The Ministry of Finance issued an “official letter” providing that the transfer of a right to use a trademark is subject to value added tax (VAT) and reaffirming the “foreign contractor tax” rates that apply to a transfer of a right to use a trademark.
Official Letter 15888 (7 November 2016) reaffirms the foreign contractor tax rates applicable to the transfer of a right to use a trademark as being comprised of two parts—VAT at a rate of 5%, and corporate income tax at a rate of 10%.
The guidance explains that for similar transactions concluded before 7 November 2016, for which taxpayers declared and paid VAT and corporate income tax but not in accordance with Official Letter 15888, an amended tax declaration is not required. However, in situations for which taxpayers have not declared or have declared but have not yet paid VAT and/or corporate income tax, the rates as clarified by Official Letter 15888 now apply. It is uncertain whether the guidance applies retroactively to situations when taxpayers reported such transactions as not being subject to VAT.
Read a November 2016 report [PDF 183 KB] prepared by the KPMG member firm in Vietnam: Transfer of right to use trademark shall be subject to value added tax
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