|Where issued:||Goverment||Effective date:||01/05/2017|
|Date issued:||24/02/2017||Status:||Expires: August 20, 12|
|GOVERMENT||SOCIAL REPUBLIC OF VIETNAM|
Independence - Freedom - Happiness
|Number: 20 / 2017 / ND-CP||Hanoi, date 24 month 02 year 2017|
REGULATIONS ON TAX MANAGEMENT FOR ENTERPRISES WITH LINKS TRANSACTIONS
Pursuant to the Law on Organization of the Government dated April 30, 2013, 19 year of 6;
Pursuant to the Law on Tax Administration dated 29 month 11 year 2006; Law amending and supplementing a number of articles of the Law on Tax Administration dated 20 month 11 year 2012;
Pursuant to the Enterprise Income Tax Law dated 03 month 6 year 2008; Law amending and supplementing a number of articles of the Law on Enterprise Income Tax dated 19 month 6 year 2013;
Pursuant to the Law amending and supplementing a number of articles of the Tax Laws dated April 30, 2013, 26;
Pursuant to the Investment Law dated 26 month 11 year 2014;
Pursuant to the Enterprise Law dated 26 month 11 year 2014;
Pursuant to the Accounting Law dated 20 month 11 year 2015;
At the proposal of the Minister of Finance;
The Government issued a decree on tax administration for enterprises with associated transactions.
GENERAL RULES #
Article 1. Scope
1. This Decree prescribes principles, methods, order and procedures for determining transfer pricing; obligations of taxpayers in declaring and determining the price of related-party transactions and declaring and paying tax; responsibilities of state agencies in tax management, examination and inspection for taxpayers having associated transactions.
2. Affiliate transactions within the scope of this Decree are transactions arising in the taxpayer's production and business activities that are related in accordance with the provisions of Article 5 of this Decree, except for related transactions. Business transactions for goods and services subject to the State's price adjustment scope shall comply with the law on prices.
Article 2. Subject of application
1. Goods and service production and trading organizations (hereinafter referred to as taxpayers) are corporate income tax payers according to the declaration method and have transactions with related parties. association as prescribed in Article 5 of this Decree.
2. Tax authorities include General Department of Taxation, Department of Taxation and Sub-Department of Taxation.
3. Other state agencies, organizations and individuals related to the application of regulations on price management of related-party transactions, including tax authorities of countries or territories with tax agreements currently in force valid for Vietnam.
Article 3. Principles apply
1. Taxpayers having associated transactions must declare related transactions; excluding the factors that reduce the tax liability governed by the affiliate relationship, affecting to determine the tax liability for related-party transactions which are equivalent to independent transactions with the same conditions.
2. Tax authorities shall manage, examine and inspect the associated transaction prices of taxpayers according to the principle of independent transactions and the nature of determining the form so as not to recognize associated transactions. reduce the tax liability of the enterprise to the state budget and adjust the transfer pricing to properly determine the tax liability specified in this Decree.
3. The principle of independent transactions shall be applied according to the principle of transactions between independent parties without affiliated relationships in tax agreements in force in Vietnam.
Article 4. Explain words
1. "Tax Agreement" is a shortened term of the Agreement on the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income signed between Vietnam and other countries, territories and regions. Agreements amending and supplementing existing Agreements are in force in Vietnam.
2. “Partner tax agency” means the tax authority of a country or territory that has signed a tax agreement with Vietnam.
3. “Affiliate transaction” means a transaction arising between parties having an association relationship in the course of production and business, including: Buying, selling, exchanging, renting, leasing, borrowing, lending, transfer, transfer machinery, equipment, goods, provide services; loans, loans, financial services, financial guarantees and other financial instruments; buying, selling, exchanging, renting, leasing, borrowing, lending, transferring, transferring tangible assets, intangible assets and agreeing to use common resources such as synergies, cooperation in exploitation and use of human resources. force; cost sharing among affiliated parties.
4. “Independent transaction” means a transaction between parties that are not related.
5. "Independent comparator" means independent transactions or enterprises performing independent transactions selected on the basis of comparative analysis, identifying similar comparison objects to determine price levels; profit margin; profit distribution ratio in order to determine the taxpayer's tax obligations to the state budget, ensuring compliance with the provisions of the Law on Tax Administration and the Law on Corporate Income Tax.
6. “Material difference” means a difference in information or data that has a material or significant effect on the price level; profit rate and profit distribution ratio of the parties to the transaction.
7. "Database of the Tax Authority" means information and data developed and managed by the Tax Authority in accordance with the provisions of the Law on Tax Administration related to the determination of the taxpayer's tax obligations due to the provisions of the Law on Tax Administration. Tax authorities collect, analyze, store, update and manage from various sources, including databases and exchange information with tax authorities, competent authorities in the country. outside.
8. The principle "nature determines form" is a principle to analyze the production and business activities of taxpayers to determine the nature of related-party transactions as a basis for comparison with similar independent transactions. Ensure that related party transactions represent the true commercial, economic and financial nature of transactions between parties that do not have an associated relationship, and do not allow these related relationships to influence and falsify their obligations. tax with the taxpayer's state budget. This principle is based on data and actual transactions between related parties to compare with independent transactions under similar conditions, regardless of the form of transactions expressed in contracts, documents. between related parties. The determination of the nature of economic, financial and commercial relations of related party transactions is made based on comparison with independent transactions with similar conditions.
