The tax administration law regulates almost all aspects related to the management of tax collection from individuals and businesses in Vietnam.
Decree 126/2020/ND-CP guiding the Law on Tax Administration officially came into effect on December 5, 2020.
Due to the importance of the tax administration law and this decree, the General Department of Taxation has issued Official Letter 5189/TCT-CS to guide provincial and city tax departments and relevant individuals and businesses on the new contents of Decree 126/2020/ND-CP guiding the Tax Administration Law. The following is a summary of the important new points regarding tax administration.
1. Regarding the scope of regulation
This Decree provides detailed regulations for the implementation of several articles of the Law on Tax Administration applicable to the management of various taxes and other revenues belonging to the state budget; excluding provisions on tax management for enterprises with related-party transactions, the application of invoices and documents, administrative penalties in the field of taxation and invoices, and administrative penalties in the field of customs (which are regulated in separate Decrees under Decision No. 936/QD-TTg dated July 26, 2019 of the Prime Minister).
2. Regarding tax management for taxpayers during periods of temporary suspension of business operations.
a) Regarding the basis for determining the period during which taxpayers temporarily suspend operations or resume operations before the deadlines stipulated in Clauses 1 and 3 of Article 4.
New feature 1: Based on the provisions of Clause 1, Article 37 of the Law on Tax Administration, the Decree stipulates that for taxpayers who are organizations, business households, or individual businesses subject to business registration and who have been approved, notified, or requested by competent State agencies to temporarily suspend business operations or resume business operations before the deadline, the period of temporary suspension or resumption of business operations before the deadline shall be in accordance with the document issued by the competent State agency. The tax authority does not accept written registration documents for temporary suspension of business operations or resumption of business operations before the deadline from the taxpayer but accepts the document issued by the competent State agency.
Before: Clause 2, Article 21 of Circular No. 95/2016/TT-BTC stipulates that the period of temporary suspension of business or resumption of business operations before the deadline shall be determined according to the taxpayer's registration document. The tax authority receives registration documents for temporary suspension of business operations or resumption of business operations before the deadline from all taxpayers.
New feature 2: Based on the provisions of Clause 2, Article 37 of the Law on Tax Administration, the Decree stipulates that taxpayers who are organizations, business households, or individual businesses not subject to business registration must submit a written registration for temporary suspension of business or resumption of business operations before the deadline to the tax authority at least one working day before the temporary suspension or resumption of business operations.
Before: Clause 1, Article 21 of Circular No. 95/2016/TT-BTC stipulates a timeframe of 15 days for organizations and 01 working day for households, groups of individuals, and individual businesses.
New feature 3: The regulations are supplemented to specify the timeframe for processing and providing results regarding the temporary suspension of business operations by tax authorities to taxpayers who are organizations, household businesses, or individual businesses not subject to business registration.
Before: This regulation does not exist yet.
b) Regarding tax management for taxpayers during periods of temporary suspension of business operations as stipulated in Clause 2, Article 4.
New features: Amend the regulations on the authority and responsibility of tax authorities regarding tax management and the authority and responsibility of taxpayers regarding the fulfillment of tax obligations during periods when taxpayers temporarily suspend operations or business activities.
Before:
Article 14 of Circular No. 151/2014/TT-BTC amends point d, Clause 1, Article 10 of Circular No. 156/2013/TT-BTC dated November 6, 2013 of the Ministry of Finance guiding the implementation of a number of articles of the Law on Tax Administration; the Law amending and supplementing a number of articles of the Law on Tax Administration and Government Decree No. 83/2013/ND-CP dated July 22, 2013 (collectively referred to as Circular No. 156/2013/TT-BTC):
“e) Taxpayers who do not incur tax obligations during a period of business suspension are not required to file tax returns for that period. However, if the taxpayer suspends business for less than a full calendar year or fiscal year, they are still required to file an annual tax return…”
c) Add a provision stating that taxpayers who register directly with the tax authority are not allowed to register for temporary suspension of business operations when the tax authority has issued a Notice that the taxpayer is not operating at the registered address, as stipulated in Clause 4, Article 4.
Before: Applying tax administration regulations to other revenues belonging to the state budget that are collected by tax administration agencies (collectively referred to as taxes).
3. Regarding tax registration
New feature 1: Amendments to regulations regarding individual taxpayers: When there is a change in information on their identity card, citizen identification card, or passport, the date of the change is 20 days (30 days for mountainous, highland, border, and island districts) from the date recorded on the identity card, citizen identification card, or passport (Clause 2, Article 6).
Before: The Tax Administration Law stipulates that the deadline for submitting documents to change tax registration information is 10 working days from the date the change occurs.
New feature 2: The amendment to the regulations regarding taxpayers' responsibilities in carrying out tax procedures with the directly managing tax authority before changing their registered office address to another province allows them to transfer the remaining corporate income tax and after-tax profit after deducting funds that have been provisionally paid but not yet due for filing the final tax return, to offset the amount payable according to the final tax return (Clause 2, Article 6).
Before: Clause 2 of Article 8 of Decree No. 83/2013/ND-CP does not stipulate that taxpayers are allowed to transfer these amounts.
