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DIFFERENCES RELATING TO VIETNAM TAX POLICY IN CASE OF PURCHASING AND SELLING THE ONLINE “ACCESS RIGHTS”

Some notable points:

* When purchasing the “access rights” from overseas, some key points to be noted about the foreign contractor tax rates are as following:

– In case the “access right” is a software service as prescribed in Decree No. 71/2007/ND-CP, the income that the foreign contractor receives is income from royalties according to Clause 3 Article 7 of Circular No. 103/2014/TT-BTC, the corporate income tax (CIT) rate is 10% and it is not subject to VAT.

– In case the “access right” is not a software service as prescribed in Decree No. 71/2007/ND-CP, the income that the foreign contractor receives is income from service provision, the corporate income tax (CIT) rate is 5% and the applied VAT rate is 5%.

* When selling the “access rights” to local customer, here are some notable points regarding VAT:

– In case the “access right” is a software service as prescribed in Decree No. 71/2007/ND-CP, it is not subject to VAT.

– In case the “access right” is not a software service as prescribed in Decree No. 71/2007/ND-CP, the VAT rate is 10%.