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blue-check Regarding PIT declaration made by representative offices

Official letter No. 5911/CTHN-TTHT dated February 26th, 2021 of the Department of Taxation of Ha Noi city regarding declaration of personal income tax (PIT)
VietlawOnline

According to Clause 1 Article 8 of Decree No. 126/2020/ND-CP (takes effect from December 5th, 2020), enterprises, branches, representative offices, etc. are only eligible to declare PIT quarterly if they are eligible to declare value added tax (VAT) quarterly, otherwise they have to declare PIT monthly. Read more

Accordingly, in case an income payer does not have to declare VAT, it has to declare PIT monthly without any ground to consider applying the form of quarterly declaration.

In this case, because representative offices of foreign companies in Vietnam are not the subjects of VAT declaration in Vietnam, they have to declare PIT monthly after December 5th, 2020 (the date on which Decree No. 126/2020/ND-CP takes effect).

Whether representative offices of domestic companies have to declare PIT monthly or not, now there is no document regulating this issue.

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blue-check Issues relating to taxes on donations received from parent company outside Vietnam

Official letter No. 1070/CTHN-TTHT dated January 8th, 2021 of the Department of Taxation of Ha Noi city regarding tax policy for donations received from overseas parent company
VietlawOnline

According to opinions of the Department of Taxation of Ha Noi city, in case the donations received from a parent company outside Vietnam are unconditional aid rather than the support for performance of such services as repairing, warranty, sale promotion, advertising, etc. the Company in Vietnam may make out collection documents, is exempt from issuing invoices, declaring and paying value added tax (VAT). The company shall only account the donations in other incomes in order to declare and pay enterprise income tax (EIT) (Clause 1 Article 5 of Circular No. 219/2013/TT-BTCstatus2 , Clause 15 Article 7 of Circular No. 78/2014/TT-BTCstatus2 ). Read more

With regard to the non-interest loan, in principle it is considered to be “loan provision not in accordance with common transaction value in the market” and belongs to the case subject to the tax liability imposition according to Article 50 of the Law on Tax administration No. 38/2019/QH14 .

However, if it is determined that the transaction between the parent company and the Company in Vietnam is not the loan provision transaction and the parent company does not earn income from the activity of supporting the Company, does not belong to applicable entities as regulated at Article 1 of Circular No. 103/2014/TT-BTC, it shall be considered to be exempt from tax liability imposition.

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blue-check Regarding taxes incurred by a foreigner who has houses leased in Vietnam

Official letter No. 5265/TCT-DNNCN dated December 11th, 2020 of the General Department of Taxation regarding tax policy applicable to the activity of house lease of a non-resident
VietlawOnline

According to point e.7 Clause 2 Article 26 of Circular No. 111/2013/TT-BTCstatus2 , a non-resident who has fixed business location in the Vietnamese territory shall declare tax, make tax accounting in the same way a resident does. Read more

According to the General Department of Taxation’s opinions, “houses leased in Vietnam” are considered to be fixed business locations. As the result, when a non-resident leases his/her houses in Vietnam, he/she shall have to declare, pay value added tax (VAT), personal income tax (PIT) and license fees in the same way a resident does.

In which, VAT and PIT shall be subject to declaration and payment if the revenue from leasing houses is at least VND 100 million, applicable similarly to that incurred by a business individual according to Article 8 of Circular No. 92/2015/TT-BTCstatus2 .

Particularly, license fees shall be paid according to tax authority’s notification without having to make license fee declaration (point b Clause 1 Article 10 of Decree No. 126/2020/ND-CP ).

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blue-check New regulations on tax registration and issuance of TIN

Circular No. 105/2020/TT-BTC dated December 3rd, 2020 of the Ministry of Finance on guidelines for tax registration
VietlawOnline

This Circular regulates in details entities required to directly apply for taxpayer registration; structure of taxpayer identification number (TIN); application, procedures and forms for tax registration according to the regulations of the Law on Tax Administration No. 38/2019/QH14 and Decree No. 126/2020/ND-CP . Read more

According to Article 4 of this Circular, enterprises operating in the sectors of insurance, accounting, auditing, lawyers, notarization, or other specialized sectors that are not required for enterprise registration at business registration authorities must directly make tax registration with tax authorities.

Overseas suppliers without permanent establishments in Vietnam that operate electronic commerce; representative offices of foreign organizations in Vietnam; ODA project owners; foreign organizations, individuals doing independent business in Vietnam, etc. must be also subject to direct tax registration and apply for TIN.

In addition, this Circular regulates that “identification number of an affiliated entity” is also its TIN.

This Circular takes effect from January 17th, 2021. To replace Circular No. 95/2016/TT-BTCstatus1 dated June 28th, 2016; Article 9 of Circular No. 156/2013/TT-BTCstatus2 dated November 6th, 2013.

