The Ministry of Finance has just issued Official Letter 15888/BTC-CST providing guidance on contractor tax policy for trademark licensing activities. Accordingly:
Allowing a Vietnamese party to use a trademark while collecting a licensing fee from a foreign party constitutes trademark licensing, but it is not a transfer of intellectual property rights.
Foreign businesses generating income from trademark licensing activities are subject to the following tax policies: – Corporate Income Tax (CIT): The CIT rate on taxable revenue is 10% (see Clause 3, Article 7 and Point a, Clause 2, Article 13 of Circular 103/2014/TT-BTC of the Ministry of Finance). – Value Added Tax (VAT): The tax rate is 10% (using the deduction method) or the VAT rate on taxable revenue is 5% (using the direct method). See also Official Letter 15888/BTC-CST dated November 7, 2016. Register as a member to receive priority access to the latest guides on accounting, taxation, business management, and work skills.
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