New feature 3: The regulations regarding the taxpayer's responsibility in carrying out tax procedures with the directly managing tax authority when restoring the tax identification number are amended. In principle, the taxpayer must fully settle all tax and other payments to the state budget with the directly managing tax authority. In cases where the taxpayer has outstanding tax and other payments to the state budget, but the competent state authority agrees to allow installment payments as committed by the taxpayer, or the payment deadline has been extended, or the payment is not subject to late payment penalties as stipulated in the Law on Tax Administration, then the taxpayer is not required to fulfill the tax and other payments to the state budget obligations when restoring the tax identification number (Clause 4, Article 6).
Before: Article 20 of Circular No. 95/2016/TT-BTC stipulates that taxpayers must settle all tax debts and other payments due to the state budget.
4. Regarding tax declaration and tax calculation
4.1. Regarding supplementary tax return filing
New feature 1: The regulations regarding supplementary filing of personal income tax returns for organizations and individuals paying income from salaries and wages stipulate that they must simultaneously file supplementary monthly and quarterly returns containing corresponding errors (Point a, Clause 4, Article 7).
Before: Clause 5, Article 10 of Circular No. 156/2013/TT-BTC stipulates: If the annual tax return has already been submitted, only the annual tax return needs to be supplemented; it is not necessary to supplement the monthly or quarterly returns containing corresponding errors or omissions.
New feature 2: The regulation is amended to stipulate that taxpayers are only allowed to file supplementary declarations to increase the value-added tax amount requested for refund when they have not yet submitted the tax return for the next tax period and have not yet submitted a tax refund request (Point b, Clause 4, Article 7).
Before: Based on the regulations in Circular No. 156/2013/TT-BTC dated November 6, 2013, of the Ministry of Finance, the General Department of Taxation has issued guidance: In cases where the deadline for filing the next tax period has not yet arrived, and the taxpayer has not yet submitted the tax return to transfer the remaining deductible VAT from the previous tax period to the "Tax deductible from the previous period carried over" item on the official tax return of the next tax period, and has not yet submitted the tax refund request to the tax authority, they may file an amended tax return to increase the refund request item on the amended tax return for that tax period.
New feature 3: Amend the regulation allowing taxpayers to submit supplementary tax returns for each tax return if they discover errors or omissions in the initial tax return submitted to the tax authority, but before the deadline for submitting tax returns for the tax period containing the errors or omissions has passed (Clause 4, Article 7).
Before: According to Point a, Clause 5, Article 10 of Circular No. 156/2013/TT-BTC: After the deadline for submitting tax returns, if taxpayers discover errors in the tax returns already submitted to the tax authorities, they are allowed to submit supplementary tax returns.
4.2. Regarding Value Added Tax (VAT) declaration (excluding VAT from lottery activities, electricity production, business activities of household businesses, and property tax for individuals)
New feature 1: The regulations are amended to require taxpayers to file separate VAT tax returns for amounts collected on behalf of competent state agencies and for business cooperation contracts that do not establish separate legal entities (Points a, c, and d, Clause 2, Article 7).
Before: This regulation does not exist yet.
New feature 2:
- The regulations are amended to require taxpayers to prepare separate VAT tax returns for each investment project eligible for VAT refund and submit them to the tax authority where the investment project is located; at the same time, they must offset the VAT on goods and services purchased for each investment project against the VAT payable (if any) of ongoing business activities in the same tax period.
- In cases where the Project Owner assigns a Project Management Board and a Branch in a different province from where the Project Owner's head office is located to directly manage one or more investment projects in multiple localities on behalf of the Project Owner, the Project Management Board and Branch must prepare separate tax declarations for each investment project and submit them to the tax authority where the investment project is located. They must also offset the input VAT of the investment project against the VAT payable on all business activities of the Project Owner and Branch during the same tax period.
- Once the investment project to establish a business has been completed and all procedures for business registration and tax registration have been finalized, the business entity that is the owner of the investment project must compile the total value-added tax (VAT) incurred, the VAT refunded, and the VAT not yet refunded for the project. This information must then be handed over to the newly established business so that the new business can declare, pay taxes, and request VAT refunds in accordance with regulations from the directly managing tax authority.
(Point d, Clause 2, Article 7 and Point a, Clause 1, Article 11).
Before:
- Clause b, point 2, Article 10 of Government Decree No. 209/2013/ND-CP dated December 18, 2013, as amended and supplemented by Clause 6, Article 1 of Decree No. 100/2016/ND-CP, stipulates: Businesses currently operating and subject to value-added tax under the deduction method that have a new investment project (excluding investment projects for the construction of houses for sale) in a province or centrally-governed city different from the province or city where their head office is located, and which is in the investment phase, not yet operational, not yet registered for business, and not yet registered for tax, shall have their input value-added tax offset against the value-added tax payable on their production and business activities at the head office. After offsetting, if the remaining value-added tax on purchased goods and services used for investment is 300 million VND or more, the value-added tax for the investment project shall be refunded, except in cases specified in point c of the clause. This means that businesses must declare and file separate tax refund applications for investment projects.