9. “Independent transaction value range” means a set of values for the price level; profit ratio or profit distribution ratio of independent comparables selected by tax authorities and taxpayers on the basis of data specified in Article 9 of this Decree. Values belonging to this set have similar confidence levels. In case of necessity, apply statistical probability method to determine the range of standard independent transaction values and between representative, universal and common values in order to increase the reliability of the set of objects. independent comparison.
10. “Supreme parent company of the group” is a term used to refer to a legal entity that has direct or indirect equity in other legal entities of a multinational corporation and is not owned by any other entity. any other legal person. The consolidated financial statements of the Supreme Parent Company of the group are not consolidated into any other global legal entity's financial statements.
DETAILED RULES #
Article 5. The parties have links
1. Associated parties (hereinafter referred to as "associated party") are related parties in one of the following cases:
a) A party participates directly or indirectly in the administration, control, capital contribution or investment in the other party;
b) The parties are directly or indirectly under the control, control, capital contribution or investment of another party.
2. The associated parties in Clause 1 of this Article are specified as follows:
a) An enterprise directly or indirectly holds at least 25% of the capital contributed by the owner of the other enterprise;
b) Both enterprises have at least 25% of the owner's capital contributed directly or indirectly by a third party;
c) An enterprise is the largest shareholder in the capital contributed by the owner of the other enterprise, directly or indirectly holding at least 10% of the total shares of the other enterprise;
d) An enterprise borrows or lends to another business in any form (including loans from third parties guaranteed from the party's financial resources and financial transactions available). similar nature) provided that the loan amount is at least equal to 25% of the owner's equity of the borrowing enterprise and accounts for more than 50% of the total value of medium and long-term debts of the borrowing enterprise;
d) An enterprise appoints a member of the board of directors to manage or take control of another enterprise provided that the number of members appointed by the first enterprise accounts for more than 50% of the total members of the board of directors. operating or taking control of the second business; or a member designated by the first enterprise has the right to determine the financial or business operations of the second enterprise;
e) Two enterprises with more than 50% of members of the board of directors or a board member have the right to decide on the financial policies or business activities designated by a third party;
g) The two businesses are operated or subject to human, financial and business control by individuals in the relationship of husband, wife, father, adoptive father, mother, adoptive mother , biological children, adopted children, biological siblings, biological siblings, younger siblings, brother-in-law, brother-in-law, sister-in-law, grandfather, grandmother, grandchild, grandfather, grandmother, grandson, aunt, uncle, uncle, uncle, aunt and nephew;
h) Two business establishments having a head office and a permanent establishment or a permanent establishment of a foreign organization or individual;
i) One or more businesses are under the control of an individual through this individual's contributed capital to that enterprise or directly involved in running the business;
k) Other cases in which the enterprise is subject to the management and control of the actual decision on the production and business activities of the other enterprise.
Article 6. Comparative analysis, selection of independent comparison objects to compare and determine the price of associated transactions
1. The principle of comparative analysis with independent transactions and the principle of nature determining the form to determine the nature of related-party transactions that are similar to those of independent comparables.
a) The nature of the transaction is collated between the legal contract or the transaction document, agreement of the parties associated with the practice of the parties. In case the taxpayer arises a related transaction but there is no agreement in writing or the agreement is not consistent with the independent transaction principle or the actual implementation is not appropriate with the independent transaction principle between the parties without Linkage and associated transactions must be determined in accordance with the nature of business between independent parties, in particular: The affiliate receives revenues and profits from transactions associated with taxpayers must have the right of ownership owning and controlling business risks for assets, goods, services, resources, economic benefits and the rights to generate income from shares, stocks and other financial instruments and taxpayers incurred costs from dealing with affiliates must receive benefits, kin values directly or contributing to revenue generation and added value for taxpayers' production and business activities in accordance with independent transaction principles;
b) The nature of the transaction is determined by the method of collecting information, evidence and data on transactions and risks of associated parties in practical business and production activities.
2. Comparative analysis must ensure the similarity between the independent comparables and the associated transaction, without any difference that materially affects the price level; profit rate or profit distribution ratio between parties. Where there is a difference materially affecting the price level; profit ratio or profit distribution ratio, must analyze, determine and make adjustments to eliminate material differences according to the comparability factors specified in Clause 3 of this Article and in accordance with each method of determining profit. valuation of related-party transactions as prescribed in Article 7 of this Decree.
