Official letter No. 4035/CTHN-TTHT dated February 7th, 2023 of the Department of Taxation of Ha Noi city regarding tax obligations of foreign contractors

According to opinions of the Department of Taxation of Ha Noi city, in case a foreign contractor earns incomes from sale of accounts to use available technology – based utilities, these are incomes from copyright according to clause 3 Article 7 of Circular No. 103/2014/TT-BTC, it is required to pay 10% enterprise income tax (EIT) on revenue.

Regarding value added tax (VAT), if this is not software service according to Decree No. 71/2007/ND-CP and not technology transfer, transfer of intellectual property rights, it is required to pay VAT at the rate 5% of revenue.

The Vietnamese party that buys the utilities has to withhold, pay withholding tax (VAT and EIT) if the foreign organization has yet to make taxpayer registration, tax declaration and tax payment in Vietnam according to Circular No. 80/2021/TT-BTC .