However, in case a branch wholly transfers assets, debts to the its parent company under a contract on sell and purchase of assets, debts or an agreement on transfer of assets, debts, this is not the form of transformation of enterprise and therefore it shall not be exempt from VAT declaration.
With regard to cumulated losses (if any) of the Branch transferred to the parent company according to the sale contract or transfer agreement as mentioned above, it also does not belong to the cases eligible to carry out loss carryforward for 5 consecutive years according to Article 7 of Circular No. 96/2015/TT-BTC.
Accordingly, for the case in which even revenue arising within a specified tax period is less than VND 50 billion but the total value of the related-party transactions arising within a specified tax period exceeds VND 30 billion, a company shall not be exempt from preparation of transfer pricing documentation.
Notably, the revenue (VND 50 billion and VND 30 billion) to be used as the basis for determination of entities exempt from transfer pricing documentation are the total revenue presented in the consolidated financial statement of the company and its branches.
With regard to branches, if they carry out independent accounting and maintain separate accounting and cost-accounting apparatuses, they shall be considered being exempt from transfer pricing declaration according to their separate revenue rather than depending on the company.
Accordingly, from November 5th, 2017, business establishments that voluntarily apply credit-invoice method prescribed in Clauses 3 and 4 Article 12 of Circular No. 219/2013/TT-BTC (have been amended at Circular No. 119/2014/TT-BTC) and business establishments that wish to change method for VAT calculation shall not submit Notification Form No. 06/GTGT.
Tax authorities shall determine tax calculation method of enterprises based on the dossier of VAT declaration as guided in Article 11 of Circular No. 156/2013/TT-BTC (has been amended, supplemented at Article 1 of Circular No. 119/2014/TT-BTC and Article 2 of Circular No. 26/2015/TT-BTC).
This Circular takes effect from November 5th, 2017.
Accordingly, in comparison with the earlier List, the new Lists are more specific and detailed. In particular, the new Lists are divided into 2 separate parts, including (i) List of group-2 products, goods for which the regulation conformity announcement and certification are compulsory and (ii) List of group-2 products, goods for which the regulation conformity announcement is compulsory.
In addition, the new Lists also prescribe in details HS codes, applicable National Regulations/Standards, amending documents, time of inspection (before or after customs clearance) corresponding to each product.
This Circular takes effect from February 1st, 2017 and replaces Circular No. 63/2011/TT-BGTVT dated December 22nd, 2011.
In the case the foreign contractor registers for declaration of tax by the combination method (pays EIT according to a percentage of revenue), when receiving the advance from the investor, the contractor shall be responsible for declaring, paying EIT according to each time of occurrence according to Clauses 1, 3 Article 7 of Circular No. 103/2014/TT-BTC and Clause 3 Article 10, Clause 4 Article 20 of Circular No. 156/2013/TT-BTC.
With regard to VAT, when the contractor begins the business and production activities, the VAT declaration is carried out quarterly. After full 12 months of business and production, from the following calendar year, based on revenue from selling goods, services in the preceding calendar year to determine whether VAT is declared monthly or quarterly, according to Article 5 of Circular No. 151/2014/TT-BTC.
In case an enterprise assigns its representative offices to do business in bonded warehouse, the enterprise must make procedures for setting up branches and register for tax payment, submit the tax declaration dossier for this business operation as prescribed.
- With regard to affiliated units, the 13-digit tax identification numbers (TINs) shall be issued to branches, representative offices of enterprises; especially, business locations shall be issued 5-digit ordinal numbers (not 13-digit TINs). In addition, according to the new provisions, branches, representative offices that do not bear tax obligations must still register for issuance of the 13-digit TINs instead of the exemption under the earlier provisions
- To annul the regulation that, before business suspension, organizations and individuals must pay off tax arrears payable to State budget
- To increase the time limit for sending notifications of business suspension/resuming business ahead of schedule by taxpayers to tax authorities from 5 days to 15 days, before the business suspension or resuming business ahead of schedule
- To amend the time point for TIN deactivation followed by affiliated entities of enterprises. In particular, all affiliated entities’ TINs must be deactivated before an enterprise’s TIN is deactivated. Under the earlier provisions, affiliated entities’ TINs may be deactivated after the enterprise deactivates its TIN
- The cases of giving, inheritance of an enterprise, the enterprise's TIN shall be also remained valid similarly to the case of sale of the enterprise
- To reform the procedures for tax registration followed by affiliated entities. Accordingly, only the affiliated entities shall submit the applications for tax registration at the tax authorities managing them. Under the earlier provisions, an enterprise must submit the applications for tax registration for its affiliated entities to the tax authority directly managing the enterprise.
- To abolish the provision that enterprises must apply for tax registration at provinces where irregular operation is taken place.
- To add the regulation on issuance of authorized TINs in the case an enterprise pays tax on behalf of individuals who enter into business cooperation with the enterprise.
However, according to the new regulations in this Circular, apart from entities incurred tax obligations, the dependant as prescribed in the Law on personal income tax (PIT) is also the subject to be issued with a TIN. The issuance of a TIN to the dependant is for the purpose of tax exemption for the PIT taxpayer. The dependent’s TIN is also his/her TIN upon any of liability to government budget taken on by such person (Article 5)
With regard to 13-digit TINs, now they are only issued to branches and/or representative offices of an enterprise, instead of also being issued to business locations, non-business units affiliated to an enterprise taking on tax liabilities under the earlier provisions (Clause 1 Article 5)
With regard to cases eligible for maintaining a TIN, in addition to the cases of business transformation and enterprise sale, the cases of enterprise giving or inheritance are also eligible for maintaining a TIN (Article 5)
According to this Circular, the duration for notifying the business suspension or resumption of business ahead of schedule specified in the notification is increased from 5 working days to 15 working days (Article 21)
This Circular comes into force from August 12th, 2016 and replaces Circular No. 80/2012/TT-BTC dated May 22nd, 2012.
Article 9 on amendments to tax registration and Clause 3 Article 20 on tax registration made by Vietnamese party in charge of tax return and payment on behalf of foreign contractors, foreign sub-contractors prescribed in Circular No. 156/2013/TT-BTC shall be annulled; the regulation in terms of “when an individual paying fixed tax suspends business, it shall notify the tax authority of business suspension within one day” prescribed in Point 11.a Article 6 Circular No. 92/2015/TT-BTC and Form No. 02/DK-NPT-TNCN, Form No. 02/TB-MST-NPT issued together with Circular No. 92/2015/TT-BTC shall be annulled.