Domain Name Assignment “.VN” under Circular 16/2016/TT-BTTT and Key Takeaways
The Ministry of Information and Communication issued Circular 16/2016/TT-BTTT on transfer of right to use internet domain name “.VN” (not applicable for any domain name that is registered on the basis of auction) through a simple procedure that takes only 5 working days.
Along with the above Circular, the General Department of Taxation under the Ministry of Finance released Official Notification Nos. 350 / TCT-CS of January 29, 2015 and 784 / TCT-TNCN of March 9, 2017 providing guidance on tax on transfer of use right of domain name, which contributes to set up a full legal framework for the implementation of domain name assignment.
Thank to our own experience in consulting and assisting clients in successfully transferring domain name “.VN”, Bross & Partners would like to bring you 7 key takeaways:
(1) Internet domain name “.VN” is a national resource, so it is only possible to transfer the right to use it, not acquisition of ownership of it (like assignment of the right to use land). Therefore, any Registrar which is administering domain name ".VN" is allowed to perform the procedures for transfer of the right to use of domain name from the transferor to the transferee.
(2) You are highly recommended to check whether or not the proposed domain name is the subject assignable by Article 1 of Circular 16/2016/TT-BTTTT? In other word, only proposed domain names that are out of the list of domain names registered through auction2
(3) It is advisable to go over the status of the proposed domain name so as to avoid being annulled the transaction due to violation of point c, clause 1, Article 6 of Circular No. 16/2016 / TT-BTTTT. For example, the proposed domain names at risk consist of those at dispute, or those under domain name dispute resolution, or those under consideration for being sanctioned, or those required to be returned.
(4) As the maintenance of a registered domain name is independent from the transfer procedure thereof, please remember that where the proposed domain name nearly expires, the buyer should demand the registrant to renew it before performing the procedure of transfer.
(5) The transfer of right to use the proposed domain name must be made before the accredited Registrar which is managing such proposed domain name. As soon as the accredited Registrar receives the request for assignment of right to use the proposed domain name “.VN”, neither change in the accredited Registrar, nor change in registrant (holder), nor a request for return against the proposed domain name is permitted.
(6) The concerned parties should negotiate and agree clearly on taxes and fees related to the transferred domain name. A transferor who is a legal person, must issue VAT (value added invoice), declare and pay value-added tax at the rate of 10% on such transaction. An individual who is involved in the transaction would be subject to the payment of value added tax (at the rate of 1%), personal income tax (at the rate of 0.5%) if total revenue from their business in the calendar year is over 100 million VND. In case his total business turnover of VND 100 million or less in the calendar year, he/she is not liable to pay VAT or PIT (Personal Income Tax). In this circumstance, he/she needs to make a commitment that he/she is not liable to pay VAT and PIT appending a dossier of transfer of right to use the transferred domain name.
(7) Where the procedures for transfer (in fact, re-registration) of the transferred domain name has been fulfilled but the Vietnam Internet Network Information Center (VNNIC), or the accredited Registrar receives a written notice from the tax authority informing that the parties did not complete tax obligation, or had a tax fraud, then the result of the transfer would be revoked. The VNNIC in coordination with the accredited Registrar, upon receipt of the dossier for assignment of the transferred domain name, would send a notice of cancellation of the transfer transaction to the related parties.
2 Domain names granted through auction are specified in Decision 38/2014 / QD-TTg dated July 1, 2014.
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