Following Part 3 specializing on incomes from capital investment, Part 4 on incomes from real estate transfer, Part 5, 6, 7 on incomes from wages and remunerations, Part 8 on incomes from capital transfer, this part of the series on Personal Income Tax for Foreigners will focus on incomes from copyright.
i. Types of incomes from copyright
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, trademarks, 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.
Incomes from transfer of aforesaid subjects of intellectual property rights and technology transfers include re-transfer.
ii. Tax rate
The rate of personal income tax on the income from royalties is 5% according to the whole income tax table.
iii. Tax calculation time
The taxable income shall be calculated when the royalty is paid.
iv. Relevant laws and regulations
The following pieces of legislation, regulations, and documents are the grounds mainly governing the tax imposed on incomes from capital investment.
– The 2007 Law on Personal Income Tax.
– Circular No. 111/2013/TT-BTC on the implementation of the law on personal income tax, the law on the amendments to the law on personal income tax, and the Government’s Decree No. 65/2013/ND-CP elaborating a number of articles of the law on personal income tax and the law on the amendments to the law on personal income tax.
– Circular No. 92/2015/TT-BTC on guidelines for VAT and personal income tax incurred by residents doing business, amendments to some articles on personal income tax of the Law No. 71/2014/QH13 on the amendments to tax laws, and the Government’s Decree No. 12/2015/ND-CP dated February 12, 2015.
– Circular No. 156/2013/TT-BTC guidance on some articles of the law on tax administration, the law on the amendments to the law on tax administration, and the Government’s Decree No. 83/2013/ND-CP.
The taxable 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 taxable income is excess over 10 million VND of incomes from all transfer contracts.
If the subject of transfer in under a co-ownership, the taxable 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.