- Point c, Clause 3, Article 11 of Circular No. 156/2013/TT-BTC and Clause 3, Article 18 of Circular No. 219/2013/TT-BTC, as amended and supplemented by Clause 3, Article 1 of Circular No. 130/2016/TT-BTC, provide guidance as follows:
"Taxpayers subject to VAT under the deduction method who have investment projects in the province or centrally-governed city where their head office is located, and are in the investment phase, must prepare separate tax declarations for the investment project and offset the VAT on goods and services purchased for the investment project against the VAT on their ongoing production and business activities. After offsetting, if there is any remaining VAT on goods and services purchased for the investment project that has not been fully offset according to the regulations of the VAT law, the VAT for the investment project will be refunded."
Taxpayers with investment projects must prepare separate tax returns for the investment project and submit them to the tax authority directly managing their head office. If the taxpayer has an investment project in a province or centrally-governed city different from the province or city where the head office is located, and the project is in the investment phase, not yet operational, not yet registered for business, and not yet registered for tax, the taxpayer must prepare a separate tax return for the investment project and submit it to the tax authority directly managing the head office. In cases where a taxpayer establishes Project Management Boards or branches located in provinces or centrally-governed cities other than the province or city where its head office is located, to directly manage one or more investment projects in multiple localities on behalf of the taxpayer, the Project Management Board or branch must have a seal as prescribed by law, maintain accounting records and documents as prescribed by law, have a bank account, be registered for tax and be issued a tax identification number. In such cases, the Project Management Board or branch must file separate tax returns with the local tax authority where it is registered for tax.
Once the investment project to establish a business has been completed and all procedures for business registration and tax registration have been finalized, the business entity that is the owner of the investment project must compile the total value-added tax (VAT) incurred, the VAT refunded, and the VAT not yet refunded for the project. This information must then be handed over to the newly established business so that the new business can declare, pay taxes, and request VAT refunds in accordance with regulations from the directly managing tax authority.
In cases where a taxpayer has an investment project and needs to offset the value-added tax (VAT) on goods and services purchased for the investment project against the VAT on ongoing production and business activities, the VAT declaration for the investment project (monthly or quarterly) shall be made concurrently with the VAT declaration of the head office.”
New feature 3: Amend the regulations stipulating that taxpayers are not required to file VAT tax returns in cases where their only business activities are exempt from VAT according to the law on value-added tax, and export processing enterprises only engage in export activities (Points a, c, Clause 3, Article 7).
Before: Based on the regulations in Circular No. 156/2013/TT-BTC, the General Department of Taxation provides guidance as follows: If a taxpayer only produces and sells goods and services not subject to VAT, they are not required to declare or pay VAT. However, if they sell goods or services subject to VAT (for example, asset liquidation), the taxpayer must use invoices issued by the tax authority and pay VAT as prescribed.
New feature 4: Amend the regulations on quarterly VAT declaration for revenue from supporting industrial products included in the List of Priority Supporting Industrial Products with revenue exceeding VND 50 billion/year (Article 9).
Before: Clause 1, Article 3 of Circular No. 21/2016/TT-BTC stipulates: Taxpayers shall declare VAT quarterly for revenue from supporting industrial products included in the List of Priority Supporting Industrial Products (regardless of whether the revenue is above or below 50 billion VND/year).
New feature 5: The revised regulations clearly state that value-added tax (VAT) is a tax declared monthly, quarterly, or on a case-by-case basis. If a taxpayer declares VAT monthly and meets the conditions for quarterly declaration, they may choose to switch to quarterly declaration or continue declaring monthly. The monthly/quarterly declaration period remains stable throughout the calendar year. If a taxpayer is currently declaring monthly and meets the conditions for quarterly declaration and wishes to switch to quarterly declaration, they must submit a written document to the tax authority. If a taxpayer is currently declaring VAT quarterly and discovers they no longer meet the conditions for quarterly declaration, they are not required to resubmit the monthly declarations for previous quarters, but must submit a Statement determining the additional monthly tax payable compared to the amount declared quarterly, and late payment penalties must be calculated (Article 9).
Before:
- Clause 3 of Article 4 of Decree No. 91/2014/ND-CP only stipulates the principle of application for taxpayers who meet the condition of having total revenue from goods and services in the preceding year of VND 50 billion or less.
- Article 15 of Circular No. 151/2014/TT-BTC dated October 10, 2014, issued by the Ministry of Finance, provides guidance as follows: the monthly/quarterly tax declaration period remains stable for the entire calendar year and follows a stable 3-year cycle. If a taxpayer meets the conditions for quarterly declaration but wishes to declare monthly, a written request must be submitted to the tax authority. If a taxpayer is currently declaring VAT quarterly and discovers they no longer meet the conditions for quarterly declaration, from the year following the year of discovery until the end of the stable cycle, the taxpayer must declare VAT on an annual basis.
New feature 6: Amend the regulations regarding cases where taxpayers maintain centralized accounting at their head office but have subsidiary units or business locations in other provincial-level administrative units different from their head office. In such cases, the taxpayer shall declare taxes at the head office and calculate and allocate tax obligations payable according to each locality where state budget revenue is received (Clause 2, Article 11).
