Is income from technology transfer subject to personal income tax in Vietnam?

Is income from technology transfer subject to personal income tax in Vietnam?

Based on Clauses 3 to 7, Article 3 of the Law on Personal Income Tax 2007 as amended by Clause 1, Article 1 of the Law on Amendments to the Law on Personal Income Tax 2012 and Clause 2, Article 2 of the Law on Amendments to the Law on Various Tax Laws 2014, the following specifics are provided:

Taxable Income

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3. Income from capital investment, including:

a) Interest from loans;

b) Share dividends;

c) Income from other forms of capital investment, except for income from bonds interest of the Government of Vietnam.

4. Income from capital transfers, including:

a) Income from transferring capital in economic organizations;

b) Income from transferring securities;

c) Income from other forms of capital transfer.

5. Income from real estate transfers, including:

a) Income from transferring land use rights and assets attached to land;

b) Income from transferring ownership or use rights of houses;

c) Income from transferring land lease rights, water surface lease rights;

d) Other income received from real estate transfers in all forms.

6. Income from winnings, including:

a) Lottery winnings;

b) Winnings from promotional activities;

c) Winnings from betting activities;

d) Winnings from games, contests with prizes, and other forms of winnings.

7. Income from royalties, including:

a) Income from transferring, transferring the rights to use objects of intellectual property rights;

b) Income from technology transfer.

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Thus, according to legal regulations, technology transfer is subject to personal income tax.

Is income from technology transfer subject to personal income tax in Vietnam? (Image from the Internet)

What is the tax period for income from technology transfer in Vietnam?

Based on Article 7 of the Law on Personal Income Tax 2007 as amended by Clause 3, Article 1 of the Law on Amendments to the Law on Personal Income Tax 2012, the specifics are as follows:

Tax Calculation Period

1. The tax calculation period for resident individuals is defined as follows:

a) The yearly tax period applies to income from business; income from wages and salaries;

b) The tax period per income occurrence applies to income from capital investment; income from capital transfers, except for securities transfers; income from real estate transfers; winnings; royalties; franchise income; inheritance; and gifts;

c) The tax period per transfer or yearly for securities transfer income.

2. For non-resident individuals, the tax period is calculated per occurrence for all taxable income.

Therefore, according to legal regulations, the tax period for personal income tax on income from technology transfer is the period per occurrence.

What is the basis for calculating personal income tax on income from technology transfer?

According to Article 16 of the Law on Personal Income Tax 2007, the specifics regarding the basis for calculating personal income tax on income from technology transfer are as follows:

- Taxable income from royalties is the portion of income exceeding 10 million VND that the taxpayer receives from transferring, transferring the rights to use objects of intellectual property, or technology transfer per contract.

- The point in time to determine taxable income from royalties is when the organization or individual pays income to the taxpayer.

Is taxable income from technology transfer eligible for personal exemption?

Based on Article 19 of the Law on Personal Income Tax 2007 as amended by Article 1 of Resolution 954/2020/UBTVQH14, the specifics are as follows:

Personal exemption

1. personal exemption are amounts deducted from taxable income before calculating tax on business income, wages, and salaries for resident individuals. personal exemption include the following two components:

a) The deduction for taxpayers is 11 million VND/month (132 million VND/year);

b) The deduction for each dependent is 4.4 million VND/month.

2. Determination of personal exemption for dependents follows the principle that each dependent is only deductible once for one taxpayer.

3. Dependents are individuals that the taxpayer is responsible for supporting, including:

a) Minor children; children with disabilities, unable to work;

b) Individuals with no income or income not exceeding the prescribed level, including adult children attending universities, colleges, vocational schools; spouses unable to work; parents beyond working age or unable to work; other helpless individuals whom the taxpayer directly supports.

The Government of Vietnam specifies income levels and declarations for determining dependents eligible for personal exemption.

Thus, based on the above regulations, taxable income from technology transfer is not eligible for personal exemption.