Comparative analysis looks for similar independent comparison objects:
a) Selecting an independent internal comparison object is a transaction between a taxpayer and a party without an affiliated relationship, ensuring similarity with no significant difference affecting the price; profit margin or profit distribution ratio between parties. In case there is no similar independent internal comparison object, choose comparison object according to point b and c clause 3 Article 9 of this Decree. The comparison between associated and independent transactions is done on the basis of each transaction for each similar product. Where it is impossible to compare transactions by product, the aggregation of transactions must be consistent with the nature, business practices and the application of the method of determining the price of associated transactions to be performed in accordance with regulations. at Article 7 of this Decree;
b) Financial data of comparison objects must be reliable to use for tax declaration and calculation purposes in accordance with accounting, statistics and tax regulations. The time of transactions of independent comparison objects must be at the same time with the associated transaction or the fiscal year and the fiscal year of the taxpayer, except for the specific cases that need to be extended. Comparative space as stipulated in point d of this clause. The data format must be comparable, calculate the prices at the time of transaction or in the same tax period; Comparative data on profit margin or profit distribution rate must ensure at least three consecutive tax periods. For values of relative ratio, ratio, taxpayers round to the second digit after the decimal point. Where the relative number is derived from published data without the absolute number attached and does not use this rounding principle, take the published data with source citation;
c) Minimum number of independent comparison objects selected after comparative analysis and adjustment of selected key differences are as follows: One object in case of associated transactions or taxpayers Link translation and independent comparison object no difference; three objects in the case of independent comparison objects differ but there is enough information and data to be the basis for eliminating all material differences and five or more objects in case only information is available, data is the basis for eliminating most of the key differences of an independent comparison object;
In case the selected comparison objects do not have equal reliability, apply the statistical probability method to determine the standard independent trading range and select the middle value of the set. to adjust and re-determine the price, profit rate or profit distribution ratio of taxpayers according to the methods of determining the associated transaction prices specified in Article 7 of this Decree;
d) For specific or unique linked transactions that cannot find an independent comparison object for comparison, the scope of comparative analysis of the industry and geographic market should be expanded and compared Compare to search for independent comparison object. The expansion of the scope of comparative analysis is carried out as follows: Selecting the objects of independent comparison according to the economic sector with the highest similarity with the sub-sector of taxpayers' activities in the same geographical market. ; expanding the geographical market to countries in the region with industry conditions and similar economic development levels.
In case of expanding the scope of analysis to select independent comparison objects in other geographical markets, the similarity and qualitative and quantitative differences must be analyzed according to the provisions of Point e of this Clause and Item 2 Article 7 of this Decree; or use data and data of independent comparison subjects in the previous year and make adjustments to material differences due to time factors (if any).
The time to expand the collection of data and data of independent comparison subjects shall not exceed one fiscal year compared to the fiscal year of taxpayers, if the price determination method specified in Clause 2 Article 20 of the Decree is used. this.
d) Based on the valuation method and selected independent comparison objects, adjust prices; The profit margin or profit distribution ratio of taxpayers to determine the taxpayers' obligations to pay corporate income tax does not reduce the tax obligation to be paid to the state budget.
3. Comparative analysis applies the method of comparison, review and adjustment of material differences to comparable elements to select independent comparables.
a) Comparison factors include product properties of goods, services and properties (hereinafter referred to as product characteristics for short); operational and asset functions, production and business risks; conditions of contracts and economic conditions when transactions arise;
b) Analysis of operational and asset functions, production and business risks, must identify the main functions associated with the use of assets, capital, and costs, including cooperation in exploitation and use use of human resources, cost-sharing among affiliates and risks from asset and capital investment, as well as risks associated with the ability to collect profits related to business transactions. Functional analysis is a basis for determining and reallocating actual production and business risks of associated parties;
c) Analyzing specific comparative factors of intangible assets, must review and analyze the rights of economic benefits stipulated in contracts, agreements and non-contractual relationships that benefit Economic for the parties. Analysis of intangible assets must be based on property ownership; potential profit from intangible assets; limitations on geographical scope in the use and exploitation of rights to intangible assets; life cycle of intangible assets; rights and relationships that bring economic benefits; the franchisee's participation in the development of intangible assets and operational functions, the ability to control business risks of each of the associated parties in relation to the entire process of development, increase and single maintenance, protection and exploitation of intangible assets;
d) Analysis of economic conditions when transactions arise should include cost advantages based on geographical location, specialized functions; market development level and economic conditions of taxpayers' business sectors;
d) Comparative analysis, excluding critical differences, is an exclusionary analysis of qualitative and quantitative differences for information or financial data that has a material effect on the determinant. linked transaction prices according to each price determination method specified in Article 7 of this Decree. The determination of material differences is based on quantitative and qualitative, including: Quantitative differences are differences determined by absolute numbers of business cycles, number of years of establishment, operation of the enterprise or number relative to the difference in financial indicators according to specific characteristics of investment industries or operational functions, differences in working capital; Qualitative differences are information determined based on each method of price determination.
Information identified as material include: Differences in product characteristics, contractual conditions, functions, assets and risks and business lines, economic conditions of taxpayers and partners. independent comparison statue; differences in policies, investment environment, impact of production and business input costs in different geographical markets.
Quantitative and qualitative differences must be reviewed and adjusted in accordance with comparative factors that have a significant impact on the method of determining the associated transaction prices specified in Article 7 of this Decree.
e) Analysis results are the basis for selecting independent comparison objects suitable to each method of determining the associated transaction prices specified in Article 7 of this Decree.
