Vietnam Proposes Tax Incentives and Deregulation for Domestic Online Games

Vietnam's Ministry of Justice has unveiled a draft decree to amend and supplement certain articles of Decree 147/2024 on the management and provision of Internet services and online information. The proposal aims to promote the development of Vietnamese online games with distinct cultural and educational values. Key incentives proposed include: Tax Exemptions and Reductions: Businesses producing and developing domestic online games will receive a two-year corporate income tax exemption on income directly generated from these activities, followed by a 50% reduction for the subsequent four years. Furthermore, personal income tax for salaries and wages of experts and scientists directly involved in the development of these cultural and educational games will be waived for two years and halved for the following four years. Deregulation for Trial Releases: To minimize administrative barriers, eligible enterprises will be allowed to conduct trial releases without prior licensing, requiring only a 10-day advance notification to the competent state management agency. The trial period will be limited to a maximum of 30 days, with one extension for cultural/historical games and two for educational games. The number of participating accounts for trial runs will be capped at 5,000. Eligibility Criteria for Incentives: 1. Games featuring Vietnamese cultural and historical identity: Must be produced by an enterprise established under Vietnamese law, holding legal intellectual property rights for the software. The game script must integrate at least three elements reflecting national identity, such as costumes, character design, settings, locations, architecture, customs, festivals, traditional arts, cuisine, or national symbols. Additionally, at least 30% of direct personnel (programming, graphics, design, testing) must be Vietnamese employees under labor contracts. 2. Games with educational content: In addition to the enterprise qualifications, intellectual property rights, and domestic personnel ratio, the game script must consistently utilize cultural and historical materials. Historical and educational elements must be deeply integrated into the storyline, quest system, or core gameplay mechanics, not merely used as decorative visual or audio elements. These eligible games will also receive state support for inclusion in global app stores and priority participation in trade promotion programs and national brand promotion initiatives, both domestically and internationally. The decree is expected to be issued in November. Source: VnExpress