterprises that meet the conditions only need to send a written notice 10 days in advance to the competent state management agency.

Maximum trial period is 30 days and can be extended once for cultural and historical games or twice for educational games. The account size participating in the test run is limited to no more than 5,000.

The decree is expected to be issued in November.