AI consulting fees paid to a Dutch-resident expert: Tax Department gives no conclusion, nature of income must be clarified

The company's question

A Vietnamese company signed an AI and machine-learning consulting contract with an individual expert of Dutch nationality who is a Dutch tax resident. The expert works remotely from the Netherlands, spends about 15 days in Vietnam in the tax period attending seminars and events, has no employment contract and has no fixed base in Vietnam. The company asked:

• Whether the fees fall under Article 14 of the Vietnam - Netherlands treaty, and whether it may skip PIT withholding, declaration and payment in Vietnam.
• What documents are needed to apply the treaty, where to file or whether to merely retain them, the procedure, forms, deadlines, and requirements for translation, notarization and consular legalization.

Response of the Tax Department

1. Conditions for applying the treaty

The information provided is insufficient to determine the nature of the income. The Tax Department asked for clarification of the nature of the work, the parties' actual rights and obligations, and the rights to the intellectual output created. There are three possibilities:

• Article 14 - Independent personal services: the expert is autonomous in expertise, methods and organization of work, practices independently and has no employment relationship with the company.
• Article 15 - Dependent personal services: in substance the expert works under the company's direction, management and control, with a genuine employment relationship, regardless of whether the contract is called consulting or services.
• Article 12 - Royalties: if all or part of the payment is for the use of, or the right to use, copyrights, software, patents, know-how or other intellectual property. AI or machine-learning services do not automatically give rise to royalties; the rights actually transferred to or used by the company must be examined.

The Tax Department also asked for clarity on: the scope of work and how it is organized, supervised and evaluated; whether the expert controls time, methods and place of work; who owns the outputs (models, algorithms, technical documents, know-how) and which rights the company receives; and whether the fee pays for consulting, for transfer or licensing of IP rights, or both. Only with this information can the applicable treaty article and Vietnam's taxing right be determined. The answer does not conclude whether the company may skip withholding.

2. Treaty application documents

• If the expert is a Dutch resident (per Article 4 of the treaty) and falls within the group exempt from PIT in Vietnam under the treaty, the expert files an exemption application with the tax authority where they are registered, or authorizes the Vietnamese contracting/paying party to file, withhold and pay on their behalf.
• The Vietnamese party files the exemption application with its directly managing tax authority. Documents and forms follow Article 76 of Circular 89/2026/TT-BTC dated 30 June 2026 of the Ministry of Finance.
• Consular legalization of documents issued by Dutch authorities for use in Vietnam follows Decree 111/2011/ND-CP of 5 December 2011, as amended by Decree 196/2025/ND-CP of 4 July 2025.