by Apra Law

Currently, the trend of globalization is taking place very strongly and is considered as a very effective method to improve the technical and technological level in countries. In the process of exchange and investment cooperation, Vietnam has many opportunities to approach and learn rich, diverse and modern technologies, knowledge and skills along with the level of technology – science. advanced countries. However, at present, the technology transfer activities of enterprises still have some shortcomings.

Technology transfer activities are rampant in the market, leading to the fact that many countries are at risk of becoming technology waste dumps. In the international market, product competitiveness is still limited because most of the technology used in FDI projects. One of the main reasons is that there are still obstacles in the provisions of the law, the technology is limited to transfer, the regulations on binding conditions have not created a barrier, leading to the situation that many localities follow. achievements, overcoming barriers to attract FDI at all costs and there are no regulations on effective management mechanism on transfer pricing of enterprises. According to the provisions of the Law on Technology Transfer in 2017, technology transfer activities take place in a variety of ways, such as technology transfer contracts, technology transfer parts in investment projects, technology transfer contracts, etc. Industry, machinery and equipment purchase, and sale contracts accompanied by technology transfer, etc., and are governed by many different laws: Law on Technology Transfer, Law on Investment, Law on Intellectual Property, Law on Commerce, etc. Currently, the Law on Technology Transfer mainly focuses on regulations that encourage technology transfer but restrict technology transfer, prohibit transfer, technology transfer contracts and technology transfer services. In addition, the Law on Technology Transfer 2017 also does not stipulate the role of state management agencies in the assessment and verification of technology for technologies transferred from abroad to the country. in the country to abroad or internally in the country to prevent the flow of technologies that prohibit investment and restrict investment in Vietnam. This is a major limitation that seriously affects technology transfer activities; therefore, it is necessary to have stricter legal regulations.

Next, the issue of price transfer in technology transfer is one of the shortcomings in technology transfer, especially after the law on technology transfer was introduced, the price control in technology transfer contracts. Technology has also been abolished. Foreign direct investment projects usually take place in the form of technology transfer through investment capital contribution between the parent company in a foreign country and its subsidiary in the country. In the process of contributing capital with technology in investment projects, the parent company often declares a higher value of technology transfer than the actual price, the subsidiary transfers that value to the parent company in the form of depreciation. , thus creating the phenomenon of real profits and fake losses in order to lead businesses to evade income tax payable to the State.

Article 12 of the Law on Technology Transfer 2017 stipulates the prohibited acts in technology transfer activities, which are:

Firstly, individuals and organizations take advantage of technology transfer to adversely affect national defense, security, national interests, human health, environment, morality, fine customs and traditions of the nation, infringing upon the legitimate rights and interests of organizations and individuals or destroying natural resources and biodiversity.

Second, technology transfer prohibited from transfer (as defined in Article 11 of the Law on Technology Transfer 2017); Unauthorized transfer of transfer-restricted technology.

Third, the parties violate regulations on technology transfer.

Fourthly, individuals and organizations deceive and fake in making and performing technology transfer contracts, technology transfer contracts, technology contents in contracts and investment project dossiers.

Fifth, the parties obstruct or refuse to provide information on technology transfer activities at the request of competent state agencies.

Sixth, disclosing technology secrets contrary to law, obstructing technology transfer activities.

Seventh, using technology that is not in line with technology approved and licensed by competent state agencies.

In recent years, some enterprises have taken advantage of legal loopholes to make it difficult for the Department of Science and Technology as well as tax authorities to inspect technology transfer activities. That leads to illegal technology transfer, leading to countries at risk of becoming industrial waste dumps and many tax evasion businesses that are difficult to control by tax authorities. However, the value of technology transfer contracts of enterprises is difficult to quantify with specific figures and is often larger than the actual value of the transferred technology. In addition, the object of technology transfer of some enterprises is not clear, the value of equipment attached to the technology transfer contract is not separate, making it difficult to determine. loss but annual revenue still increased and continued to expand investment.

In addition, the transfer of technology from Vietnam to abroad also has the following limitations:

– Create traditional products, produce according to traditional know-how or use, create strains, varieties in agriculture, minerals, rare and precious materials typical of Vietnam;

– Creating products for export to the market to compete with Vietnam’s national key export products.

Technology transfer is an important economic development strategy. Therefore, in order to build effective technology transfer activities, we need to build a stable macro environment, a complete legal system and a good and solid economic infrastructure. At the same time, the State sets out more detailed policies in overcoming limitations on technology transfer, preventing transfer pricing through this activity, and improving management effectiveness over technology transfer activities. Thereby creating favorable conditions for enterprises in technology application and innovation, contributing to the development of the science and technology market.

This is the article advising on “Some inadequacy in technology transfer of enterprises” by Apra Law Firm. If you have any questions or concerns, please contact the hotline for further advice and support.


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