4. The comparative analysis process includes the following steps:
a) Determine the nature of the associated transaction before conducting a similarity analysis with independent comparison objects;
b) Comparative analysis, search, selection of independent comparable objects on the basis of determining comparison time, product characteristics, contract conditions; analysis of industry, market, economic conditions when transactions arise; analysis of associated transactions and taxpayers implementing associated transactions; database source; methods of determining associated transaction prices and adjusting material differences (if any);
c) Determining the price, profit rate or profit distribution ratio based on the results of the analysis of independent comparison objects as a basis for comparison and application of the determination of the enterprise income tax obligation. payment of taxpayers, not reducing tax obligations payable to the state budget. The calculation method must be applied uniformly in the cycle, the production and business stage suitable for functions and business models as prescribed in Article 7 of this Decree.
Article 7. Comparison methods determine the price of the associated transaction
The comparison method of determining the price of the associated transaction (abbreviated as the method of determining the associated transaction price) is applied in accordance with the independent transaction principles, transactional nature and functions of taxpayers. uniform calculation and application bases throughout the entire cycle and production and business stages; Based on the financial data of the independent comparison objects selected according to the comparative analysis principles specified in Article 6 of this Decree. The method of determining the associated transaction price is selected in the methods specified below, based on the characteristics of the associated transaction, the availability of data information and the nature of the method of price determination.
The methods of determining the associated transaction prices are prescribed as follows:
1. Method of comparing associated transaction prices with independent transaction prices (hereinafter referred to as independent transaction price comparison method):
a) Cases of application of the method of comparing independent transaction prices, including: Taxpayers perform associated transactions for each type of goods, tangible assets and services subject to conditional delivery Translation, popular circulation on the market or with prices published on domestic and international goods and service trading floors; transaction of paying royalty fees when exploiting intangible assets; interest payment in borrowing and lending activities; or taxpayers perform both independent transactions and associated transactions for similar products on product characteristics and contract conditions;
b) The method of comparing independent transaction prices is done in principle that there is no difference in product characteristics and contract conditions when comparing independent transaction prices and associated transaction prices with significant effects. to product prices. Where there are significant differences affecting product prices, these key differences must be excluded.
The factors of product characteristics and contract conditions have a significant impact on product prices, including: characteristics, quality, brand, trade mark of the product and trading size and volume; conditions for contract of product supply and transfer: Volume, delivery time limit, payment term and other conditions of the contract; The right to distribute and consume goods, services and assets affects the economic value and market place where transactions occur and other factors affecting product prices are economic and functional conditions. taxpayers' dynamics.
c) Determination method: Product prices in associated transactions are adjusted according to product prices in an independent transaction or the value between the standard independent trading price range of independent comparison objects according to the provisions at This decree.
Where product prices are announced on domestic and international goods and service trading floors, product prices in associated transactions are determined according to announced product prices with the time and conditions of delivery. Similar translation.
Taxpayers who purchase machinery and equipment from overseas parties must have documents and vouchers proving the purchase price of machinery and equipment according to the principle of independent transactions at the time of purchase: For machines, new equipment, comparable price is the price of the associated party's purchase of such machinery and equipment from the independent party; For used machinery and equipment, there must be original invoices and vouchers at the time of purchase, then the asset value shall be re-determined according to current law provisions on management and use guidance. use and depreciation of fixed assets.
d) The result of determining the associated transaction price is the tax calculation price for declaration and determination of the payable enterprise income tax amount, but without reducing the tax obligation to pay to the state budget of taxpayers.
2. Method of comparing the profit rate of taxpayers with the profit rate of independent comparables:
a) Cases of applying the method of comparing taxpayers' profit margins to the margins of independent comparison subjects, including: Taxpayers do not have databases and information to apply Using the method of comparing the independent transaction prices specified in Item XNXX This or taxpayers cannot compare transactions by product on the basis of each transaction for each similar product, the aggregation of transactions It is conducted to ensure consistent with the nature, business practices and to select the profitability of appropriate independent comparison objects or taxpayers do not perform autonomy for the whole chain of activities. production or business activities or not participating in conducting transactions General and specific links as stipulated in Item 1 of this Article;
b) Principle of application: The method of comparing profit ratio is applied on the principle that there is no difference in functions, assets, risks; Economic conditions and accounting methods when comparing between taxpayers and independent comparators have a significant impact on profit margins. Where there are significant differences that affect profit margins, then these key differences must be excluded.
Functional factors, assets, business risks and economic conditions have a significant impact on profit margins, including: asset, capital and cost factors; control rights and decision making in practice serve the implementation of the main function of taxpayers; the nature of the business lines and the production and consumption markets; method of accounting and cost structure of products; economic conditions of the transaction.
Other impact factors are defined on the basis of practical implementation between the associated parties, including the commercial or financial relations of multinational corporations; technical assistance; sharing business secrets; use of special or part-time personnel and economic conditions of taxpayers' business sectors. Other comparative factors are product characteristics and contract conditions.
Taxpayers carry out business with simple functions, no function to decide the strategy and generate low value-added transactions, including businesses that carry out risk-free production or distribution. inventory inventories, market risks and no revenue generation, expenses from intangible asset exploitation activities do not incur losses incurred in business and production activities from these risks;
c) Determination method: Method of comparing profit ratio using gross profit ratio or net profit ratio of independent comparison objects selected to determine gross profit margin or profit rate The corresponding net profit of taxpayers. The selection of profit margin includes gross profit ratio and net profit margin on revenue, cost or assets depending on the nature and economic conditions of the transaction; functions of taxpayers and accounting methods of the parties. The basis for determining the profit rate including revenue, expenses or assets is the accounting data of taxpayers not controlled and decided by associated parties.