Before:
- According to Clause 1, Article 11 of Circular No. 156/2013/TT-BTC, it is guided that: In cases where a production facility is located in a different province, does not directly sell goods, does not generate revenue, and does not carry out centralized accounting at the head office, it must still calculate and allocate the tax payable to the locality where the head office is located.
- According to Points b and c, Clause 11, Article 11 of Circular No. 156/2013/TT-BTC and Point a, Clause 1, Article 2 of Circular No. 26/2015/TT-BTC, the following are guidelines: VAT declaration must be made in the locality where the activity originates for: construction, installation, and sales/transfer of real estate outside the province (revenue under 1 billion VND; excluding: real estate business projects, inter-provincial projects), ODA project owners who are not eligible for VAT refund, and foreign contractors implementing ODA projects who are eligible for VAT refund (except for inter-provincial projects).
New feature 7: Amend the regulations regarding the location for filing value-added tax returns for all real estate transfer activities of infrastructure investment projects and houses for transfer (including cases where advance payments are collected from customers according to the progress) in provinces other than where the taxpayer's head office is located, to the tax authority where the real estate transfer activity takes place (Clause 1, Article 11, Point b).
Before: Point c, Clause 1, Article 11 of Circular No. 156/2013/TT-BTC stipulates: If a taxpayer has a real estate business project in a different province from where its head office is located, and has established a subsidiary unit (branch, project management board, etc.), the taxpayer must register for tax and pay taxes using the deduction method for real estate business activities with the local tax authority where the real estate business activity takes place. If the taxpayer does not establish a subsidiary unit (branch, project management board, etc.), the taxpayer must declare and pay taxes at the tax authority managing its head office.
New feature 8: Amendments to regulations on tax declaration documents for each VAT declaration method include: removing the "List of VAT paid for temporary business outside the province" form No. 01-5/GTGT and the "Notification of VAT declaration period change from quarterly to monthly" form No. 07/GTGT. Adding the "Request for change of tax period from monthly to quarterly" form No. 01/ĐK-TĐKTT and the "Determining the amount of tax payable monthly, additional compared to the amount declared quarterly" form No. 02/XĐ-PNTT (List of tax declaration documents in Appendix I issued with Decree No. 126/2020/NĐ-CP).
Before:
- According to Point b, Clause 2, Article 11 of Decree No. 83/2013/ND-CP and Clause 2, Article 5 of Decree No. 12/2015/ND-CP, the value-added tax declaration dossier for monthly, quarterly, or recurring transactions is the Value-Added Tax Declaration Form for the month, quarter, or recurring transaction.
- According to Point e, Clause 1, Article 2 of Circular No. 26/2015/TT-BTC guiding the VAT declaration dossier using the deduction method at the head office, in case of temporary operations outside the province, it must include the Statement of VAT paid for temporary operations outside the province, form No. 01-5/GTGT.
- Article 15 of Circular No. 151/2014/TT-BTC stipulates that in cases of changing the tax period from monthly to quarterly, a Notice of Change in VAT Declaration Period from Quarterly to Monthly (Form No. 07/GTGT) must be submitted. The Notice of Application of VAT Calculation Method (Form No. 06/GTGT) has been abolished according to Circular No. 93/2017/TT-BTC.
4.3. Regarding the declaration of excise tax (excluding excise tax from lottery activities)
New features: Supplementing the special consumption tax declaration dossier specifically for biofuel production and blending facilities (List of tax declaration dossiers in Appendix 1 issued with Decree No. 126/2020/ND-CP).
Before: According to Decree No. 14/2019/ND-CP dated February 1, 2019, of the Government, there are no separate tax declaration documents for biofuel production and blending facilities; instead, they use the same general excise tax declaration documents as all goods subject to excise tax.
4.4. Regarding corporate income tax declaration (excluding corporate income tax from oil and gas exploration and production activities)
New feature 1: Amendments to regulations on declaring corporate income tax on a per-transaction basis for real estate transfer activities: Accordingly, declaring corporate income tax on real estate transfer activities on a per-transaction basis is only mandatory for taxpayers who calculate corporate income tax using the percentage-based method on revenue as prescribed by the law on corporate income tax (Point e, Clause 4, Article 8).
Before: Article 16 of Circular No. 151/2014/TT-BTC stipulates: Corporate income tax declaration for each transaction related to real estate transfer activities applies to enterprises that do not have real estate business functions and enterprises that do have real estate business functions if they so desire.
New feature 2: Amendments to regulations on quarterly provisional corporate income tax payments: Accordingly, the total amount of provisional corporate income tax paid for the first three quarters of the tax year must not be less than 75% of the corporate income tax payable according to the annual tax settlement, effective from the 2021 tax year. If a taxpayer underpays compared to the amount of provisional tax due for the first three quarters, they must pay late payment penalties calculated on the underpaid amount from the day following the last day of the deadline for provisional corporate income tax payment for the third quarter until the date the remaining amount is paid into the state budget (Point b, Clause 6, Article 8).
