VAT on Income of Foreign Contractors from Transfer of Trademark-use Rights
Global Tax Update:November 2015/Vietnam
Hanoi Department of Taxation (“HDT”) and Ho Chi Minh Department of Taxation (“HCMDT”) have issued a number of Official Letters (“OL”) guiding VAT liability on income of foreign contractors from the transfer of trademark-use rights (OL No. 3159/CT-TTHT dated 15 April 2015 and OL No. 53638/CT-HTr dated 14 August 2015). (Global Tax Update: November 2015/Vietnam)
According to the guidance in these OLs, the transfer of brand name/ trademark-use rights (not a permanent transfer, not a transfer of intellectual property rights in accordance with the Law on Intellectual Property) should be subject to Vietnamese Foreign Contractor Witholding Tax (“FCWT”) at the VAT rate of 5%.
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