From July 1, 2025, what are the cases where the technology transfer is exempt from VAT in Vietnam?

What is Technology Transfer?

Based on the provisions in Clause 7, Article 2 of the Law on Technology Transfer 2017, technology transfer is defined as the transfer of technology ownership rights or the transfer of the right to use technology from a party authorized to transfer technology to the technology recipient.

From July 1, 2025, what are the cases where the technology transfer is exempt from VAT in Vietnam?

According to Clause 21, Article 5 of the Value Added Tax Law 2024 (effective from July 1, 2025), technology transfer as prescribed by the Technology Transfer Law, the transfer of intellectual property rights under the Intellectual Property Law, software products, and software services as stipulated by law are subjects not subject to VAT.

Pursuant to the Law on Technology Transfer 2017, from July 1, 2025, technology transfer in the following three cases is exempt from VAT:

- Domestic technology transfer;

- Technology transfer from abroad into Vietnam;

- Technology transfer from Vietnam to abroad.

From July 1, 2025, what are the cases where the technology transfer is exempt from VAT in Vietnam? (Image from the Internet)

Which technologies are encouraged, restricted, or prohibited from transfer in Vietnam?

(1) Technologies encouraged for transfer (according to Article 9 of the Law on Technology Transfer 2017)

- High technologies and machinery, equipment accompanying high technology are encouraged for transfer according to the high technology law.

- Advanced technology, new technology, clean technology appropriate to Vietnam's socio-economic conditions are encouraged for transfer from abroad into Vietnam and within the country when meeting any of the following requirements:

+ Creating products of higher quality and competitiveness than those produced by existing similar technologies;

+ Creating national key products from domestic scientific research and technological development results;

+ Generating new production sectors, services, or products; or breeding and cultivating new-tested breeds;

+ Saving resources, energy, materials compared to existing similar technologies in Vietnam;

+ Producing and using new energy, renewable energy; high-efficiency energy storage;

+ Creating machinery and equipment to improve the quality of education and training; medical equipment, pharmaceuticals for healthcare, treatment, and enhancing the physical well-being of the Vietnamese people;

+ Detection, handling, and forecasting to prevent natural disasters, epidemics; rescue and salvage; environmental protection, climate change adaptation, and reduction of greenhouse gas emissions;

+ Comprehensive production with high socio-economic efficiency;

+ Producing products for both national defense-security and civilian use;

+ Developing, modernizing traditional crafts.

- Technologies; machinery, and equipment with technology specified at point d of Clause 1, Article 4 of the Law on Technology Transfer 2017 existing in Vietnam except for technologies stipulated in Clauses 1 and 2, Article 9 of the Law on Technology Transfer 2017 and Clause 2, Article 10 Law on Technology Transfer 2017, specifically:

- Technology using domestic products, semi-products, or materials is encouraged for transfer abroad.

(2) Technologies restricted from transfer (according to Article 10 of the Law on Technology Transfer 2017)

- Restrict transfer from abroad into Vietnam and within the country under the following circumstances:

+ Technologies and accompanying machinery and equipment that are no longer commonly used in developed industrial countries;

+ Use of hazardous chemicals or the generation of waste that meets national technical standards and regulations;

+ Creation of products by genetic modification methods;

+ Use or creation of radioactive substances that meet national technical standards and regulations;

+ Use resources and minerals limited in domestic exploitation;

+ Technology for breeding and cultivating new-tested breeds;

+ Production that negatively impacts customs, traditions, and social ethics.

- Restrict transfer from Vietnam abroad in the following cases:

+ Creation of traditional products, produced using traditional secrets, or utilizing, creating specific agricultural breeds, mineral substances, valuable materials of Vietnam;

+ Production of export products that compete in international markets with Vietnam's main export products.

(3) Technologies prohibited from transfer (according to Article 11 of the Law on Technology Transfer 2017)

- Prohibit the transfer from abroad into Vietnam and within Vietnam of the following technologies:

+ Those not complying with laws on occupational safety, health, human health protection, resource, environment protection, and biodiversity;

+ Create products with adverse effects on socio-economic development; negatively impact national defense, security, social order, and safety;

+ Technologies; machinery, and equipment not commonly used or transferred in developing countries and not meeting national technical standards and regulations;

+ Technologies using hazardous chemicals or producing waste that does not meet national technical standards and regulations on the environment;

+ Use or create radioactive substances not meeting national technical standards and regulations.

- Prohibit the transfer from Vietnam abroad of technologies listed as state secrets unless otherwise permitted by other laws.