New measures concerning technology transfers have tax and transfer pricing implications in Vietnam.
Law No. 07/2017/QH14 (the “law on technology transfer”) will be effective 1 July 2018 and replaces a 2006 law. The 2017 law provides that technology transfer contracts that must be registered with the competent authorities of science and technology concern:
During tax audits and inspections, the tax authorities in Vietnam usually request that taxpayer enterprises provide the technology transfer contract registration dossiers to allow for evaluation of claims for deductibility of technology transfer fees. The 2006 law did not require registration of transfer contracts. With the new measures, the tax authorities will have stronger legal grounds to exclude the costs of the technology transfer from deductible expenses if the technology transfer contract is not registered.
In addition, the 2017 law stipulates that the technology transfer price in the following instances must be audited and implemented in accordance with the tax and price law:
According to the 2017 measures, the tax authorities may request the enterprises receiving the technology to provide the audited technology transfer dossiers and dossiers on how market prices were determined for the transferred technologies in order to determine the expenses deductible for corporate income tax calculation purposes.
Read a July 2017 report [PDF 205 KB] prepared by the KPMG member firm in Vietnam
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.