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blue-check Annulment of 29 legislative documents on tax, public asset

Circular No. 103/2020/TT-BTC dated November 26th, 2020 of the Ministry of Finance on annulment of certain legislative documents promulgated by the Minister of Finance and jointly promulgated by Ministries in tax, public asset management and public debt management sectors

Annulment of the following legislative documents in their entirety: Read more

1. Circular No. 60A-TC/TCT dated September 1, 1997

2. Circular No. 109/1998/TT-BTCstatus1 dated July 31, 1998

3. Circular No. 191/1998/TT-BTC dated December 31, 1998

4. Circular No. 100/1999/TT-BTC dated August 19, 1999

5. Circular No. 24/2000/TT-BTC dated March 30, 2000

6. Circular No. 86/2001/TT-BTC dated October 29, 2001

7. Circular No. 03/2002/TT-BTCstatus1 dated January 14, 2002

8. Circular No. 69/2002/TT-BTCstatus1 dated August 16, 2002

9. Circular No. 53/2003/TT-BTCstatus1 dated June 2, 2003

10. Circular No. 26/2004/TT-BTCstatus1 dated March 31, 2004

11. Circular No. 100/2004/TT-BTCstatus1 dated October 20, 2004

12. Circular No. 82/2005/TT-BTCstatus1 dated September 21, 2005

13. Circular No. 41/2006/TT-BTCstatus1 dated May 12, 2006

14. Circular No. 72/2006/TT-BTCstatus1 dated August 10, 2006

15. Circular No. 82/2006/TT-BTC dated September 13, 2006

16. Circular No. 77/2008/TT-BTCstatus1 dated September 15, 2008

17. Circular No. 38/2010/TT-BTCstatus1 dated March 19, 2010

18. Circular No. 96/2011/TT-BTCstatus1 dated July 4, 2011

19. Circular No. 199/2012/TT-BTCstatus1 dated November 15, 2012

20. Decision No. 187/2003/QD-BTC dated November 14, 2003

21. Decision No. 44/2007/QD-BTCstatus1 dated June 4, 2007.

22. Circular No. 35/2001/TT-BTCstatus1 dated September May 25, 2001

23. Circular No. 41/2003/TT-BTC dated May 6, 2003

24. Circular No. 83/2004/TT-BTC dated August 17, 2004

25. Circular No. 29/2006/TT-BTCstatus1 dated April 4, 2006

26. Circular No. 192/2009/TT-BTCstatus1 dated October 1, 2009

27. Joint Circular No. 14/2008/TTLT-BTC-BTNMT dated January 31, 2008

28. Circular No. 110/2009/TT-BTCstatus1 dated May 29, 2009

29. Circular No. 193/2011/TT-BTCstatus1 dated December 23, 2011.

This Circular takes effect from January 10, 2021.

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blue-check Regulations on tax policy and tax declaration, payment

Decree No. 126/2020/ND-CP dated October 19th, 2020 of the Government on
VietlawOnline

This Decree provides for new regulations on tax registration, tax declaration and payment, policies on tax reduction, exemption, and cancellation, debt freezing, and tax-related enforcement as well as templates of forms, dossiers for declaration of each type of tax. Read more

According to this Decree, enterprises suffering from physical damages caused by wars, riots, strikes and incidents shall also considered suffering from damages caused by other force majeure events. Accordingly, the enterprises shall be considered for extension of time limit for tax payment, exemption from late payment interests, fines (Article 3).

The following cases shall be entitled to exemption from submission of tax declaration dossier: The taxpayer only has business operations that are not subject to any tax; the taxpayer is an individual earning tax-free income; an export processing enterprise that only exports (it is not required to declare value added tax); the taxpayer’s business suspension is suspended; the taxpayer applies for TIN invalidation (Article 7).

This Decree takes effect from December 5th, 2020. However, the policies on tax reduction, exemption, cancellation at this Decree shall be applied from July 1st, 2020.

To replace Decree No. 83/2013/ND-CPstatus1 dated July 22nd, 2013; Article 4 of Decree No. 91/2014/ND-CPstatus2 dated October 1st, 2014; Clause 1 thru Clause 11 Article 5 of Decree No. 12/2015/ND-CPstatus2 dated February 12th, 2015; Article 3, Article 4 of Decree No. 100/2016/ND-CPstatus2 dated July 1st, 2016; Clauses 1, 2, 3 and 4 Article 5 of Decree No. 139/2016/ND-CPstatus2 dated October 4th, 2016; Clause 3 and Clause 4 Article 1 of Decree No. 22/2020/ND-CPstatus2 dated February 24th, 2020; Clause 3 Article 13a of Decree No. 45/2014/ND-CP dated May 15th, 2014; Clause 3 Article 21 of Decree No. 46/2014/ND-CPstatus2 dated April 15th, 2014; Article 27, Article 30 of Decree No. 65/2013/ND-CPstatus2 dated June 27th, 2013; Points a and b Clause 3 Article 9 of Decree No. 67/2019/ND-CPstatus2 dated July 31st, 2019; Clause 1 Article 13, Clause 1 Article 14, Annex IV promulgated together with Decree No. 82/2017/ND-CPstatus2 dated July 17th, 2017; Clause 4 Article 14 of Decree No. 45/2014/ND-CP dated May 15th, 2014; Clause 3 and Clause 4 Article 24 of Decree No. 46/2014/ND-CPstatus2 dated May 15th, 2014; Article 7 of Decree No. 53/2011/ND-CPstatus2 dated July 1st, 2011; Points a, b, c, d, and dd Clause 4 Article 1 of Decree No. 20/2019/ND-CPstatus2 dated February 21st, 2019; Article 17 thru Article 53 Decree No. 129/2013/ND-CPstatus2 dated October 16th, 2013; Article 25 thru Article 69 of Decree No. 127/2013/ND-CPstatus1 dated October 15th, 2013; Clause 20, Clause 21 Article 1 of Decree No. 45/2016/ND-CPstatus1 dated May 26th, 2016.