- The method of comparing the gross profit-to-revenue ratio (the resale price method):
The purchase price of goods, services, assets (cost price) from the associated party is equal to (=) the selling price (net revenue) of goods, services and assets resold to the independent party minus (- ) gross profit on the selling price (net revenue) of taxpayers minus (-) some other expenses included in the purchase price: Import tax; customs fees; insurance and international shipping costs (if any).
Gross profit on the selling price (net revenue) of taxpayers is determined from independent comparison objects equal to (=) the selling price (net revenue) of taxpayers multiplying (x) the rate of profit Gross profit on the selling price (net revenue) of independent comparison objects is selected.
Gross profit margin on selling price (net revenue) of independent comparison objects selected is the middle value of the standard independent trading range of gross profit rate on the selling price (net revenue ) of independent comparison objects selected to adjust in accordance with the principles stipulated in this Decree.
The purchase price from the associated party (or cost price) adjusted according to the independent comparison object is the tax calculation price, declaration of expenses, determination of payable enterprise income tax obligations of taxpayers.
- The method of comparing the gross profit-to-cost ratio (the cost-plus-interest method):
The selling price or net revenue of goods, services and assets sold to the associated party is determined by (=) the cost of goods, services and assets purchased from the independent party plus (+) benefits. Gross profit on the price of taxpayers.
Gross profit on taxpayer 's cost price is determined from independent comparison objects equal to (=) the taxpayer' s cost price multiplied by (x) the gross profit ratio on the cost of the comparison subjects. Setup is selected.
The gross profit-to-cost ratio of independent comparison objects selected is the middle value of the standard independent trading range of the gross profit ratio of the selected independent comparison objects. to adjust in accordance with the principles stipulated in this Decree.
The selling price for the associated party (or net revenue) adjusted according to the independent comparison object is the tax calculation price, declaration of expenses, determination of payable enterprise income tax obligations of taxpayers.
- Net profit margin comparison method:
The ratio of net profit not yet deducted from interest expenses and corporate income tax on revenue, expenses or assets of taxpayers performing related transactions shall be adjusted according to the net profit margin but not including interest expenses. borrowing on revenues, expenses or assets of independent comparison objects is selected, on that basis, to adjust and determine tax obligations of taxpayers.
Net profit does not include revenue difference and expenses of financial activities.
The net profit rate chosen is the middle value of the standard independent trading range of the net profit margin of the independent comparison objects selected to adjust and determine the taxable income and tax obligation. payment of taxpayers in accordance with the principles stipulated in this Decree.
Indicators of net profit ratios, excluding interest and corporate income tax, are determined according to the law on accounting, tax administration and enterprise income tax.
3. Method of profit distribution among affiliated parties:
a) Cases of application of profit distribution methods of associated parties, including: Taxpayers participating in integrated, specific, unique and closed transactions in corporations and activities developing new products, using proprietary technology, participating in the group's proprietary transaction value chain or the process of developing, increasing, maintaining, protecting and exploiting proprietary intangible assets , there is no basis to determine the price between affiliated parties or transactions that are closely related, concurrently implementing complex financial transactions related to many financial markets around the world; or taxpayers who participate in digital economic transactions, have no basis to determine the price between affiliated parties or to participate in the creation of additional value obtained from the synergies in corporations or real taxpayers. existing autonomy functions for the entire production and business process and not subject to the provisions in Clause 1 and Item XNXX of this Article;
b) Principle of application: The method of profit distribution is the method of distributing the total profit of the associated transaction to determine the profit of the taxpayer. The method of profit distribution applies to: The total actual profit and potential profit of associated transactions specified at Point a of this Clause are determined by financial data on the basis of vouchers. reasonable and valid; the value and profit of associated transactions must be determined according to the same accounting method for the entire period of application of the profit distribution method;
c) Determination method: Taxpayers' adjusted profits are allocated over the total profit of the associated transaction, including the actual profit and potential profit of the associated parties involved. can be obtained.
Taxpayers' adjusted profits are the sum of basic profits and extra profits. Basic profit is determined according to the profit comparison method specified in Clause 2 of this Article. Extra profits are determined according to the allocation ratio based on one or several factors such as turnover, costs, assets or human resources of the affiliated parties involved in the transaction and in accordance with the independent trading principle.
In case of insufficient information and data for profit distribution are adjusted according to the above provisions, the allocation may be based on one or several factors such as revenue, expenses, assets or human resources of the parties. link to join the transaction and conform to the independent trading principles.
d) Adjusted profits of taxpayers are grounds for determining taxable incomes and payable enterprise income tax amounts, but do not reduce taxpayers' obligation to pay to the state budget.
