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
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