Vietnam: What are the regulations on calculating PIT on incomes from copyright? What do incomes from copyright include?
What is the income from copyright in Vietnam?
Pursuant to Clause 7 Article 2 of Circular 111/2013 / TT-BTC on incomes from copyright in Vietnam as follows:
Incomes from copyright are incomes from the transfer of ownership, rights to use the subjects of intellectual property rights according to the Law on Intellectual property, incomes from technology transfers according to the Law on Technology transfers. In particular:
- The subjects of intellectual property rights are specified in Article 3 of the Law on Intellectual property and relevant guiding documents:
+ Subjects of copyright include literary, artistic, and scientific works; subjects of rights relevant to copyright include: video recordings, sound recordings of broadcasted programs, program-carrying satellite signals.
+ Subjects of industrial property rights include inventions, industrial designs, integrated circuit designs, business secrets, makes, trade marks, and geographical indications.
+ Subjects of rights to plant varieties being propagating materials and harvested materials.
- Subjects of technology transfers according to Article 7 of the Law on Technology transfers:
+ Transfer of technical know-hows.
+ Transfer of technological knowledge in the form of technological plans, technological processes, technical solutions, formulae, specifications, drawings, technical diagrams, computer programs, information.
+ Transfer of solutions for rationalizing production and technological innovation.
Note: Incomes from transfer of aforesaid subjects of intellectual property rights and technology transfers include re-transfer.
How to calculate PIT on incomes from copyright in Vietnam for resident equals?
Pursuant to Article 13 of Circular 111/2013 / TT-BTC stipulating as follows:
Personal income tax payable = Assessable income x 5% tax rate
Where:
- The assessable income from royalties is the excess over 10 million VND of income according to the transfer contract, regardless of the number of payments the taxpayer receives when transferring the subjects of intellectual property rights or technology transfer.
If the transfer of the same subject of intellectual property rights or technology transfer to a transferee is made into multiple contracts, the assessable income is over 10 million VND of income from all transfer contracts.
If the subject of transfer is under a co-ownership, the assessable income shall be divided among the co-owners. The division ration depends on the Certificate of ownership or rights to use issued by competent authorities.
- The assessable income shall be calculated when the royalty is paid.
How to calculate PIT on incomes from copyright in Vietnam for non-resident equals?
Pursuant to Clause 1, Article 22 of Circular 111/2013 / TT-BTC as follows:
Personal income tax payable = Assessable income x 5% tax rate
Where:
- The tax on incomes from royalties is the excess over 10 million VND of income from each contract to transfer the subjects of intellectual property rights, technology transfers.
If the transfer of the same subject of intellectual property rights or technology transfer to a transferee is made into multiple contracts, the assessable income is over 10 million VND of income from all transfer contracts.
If the subject of transfer is under a co-ownership, the assessable income shall be divided among the co-owners. The division ration depends on the Certificate of ownership or rights to use issued by competent authorities.
- The income from royalties shall be calculated when the non-resident receives the royalties from the payer.
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