Article 8. Determination of expenses for tax calculation in some specific cases for enterprises with particular affiliate transactions
1. An associated transaction that is not suitable for the nature of an independent transaction or does not contribute to the generation of revenue or income for the taxpayer's production and business activities shall not be deducted from taxable expenses in the period, including including:
a) Cost of payment to the affiliate does not perform any production and business activities related to the business, production and business activities of the taxpayer;
b) Payment expenses for affiliated parties with production and business activities but the asset size, number of employees and production and business functions are not commensurate with the transaction value received by the affiliate. from taxpayers;
c) Payment expenses for associated parties do not have related rights and responsibilities for assets, goods and services provided to taxpayers;
d) Payment expenses for affiliated parties being residents of a country or territory that do not collect enterprise income tax, do not contribute to revenue generation and added value for production and business activities. of taxpayers.
2. Service provision transactions between related parties:
a) Except for expenses specified at Point b of this Clause, taxpayers may deduct service charges into tax calculation expenses in the period if they fully meet the following conditions: The service provided is valid. commercial, financial, economic and direct service for taxpayers' production and business activities; services from affiliates are only identified provided in the same circumstances as the independent parties pay for these services; Service fees are paid on the basis of independent transaction principles and the method of calculating the associated transaction prices or the allocation of service charges among associated parties must be uniformly applied throughout the group for the type Similar services and taxpayers must provide contracts, vouchers, invoices and information on the group's calculation method, allocation factors and pricing policies for the services provided.
In the case of related centers performing specialization functions and synergies of added value, taxpayers must determine the total value generated from these functions, determine the level of benefit distribution. The profit is consistent with the value of the associated parties after deducting (-) the corresponding service fee for the associated party to perform the function of coordinating and providing services of an independent transaction of similar nature. copper.
b) Service charges shall not be deducted when determining taxable income, including: Expenses arising from services provided only for the purpose of serving interests or creating value for other affiliated parties; service of shareholders' interests; duplication fee service provided by many parties for the same type of service, the value added for taxpayers cannot be determined; services are essentially the benefits that taxpayers receive as a member of a corporation and the costs associated with the affiliate for services provided by third parties through intermediaries are not closed. add value to the service.
3. The total interest expense incurred in the period of the taxpayer that is deductible when determining the taxable income of enterprise income tax does not exceed 20% of the total net profit from business activities plus interest expenses, depreciation expense in the period of the taxpayer.
This provision does not apply to taxpayers that are subject to the Law on Credit Institutions and the Law on Insurance Business.
Taxpayers declare the rate of interest expenses in the tax period according to the Form No. 01 in the Appendix issued together with this Decree.
Article 9. Database used in the declaration, identification and management of associated transaction prices
1. Database used in declaration and determination of associated transaction prices of taxpayers, including:
a) The database is provided by business information organizations, including financial and data information of businesses collected by these organizations from public information sources and kept, updated, use management (hereinafter referred to as commercial database);
b) Data information of enterprises published publicly on the stock market;
c) Information and data published on domestic and international goods and service trading floors;
d) Information published publicly by ministries, domestic agencies or other official sources.
2. The database used in the tax authority's associated transaction price management, including:
a) Database specified in Item 1 of this Article;
b) Information and data exchanged with partner tax agencies;
c) Information provided by domestic agencies and ministries to tax authorities;
d) Database of tax authorities.
Database of tax authorities used in risk management and fixing associated transaction prices for violations specified in Item 3 Article 12 of this Decree.
3. Analysis and selection of independent comparables for analysis and determination of independent transaction ranges in compliance with the principles of comparative analysis and methods of determining related transaction prices specified in this Decree, according to the provisions of this Decree. The order of precedence for comparison data selection is as follows:
a) Internal comparison objects of taxpayers;
b) Compare subjects residing in the same country or territory with taxpayers;
c) Subjects in regional countries with industry conditions and similar levels of economic development.
In case of selecting foreign comparison subjects in other geographical markets, the similarity and qualitative and quantitative differences must be analyzed according to the provisions of Point e, Clause XNXX Article XNXX and Item XNXX Article 3 This decree.
Article 10. Taxpayers' rights and obligations in declaring and determining affiliated transaction prices
1. Taxpayers with related-party transactions regulated by this Decree have the rights prescribed in the Law on Tax Administration.
2. Taxpayers whose related-party transactions fall within the scope of this Decree shall declare and determine the price of the related-party transactions without reducing the corporate income tax liability payable in Vietnam in accordance with regulations. provided for in this Decree.
Taxpayers shall prove the selection of price determination methods according to the provisions of this Decree when so requested by competent agencies.
3. Taxpayers whose related-party transactions are regulated by this Decree are responsible for declaring information about the related-party relationship and related-party transactions according to Form No. 01 in the Appendix to this Decree. and submit it together with the corporate income tax finalization declaration.
4. Taxpayers are responsible for keeping and providing transfer pricing determination dossiers, including:
a) National dossiers according to Form No. 02 in the Appendix issued together with this Decree;
b) Profile of global corporation information according to Form No. 03 in the Appendix issued together with this Decree;
c) Report on inter-national profits of the supreme parent company according to Form No. 04 in the Appendix issued together with this Decree.
In case the taxpayer is the supreme parent company in Vietnam with global consolidated revenue in the tax period of eighteen trillion dong or more, it is responsible for making the Inter-national profit report at the Determination Profile. linked transaction prices according to Form No. 04 in the Appendix issued together with this Decree.