Before: According to Clause 6, Article 4 of Decree No. 91/2014/ND-CP and Article 17 of Circular 151/2014/TT-BTC, if the total amount of four provisional tax payments is 20% or more lower than the corporate income tax payable according to the final tax return, the enterprise must pay late payment interest on the difference of 20% or more between the provisional payments and the final tax return, calculated from the day following the last day of the deadline for paying the fourth quarter tax until the date of actual payment of the remaining tax amount.
New feature 3: Amend the regulations on provisional payment of corporate income tax for taxpayers who implement infrastructure investment projects, housing for transfer or lease-purchase, and receive advance payments from customers according to the progress in accordance with the law. They shall make provisional corporate income tax payments quarterly at a rate of 1% on the amount received (Point b, Clause 6, Article 8).
Before: Article 16 of Circular No. 151/2014/TT-BTC stipulates that enterprises shall make provisional tax payments based on revenue minus expenses (if the enterprise can determine the expenses corresponding to the recorded revenue) or at a rate of 1% on the revenue received (if the enterprise has not yet determined the expenses corresponding to the revenue).
New feature 4: Supplementing regulations on filing corporate income tax returns at the tax authority where the business operates in a different province or city from the head office (Point h, Clause 1, Article 11).
Before: Article 16 of Circular No. 151/2014/TT-BTC stipulates that taxpayers shall file tax returns centrally at their head office, covering both income generated at the head office location and income generated at their subsidiary production facilities.
New feature 5: Supplement Appendix 03-3D/TNDN; 03-8A/TNDN; 03-8B/TNDN; 03-8C/TNDN; 03-9/TNDN with the Tax Return Form 03/TNDN (List of tax declaration documents in Appendix 1 issued with Decree No. 126/2020/ND-CP).
4.5. Regarding resource tax declaration (excluding resource tax from oil and gas exploration, prospecting, and exploitation activities)
New features: The regulations are supplemented to stipulate that the exploitation of infrequent resources that have been licensed by competent state agencies or do not fall under the cases requiring licensing according to the law should be carried out on a case-by-case basis (Point d, Clause 4, Article 8).
Before: This regulation does not exist yet.
4.6. Regarding the declaration of income from remaining after-tax profits after the allocation of funds (Point c, Clause 6, Article 8)
New features: The regulation stipulates that the total remaining after-tax profit after deducting provisional fund contributions for the first three quarters of the tax year must not be less than 75% of the remaining after-tax profit after deducting fund contributions as per the annual tax settlement, effective from the 2021 tax year.
Before: Clause 3, Article 7 of Circular No. 61/2016/TT-BTC stipulates that the total remaining after-tax profit after deducting provisional contributions for the fiscal year shall not be less than 80% of the remaining after-tax profit after deducting contributions payable according to the annual settlement.
4.7. Regarding tax declaration for activities involving the exploitation of secured assets (Point b, Clause 5, Article 7; Point b, Clause 2, Article 8)
New features: The regulations are amended to stipulate that if a credit institution or a third party authorized by the credit institution engages in activities related to the exploitation of collateral assets while awaiting processing, and the collateral assets remain under the ownership of the borrowing customer (organization or enterprise), then the credit institution or the third party authorized by the credit institution shall file quarterly tax returns for value-added tax, corporate income tax, and personal income tax. Specifically:
- Submit the value-added tax, corporate income tax, and personal income tax returns for the exploitation of natural resources during the processing period using form No. 01/TSBĐ (in the list of tax declaration documents in Appendix 1 issued with Decree No. 126/2020/NĐ-CP).
- Detailed statement of value-added tax, corporate income tax, and personal income tax for the exploitation of state-owned assets during the processing period, according to form No. 01/TC-TSBĐ (in the list of tax declaration documents in Appendix 1 issued with Decree No. 126/2020/NĐ-CP).
Before: There are no regulations specifying separate tax return forms for credit institutions or third parties authorized by credit institutions to file tax returns on behalf of taxpayers with secured assets, and which are filed concurrently with the business activities of the credit institution or the third party authorized by the credit institution.
4.8. Regarding tax declaration for electricity production activities
New features: Amend the regulation stipulating that taxpayers with power plants (applicable to all types of power production) located in a province or city other than their head office must file value-added tax returns at the tax authority where the power plant is located (Clause c, Point 1, Article 11).
Before:
- For hydropower production: According to Article 23 of Circular No. 156/2013/TT-BTC, hydropower production facilities must declare VAT in the locality where their head office is located and pay VAT to the local treasury where the hydropower plant is situated.
- For other electricity production activities, excluding hydropower: In accordance with the provisions of point d, Article 11 of Circular No. 156/2013/TT-BTC, taxpayers shall declare value-added tax at their head office and pay value-added tax to the locality where the production facility is located at a rate of 2% on revenue excluding value-added tax.