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blue-check Regarding VAT which has not yet completely deducted of a branch when it suspends business operation under a fixed period

Official letter No. 91914/CT-TTHT dated December 9th, 2019 of the Department of Taxation of Ha Noi city regarding declaration of value added tax (VAT) for a branch which is suspended under a fixed period
VietlawOnline

According to opinions of the Department of Taxation of Ha Noi city, when a branch (a dependent cost-accounting entity) suspends its business operation under a fixed period, its parent company is not allowed to transfer to deduct the branch’s input VAT which has not completely deducted. Read more

The branch shall continue deducting such input VAT amount when it resumes its business operation.

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blue-check Regarding declaration of tax with regard to extra-provincial construction

Official letter No. 4201/TCT-KK dated October 16th, 2019 of the General Department of Taxation regarding declaration of tax on extra-provincial construction
VietlawOnline

According to the General Department of Taxation’s opinions, in case a main contractor assigns part of his work to a sub-contractor but the whole value of the works is paid by the investor via the main contractor, the main contractor has to declare and pay extra-provincial tax on the whole value of the works. Read more

Particularly, the sub-contractor shall only declare and pay VAT on the VAT – exclusive value of the assigned work signed with the main contractor.

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blue-check Guidelines on tax administration with regard to business locations in other provinces

Dispatch No. 3200/TCT-KK dated August 12th, 2019 of the General Department of Taxation on tax administration of business locations of enterprises situated in different provinces from those of their management bodies
VietlawOnline

The document is to provide guidelines on issuance of tax identification numbers (TINs), use of invoices and tax declaration with regard to business locations of enterprises situated in different provinces from those of their management bodies Read more

Accordingly, based on information registered of business locations that are based in other provinces than those of their management bodies, the Departments of Taxation shall assign the tax authorities directly managing such business locations in order to carry out procedures for issuance of TINs and receive tax declaration dossiers.

Regarding TIN, after the supervisory tax authorities of the business locations issue 13-digit TIN to the business locations, they shall send the notification of the TIN (form No. 11-MST) to the management bodies of the business locations and the business locations to enable them to declare and pay their taxes

Regarding invoices, the management bodies of the business locations shall use the same invoice template for every business location thereof and send the invoice issue notice of each business location to their supervisory tax authorities.

Regarding tax declaration, the assigned supervisory tax authorities of business locations shall instruct their management bodies to use the 13-digit TINs to declare and pay the taxes for each business location in provinces other than where the management bodies are based to the supervisory tax authorities of the business locations as specified in Point c, Point d Clause 1 Article 11 of Circular No. 156/2013/TT-BTCstatus2 and Clause 4 Article 12 Circular No. 219/2013/TT-BTCstatus2 (which has been amended at Clause 3 Article 3 of Circular No. 119/2014/TT-BTC).

The guidelines at this Dispatch shall be applied from August 12th, 2019 until the Circular amending Circular No. 95/2016/TT-BTCstatus1 is promulgated.

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blue-check 2019 Law on Tax administration

Law No. 38/2019/QH14 dated June 13th, 2019 of the National Assembly on Tax administration
VietlawOnline

This Law provides for tax registration, tax declaration, tax payment, tax exemption, tax reduction, tax refund, and actions against tax-related administrative violations. Read more

Accordingly, in comparison with the earlier Law, this Law supplements the policy on “tax remission” with regard to individuals whose annual personal income tax payable on salary or wage is VND 50.000 or smaller (Article 79).

In addition, this new Law also supplements the policy on “tax chargeoff” applicable to these cases: The taxpayer is dead or declared dead, missing or incapacitated by the court; the taxpayer submits a dissolution decision; the taxpayer has filed for bankruptcy; the taxpayer no longer does business at the registered address; the taxpayer’s certificate of business registration has been revoked (Article 83).

The aforesaid cases entitled to the “tax chargeoff” shall not be charged late payment interest (Clause 6 Article 59).

Regarding personal tax identification numbers (TINs), personal identification numbers shall replace TINs when they are issued to the whole population (Clause 7 Article 35).

This Law comes into force from July 1st, 2020.

Regulations on electronic documents and invoices of this Law come into force from July 1st, 2022; organizations and individuals are recommended to apply regulations on electronic documents and invoices in this Law before July 1st, 2022.

The Law on Tax administration No. 78/2006/QH11status1 , which has been amended by Law No. 21/2012/QH13status1 , Law No. 71/2014/QH13status2 and Law No. 106/2016/QH13status2 , ceases to be effect from the effective date of this Law, except for the cases specified in Clause 1 Article 152 of this Law.

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