In case the taxpayer has the supreme parent company in a foreign country, the taxpayer is responsible for providing a copy of the inter-national profit report of the supreme parent company in the case of the supreme parent company of the taxpayer This report must be submitted to the local tax authority according to the declaration form of the local tax authority or the declaration form according to Form No. 04 in the Appendix issued with this Decree. In case the taxpayer fails to provide the Inter-national Profit Statement, the taxpayer must provide a written explanation of the reasons, legal grounds and citation of the partner country's specific legal provisions. Allows taxpayers to provide inter-national Profit Reports.
5. The transfer pricing determination dossier is made before the time of annual corporate income tax declaration and finalization and must be kept and presented at the request of the tax authority for information provision. When the tax authority conducts an inspection and examination of the taxpayer, the time limit for providing the transfer pricing documentation shall not exceed 15 working days from the date of receipt of the request for information.
Dossiers of determination of associated transaction prices and information of taxpayers' documents and vouchers provided to tax offices according to the law on tax administration. The data, documents and documents used as a basis for comparative analysis and determination of affiliated transaction prices must clearly state the origin. Where the data of independent comparison objects are accounting data, taxpayers are responsible for storing and providing the Tax Authority with a soft copy, in spreadsheet format.
6. Taxpayers are responsible for providing complete and accurate information and taking responsibility before law for the information and documents in the transfer pricing determination dossier at the request of the tax authority during the process. submit to consultation before conducting inspection and examination according to the provisions of Article 12 of this Decree. The time limit for providing the transfer pricing determination dossier is not more than 30 working days after receiving the written request from the tax authority. If the taxpayer has a legitimate reason, the time limit for providing the transfer pricing determination dossier may be extended once, not exceeding 01 working days from the expiration date.
7. An independent audit or consulting company or a tax procedure company representing the taxpayer to make a transfer pricing determination dossier is responsible for complying with the tax administration law for enterprises have an association relationship specified in this Decree and take responsibility before law as prescribed.
8. The Ministry of Finance shall specifically guide information content for making Forms No. 01, No. 02, No. 03 and No. 04 in the Appendix to this Decree.
Article 11. Cases where taxpayers are exempt from declaration and exemption from making dossiers on determination of associated transaction prices
1. Taxpayers are exempted from declaration and determination of related-party transaction prices in Sections III and IV of Form No. 01 in the Appendix to this Decree in case only transactions with related parties are involved. corporate income tax payers in Vietnam, apply the same corporate income tax rates as the taxpayers and neither party is entitled to corporate income tax incentives in the tax period, but must declare the basis exemptions specified in Sections I and II in Form No. 01 of the Appendix issued with this Decree.
2. Taxpayers are responsible for declaring and determining transfer pricing prices according to Form No. 01 in the Appendix issued with this Decree, but are exempted from making transfer pricing documents in the following cases:
a) Taxpayers have associated transactions but the total revenue generated in the tax period is less than VND28 billion and the total value of all related transactions arising in the tax period is less than VND28 billion;
b) Taxpayers who have signed a prior agreement on price determination methods shall submit annual reports according to the law on the previous agreement on methods of determining prices. Related transactions that are not in the scope of application of the prior agreement on price determination methods, taxpayers shall declare and determine affiliated transaction prices according to the provisions of Article 10 of this Decree;
c) Taxpayers conduct business with simple functions, without any revenue, expenses from activities of exploiting and using intangible assets, having turnover below VND 800 billion, applying profit margin net interest income and corporate income tax on revenue, including the following areas:
Distribution: From 5% or more;
Production: From 10% or more;
- Processing: From 15% or more.
In cases where taxpayers do not apply the net profit rate prescribed in this point, they must make dossiers on determination of associated transaction prices according to regulations.
Article 12. Responsibilities and powers of tax authorities in managing linked transaction prices
1. Apply risk management in tax administration to associated transaction prices in accordance with tax laws.
2. The tax authorities shall base themselves on the principles of comparative analysis, the principles and methods of determining the transfer pricing specified in this Decree and the tax liability declaration information of the enterprises involved in the related transaction. for tax assessment in the following cases:
a) In cases where enterprises fully implement the accounting, invoice and voucher regimes: The determination of turnover, expenses or taxable incomes to determine tax obligations shall comply with the analysis principles compared to comparisons, methods of determining the associated transaction prices and databases used in the management of associated transaction prices prescribed in this Decree;
b) Other cases: The determination of tax based on the tax agency's database according to the regulations on tax assessment for enterprises has not fully implemented the accounting, invoice, voucher or other regulations. intended to handle tax violations.
3. Tax authorities have the right to fix prices; profit margin; profit distribution ratio used to declare and calculate tax, fix taxable income or payable corporate income tax amount for taxpayers having related-party transactions in the tax period based on the following information: Information, data and analysis and assessment of tax authorities, in cases where taxpayers have violated the law on price determination related transactions as follows:
a) Taxpayers fail to declare or declare incomplete information or fail to submit Form No. 01 in the Appendix issued together with this Decree;
b) The taxpayer provides incomplete information on the dossier of determination of associated transaction prices specified in Form No. XNXX, Form No. 02 in the Appendix issued together with this Decree or does not produce the Price Determination Document. associated transactions and data, vouchers and documents used as a basis for comparative analysis and determination of prices at dossiers of determination of associated transaction prices at the request of tax offices within the prescribed time limit. defined in this Decree;
c) Taxpayers use information about an independent transaction that is dishonest and inaccurate to analyze, declare and determine affiliated transaction prices or rely on documents, data and vouchers are not legal, invalid or do not specify the origin to determine the price, profit ratio or profit distribution rate applied to the associated transaction;
d) Taxpayers violate regulations on determination of associated transaction prices at Article 11 of this Decree.