4.9. Regarding the declaration of environmental protection tax on gasoline and diesel fuel.
New feature 1: Amend the regulations on environmental protection tax payers for petroleum products to include primary traders, dependent units of primary traders, subsidiaries of primary traders and dependent units of primary traders, where subsidiaries of primary traders are defined according to the provisions of the Enterprise Law (including subsidiaries in which the primary unit holds a controlling stake of over 50% or subsidiaries in which the primary trader has the right to directly or indirectly decide on the appointment of the majority or all members of the Board of Directors, Director or General Director of that company or has the right to decide on the amendment or supplementation of the charter of that company but the primary enterprise's capital contribution ratio is less than 50%) (Clause 4, Article 11).
Before: According to Clause b, Point 2, Article 16 of Government Decree No. 83/2013/ND-CP dated July 22, 2013; and Article 15 of Circular No. 156/2013/TT-BTC dated November 6, 2013 of the Ministry of Finance, the taxpayers liable for environmental protection tax on petroleum products are: petroleum trading companies, branches of petroleum trading companies, independent accounting units directly under petroleum trading companies; joint-stock companies in which petroleum trading companies hold a controlling stake (over 50% of shares) or branches directly under member units, and branches directly under joint-stock companies.
Under this regulation, only subsidiaries in which the parent company holds a controlling stake of over 50% are subject to environmental protection tax declaration and payment. If a company still meets the criteria of being a subsidiary of a parent company as stipulated in the Enterprise Law (such as having the right to directly or indirectly decide on the appointment of the majority or all members of the Board of Directors, Director, or General Director of that company, or having the right to decide on amendments or additions to the company's charter), but the parent company's capital contribution is less than 50%, then it is not subject to environmental protection tax declaration and payment.
New feature 2: The regulations are supplemented to include provisions on allocating the environmental protection tax payable on petroleum products to each locality where the subsidiary unit is headquartered, in cases where the primary trader or its subsidiary has a business unit operating in a different province or centrally-governed city from where the primary trader or its subsidiary is headquartered, and the subsidiary unit does not maintain separate accounting records to declare the environmental protection tax (Clause 4, Article 11).
Before: This regulation does not exist yet.
New feature 3: Supplement the Appendix with the table allocating the amount of environmental protection tax payable to localities that are entitled to revenue from petroleum products (in Appendix 1 issued with Decree No. 126/2020/ND-CP).
Before: This regulation does not exist yet.
4.10. Regarding personal income tax declarations and other taxes and income of household businesses and individuals renting out property.
a) Regarding tax return documents:
New feature 1: Amendments to regulations: Organizations and individuals paying income without withholding personal income tax on a monthly or quarterly basis are still required to file tax returns (Clause 3, Point b, Article 7).
Before: According to point a.1, clause 1, Article 16 of Circular No. 156/2013/TT-BTC dated November 6, 2013, organizations and individuals paying income that does not incur personal income tax withholding on a monthly or quarterly basis are not required to file tax returns.
New feature 2: The regulations stipulate that in business cooperation agreements with individuals, the individual does not directly file tax returns. The organization is responsible for filing value-added tax returns on the entire revenue from the business cooperation activities in accordance with the organization's tax laws and tax management regulations, regardless of the form of profit sharing. Simultaneously, the organization is responsible for filing and paying personal income tax returns on behalf of the individual partner. In cases where the business cooperation agreement with an individual is for a household business or an individual business as defined in Clause 5, Article 51 of the Law on Tax Administration, and the individual's business activities coincide with the business activities of the organization, both the organization and the individual shall file tax returns corresponding to the actual results of the business cooperation as prescribed (Point c, Clause 5, Article 7).
Before: Based on the regulations in Circular No. 92/2015/TT-BTC dated June 15, 2015, and Circular No. 39/2014/TT-BTC, the General Department of Taxation has issued the following guidance for Grab Taxi Co., Ltd. (a company operating under a business cooperation model in the transportation sector): When signing a business cooperation contract with a partner (organization or individual) receiving a share of the revenue from transportation activities, the company is responsible for calculating 10% value-added tax on the shared revenue, declaring and paying value-added tax and corporate income tax on the shared revenue. For the share of revenue from an individual partner: The company deducts 3% value-added tax and 1,5% personal income tax, and simultaneously declares and pays the taxes on behalf of the individual; For the revenue portion of the partner organization: Depending on the partner's VAT declaration method (direct or deduction), the Company is responsible for issuing the corresponding invoice; based on the actual cooperation contract, the Company will divide the revenue between the partner and the Company so that both parties can declare taxes according to regulations.
New feature 3: Amendments to regulations on filing and paying taxes on behalf of individuals receiving dividends in securities; individuals who are existing shareholders receiving bonuses in securities; individuals whose capital increase is recorded due to capital gains; and individuals contributing capital in the form of real estate, capital contributions, or securities. The time for filing and paying taxes on behalf of individuals is when the individual makes a transfer of securities of the same type, a transfer of capital, or a withdrawal of capital (Point d, Clause 5, Article 7).
Before: According to Clauses 9 and 10 of Article 26 of Circular No. 111/2013/TT-BTC dated August 15, 2013, issued by the Ministry of Finance: Individuals receiving dividends in securities; individuals who are existing shareholders receiving bonuses in securities; individuals whose capital increase is recorded due to capital gains; and individuals contributing capital in the form of real estate, capital contributions, or securities must directly declare and pay personal income tax. The time at which individuals directly declare and pay personal income tax is when they transfer securities of the same type, transfer capital, or withdraw capital.
