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blue-check How to calculate withholding tax on income from transfer of right to use trademark

Official letter No. 51874/CTHN-TTHT dated October 27th, 2022 of the Department of Taxation of Ha Noi city regarding tax policy relating to transfer of right to use trademark
Posted: 2/11/2022 9:35:21 AM | Latest updated: 6/11/2022 4:49:19 PM (GMT+7) | LuatVietnam: 5572 | Vietlaw: 585
VietlawOnline

According to the guidelines at Official letter No. 15888/BTC-CST dated November 7th, 2016, foreign enterprises shall be subject to withholding tax when they earn incomes from transfer of right to use trademark to Vietnamese enterprises, including enterprise income tax (EIT) and value added tax (VAT).

In which, the EIT rate is 10% and VAT shall apply 10% tax rate ((if the credit method is applied) or 5% (if the direct method is applied).

With regard to Vietnamese enterprise, if it has declared, withheld and paid withholding tax on behalf of the foreign contractor in accordance with regulations and the amount paid to the foreign party meets the conditions regulated at Article 4 of Circular, such amount shall be included in deductible expenditures.

The accounting to EIT and deduction of VAT paid on behalf of the foreign enterprise shall be carried out according to clause 2.37 Article 4 of Circular No. 96/2015/TT-BTCstatus2 and Article 14, Article 15 of Circular No. 219/2013/TT-BTCstatus2 .

Ms Phuong Thao (VietlawOnline.com)
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Published Vietlaw's Newsletter No. 585

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