4. Tax authorities are responsible for keeping confidential information provided by taxpayers related to the determination of associated transaction prices according to the provisions of this Decree. The provision of information to agencies and organizations shall comply with the provisions of Clause 5 of this Article.
5. In case through inspection, examination to determine the transfer price, there are problems with mechanisms and policies related to specialized industries and fields, the tax authority shall consult agencies and organizations. related organizations and individuals, specifically:
a) Specialized management agencies, specialized organizations and associations;
b) Tax offices shall supply dossiers, information and documents related to the determination of associated transaction prices to specialized agencies and organizations for comments. Consulted agencies and units shall keep information confidential according to law provisions.
6. Tax authorities exchange information with taxpayers and partner tax authorities according to the interrogation procedures before, during and after the process of inspection and examination of related-party transaction prices as follows:
a) In case, through the application of risk management in tax administration for the associated transaction price, the tax office deems it necessary to exchange information in advance with taxpayers on Model No. XNXX in the Appendix enclosed with This Decree and Dossiers of determination of the associated transaction prices of taxpayers and tax offices shall send official dispatches requesting the organization of consultations with taxpayers to exchange and provide information on price determination dossiers in advance. associated transactions of taxpayers under this Decree;
b) In case the Tax Authority needs to make contact, discuss with the counterpart tax agency on the Inter-national Profit Report and other relevant information in accordance with the provisions of the agreement procedure. bilateral and exchange of information in the relevant tax agreement. In case of necessity, the tax agency shall notify in writing the taxpayer of the suspension of inspection and examination in order to exchange information with the partner tax agency according to the provisions of tax law;
c) Tax authorities shall create conditions for taxpayers to prove and explain on data and data of independent comparison objects used in dossiers of determination of associated transaction prices.
7. In case the tax authority signs a pre-agreement on the method of price determination with the taxpayer, the tax authority is responsible for:
a) Implementing the management, inspection and inspection of associated transactions not covered by the prior agreement on methods of determining prices according to risk management principles.
b) Manage, check and inspect compliance with the previous Agreement on methods of determining taxpayers' prices according to regulations.
Article 13. Responsibilities of ministries, ministerial-level agencies and People's Committees of provinces and centrally-run cities
1. Ministry of Finance:
a) To be responsible for performing state management of associated transaction prices in accordance with this Decree;
b) To assume the prime responsibility and coordinate with the Ministry of Information and Communications in performing the information and propagation on state management of associated transaction prices;
c) Examine and inspect the implementation of regulations on associated transaction prices in accordance with this Decree.
2. State Bank
Coordinate to provide information and data on foreign loans and repayment of specific businesses with associated transactions based on the list requested by the tax authorities, including data on loan turnover, interest rate, interest payment period, principal payment, actual capital withdrawal, debt repayment (principal and interest) and other relevant information (if any).
3. Ministry of Planning and Investment
Coordinate to provide business registration data of enterprises; database of investment capital structure at the time of licensing and time of adjustment and amendment of investment certificates, business registration certificates and related information for investment projects when tax offices conduct inspection and examination, there must be signs of price transfer for evasion or tax avoidance at the request of tax authorities.
4. The Ministry of Science and Technology and the Ministry of Agriculture and Rural Development shall, within the ambit of their tasks and powers, have responsibilities
Coordinate to provide database related to technology transfer contracts; contract of transfer of industrial property rights; transfer of rights to plant varieties; dossiers of registration of intellectual property rights after being established with industrial property rights and plant variety rights and providing information when being consulted with tax authorities for the performance of tax administration for Affiliate transactions.
5. Ministry of Information and Communications
Coordinate to provide a database of businesses licensed in the field of management and information on associated transactions in the field of digital economy at the request of the Ministry of Finance.
6. Ministry of Industry and Trade
Coordinate to provide a database on the database of transaction prices of goods on domestic commodity exchanges and information according to the functions and tasks under the management of the Ministry of Industry and Trade, according to love demand for managing tax-related transaction prices of tax authorities.
7. People's Committees of provinces and centrally run cities
Direct the Department of Planning and Investment, Department of Finance and departments, agencies to build databases in the field of specialized management to serve the management of associated transaction prices.
TERMS ENFORCEMENT #
Article 14. Enforcement
This Decree takes effect from April 30, 2013, 01 year.
Article 15. Responsible for implementing
1. The Ministry of Finance shall specifically guide Articles 6, 7, Clause 8, Article 10, and Point c, Clause 2, Article 11; assume the prime responsibility for, and coordinate with concerned ministries, branches and People's Committees of provinces and centrally-run cities in implementing this Decree.
2. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People's Committees of the provinces and centrally-run cities and relevant organizations and individuals shall be responsible for the implementation of this Decree. this decision.