New feature 4: The regulations are supplemented to stipulate that organizations paying bonuses, sales support, promotions, trade discounts, payment discounts, and other monetary or non-monetary support to individuals who are household businesses or individual business owners paying taxes under the lump-sum method are responsible for declaring and paying taxes on behalf of these individuals as prescribed (Point d, Clause 5, Article 7).
Before: There are no specific regulations on this matter. To address the issue, based on Circular No. 219/2013/TT-BTC dated December 31, 2013, and Circular No. 92/2015/TT-BTC dated June 15, 2015, the General Department of Taxation has issued several temporary documents guiding organizations not to deduct tax, and not to declare or pay tax on behalf of individuals in cases of trade discounts.
New feature 5: Amend the regulation regarding the buyer of real estate where the real estate transfer contract stipulates that the buyer is responsible for paying taxes on behalf of the seller (except in cases of tax exemption, non-payment of tax, or temporary postponement of tax payment), then the buyer is responsible for declaring and paying taxes on behalf of the seller as prescribed (Point g, Clause 5, Article 7).
Before: According to Clause 11, Article 2 of Government Decree No. 12/2015/ND-CP dated February 12, 2015, if a transfer contract stipulates that the buyer is responsible for paying taxes on behalf of the seller, then the buyer is responsible for declaring and paying taxes on behalf of the seller, without exception in cases where tax exemption, non-payment of tax, or temporary postponement of tax payment is permitted.
b) Regarding the types of taxes declared monthly, quarterly, annually, on each occasion of tax liability arising, and final tax settlement declarations as stipulated in Article 8.
New feature 1: Amendments to regulations regarding organizations and individuals paying income from salaries and wages subject to personal income tax withholding: They are required to file personal income tax returns monthly. In cases where organizations and individuals pay income that meets the conditions for quarterly value-added tax filing, they may choose to file personal income tax returns quarterly (Point a, Clause 1, Article 8).
Before: According to Point a.2, Clause 1, Article 16 of Circular No. 156/2013/TT-BTC: Organizations and individuals paying income that generates tax withholding in at least one type of personal income tax return of VND 50 million or more must file tax returns monthly, except in cases where the organization or individual paying income files value-added tax returns quarterly.
New feature 2: Amendments to regulations regarding individuals with income from salaries and wages who are subject to direct tax declaration, allowing them to choose to declare personal income tax monthly or quarterly (Points a and c, Clause 1, Article 8).
Before: According to Clause 3, Article 21 of Circular No. 92/2015/TT-BTC: Resident individuals with income from salaries and wages must declare tax directly to the tax authorities on a quarterly basis.
New feature 3: Amendments to regulations on authorization for personal income tax settlement for individuals who are employees transferred from an old organization to a new organization due to mergers, consolidations, divisions, separations, changes in business type, or when the old and new organizations are within the same system: the new organization is responsible for settling the tax according to the individual's authorization for both the income paid by the old organization and for recovering any personal income tax withholding certificates issued by the old organization to the employee (if any) (Point d.1, Clause 6, Article 8).
Before: Circular No. 92/2015/TT-BTC only stipulates that for employees transferred from an old organization to a new organization due to mergers, consolidations, divisions, separations, or changes in business type, the new organization is responsible for settling taxes, under the authorization of the individual, for both the income paid by the old organization and the new organization. The General Department of Taxation has issued guidance that for employees transferred from an old organization to a new organization within the same system, the new organization is responsible for settling taxes, under the authorization of the individual, for both the income paid by the old organization and the new organization.
c) Regarding the location for submitting tax returns as stipulated in Article 11
New feature 1: The regulations are supplemented to stipulate that individuals with income from renting real estate abroad must file tax returns at the tax authority directly managing their place of residence (Point g, Clause 6, Article 11).
Before: This regulation does not exist yet.
New feature 2: The concept of housing and commercial housing is supplemented to include construction works and houses that have been handed over and put into use by the project but have not yet been granted Certificates of Land Use Rights, Ownership of Houses and Assets Attached to Land according to the provisions of the law on housing (Point d.2, Clause 6, Article 11).
Before: The concepts of housing and commercial housing are defined in the legal document on housing (Decree No. 71/2010/ND-CP dated June 23, 2010, detailing the implementation of the Law on Housing).
New feature 3: The regulations are supplemented to specify the location for filing personal income tax returns for individuals with salary and wage income from two or more sources. In cases where individuals have both income subject to direct declaration and income from organizations that have already deducted taxes, they must file their final tax return at the tax authority where they have the largest source of income during the year (Point b.1, Clause 7, Article 11).
Before: Clause 3, Article 21 of Circular No. 92/2015/TT-BTC stipulates: In cases where individuals have income from two or more sources (regardless of whether they have income from salaries and wages subject to self-declaration and also income subject to withholding at source), the place of filing the tax return is determined according to the place where the personal allowance is calculated. If no place calculates the allowance, it is determined according to the Tax Department where the individual resides.
d) Regarding cases where the tax authorities calculate taxes and issue tax payment notices as stipulated in Article 13.
New feature 1: The procedure for notifying the payment of personal income tax for individuals with income from capital transfers, individuals with income from receiving dividends in the form of shares, and profits recorded as capital increases upon transfer is abolished (Clauses 1 and 2, Article 13).
Before: Appendix 02, the list of forms for individual businesses and forms for personal income tax issued with Circular No. 92/2015/TT-BTC dated June 15, 2015, of the Ministry of Finance, stipulates that: The tax authority must notify the amount of tax payable for individuals with income from capital transfer, individuals with income from receiving dividends in the form of shares, and profits recorded as capital increase upon transfer.
New feature 2: The regulations are amended to stipulate that upon receiving the personal income tax return from the transfer of real estate from the taxpayer, the tax authority is responsible for sending a document using Form 01/CCTT-TĐMN issued with Appendix II of Decree 126/2020/NĐ-CP requesting the competent state agency to provide cadastral information as a basis for issuing a payment notice to the taxpayer within 03 working days from the date of receiving the taxpayer's tax return (Point c, Clause 6, Article 13).
Before: This regulation does not yet exist.
New feature 3: The regulations are supplemented to specify the time limit for the tax authority to send a document to the competent state agency to adjust and supplement information in cases where the tax authority receives an information transfer form to determine land-related financial obligations, or where the decision, notice, or document from a competent state agency is illegal or incomplete according to regulations (Clause 8, Article 13).
Before: This regulation does not yet exist.
4.11. Regarding the declaration, calculation, and issuance of notices for payment of business license fees.
New feature 1: Amendments to regulations regarding business license fee payers (excluding household businesses and individual businesses) newly established (including small and medium-sized enterprises converted from household businesses) or those establishing additional dependent units, business locations, or starting production and business activities (collectively referred to as organizations) require them to submit business license fee declarations no later than January 30th of the year following their establishment or commencement of production and business activities (point a, Clause 1, Article 10).
Before: According to Clause 3, Article 1 of Government Decree No. 22/2020/ND-CP dated February 24, 2020, the deadline for submitting the license fee declaration form is before January 30 of the year following the year of establishment or commencement of production and business activities.
New feature 2: The regulation is amended to stipulate that in cases where there is a change in capital during the year, the business license fee payer must submit the business license fee declaration form no later than January 30th of the year following the year in which the change occurred (Point a, Clause 1, Article 10).
Before: There are no regulations requiring the declaration of business license fees in cases where there is a change in capital during the year.
New feature 3: Amendments to regulations regarding household businesses and individual businesses that are not required to submit business license fee declarations (point b, Clause 1, Article 10).
Before: Clause 3, Article 1 of Decree No. 22/2020/ND-CP stipulates: Households, individuals, and groups of individuals paying taxes using the lump-sum method are not required to declare business license fees.
4.12. Foreign Contractor Tax
New feature 1: The regulations have been amended to stipulate that for foreign transport companies filing quarterly provisional corporate income tax returns and annual final settlements, the total provisional corporate income tax paid for the first three quarters of the tax year must not be less than 75% of the corporate income tax payable according to the annual final settlement, effective from the 2021 tax year. If the taxpayer underpays compared to the provisional tax payable for the first three quarters, late payment penalties must be paid as prescribed (Clause 6, Article 8, point g).
Before: This regulation does not exist yet.
New feature 2: Supplement the table allocating the value-added tax payable by foreign contractors to the localities where revenue is received in the tax declaration dossier of foreign contractors using the direct method (in Appendix I issued with Decree No. 126/2020/ND-CP).
Before: This regulation does not exist yet.
4.13. Other regulations regarding tax declaration and tax calculation
New feature 1: The regulations are supplemented with provisions on cases where taxpayers are not required to file tax returns, including: Taxpayers whose only business activities are exempt from tax according to the tax laws for each type of tax; Taxpayers who file for the termination of their tax identification number, except in cases of cessation of operations, termination of contracts, or business reorganization as stipulated in Clause 4, Article 44 of the Law on Tax Administration (points a and d, Clause 3, Article 7).
Before: This regulation does not exist yet.
New feature 2: The regulations are supplemented to stipulate that organizations and individuals who file and pay taxes on behalf of taxpayers must fully comply with all regulations on tax filing and payment as prescribed for taxpayers (Clause 5, Article 7).
Before: This regulation does not exist yet.
New feature 3: The regulations are amended to require taxpayers to submit tax returns to the tax authority of the previous location if, by the deadline for submitting tax returns, the taxpayer has not yet completed the procedures for changing the registered address with the business registration authority, cooperative registration authority, or tax authority of the new location (Clause 6, Article 7).
Before: This regulation does not exist yet.
New feature 4: It is not specified whether the tax authority receiving and processing tax declarations is the Tax Department, the Tax Sub-department, or the Director of the Tax Department who decides where to submit the tax declaration; it only specifies the tax authority in the geographical area where the declaration is submitted (Article 11).
Before: Circular No. 156/2013/TT-BTC and its amending and supplementing circulars specifically stipulate that the tax authority receiving and processing tax declaration dossiers is the Tax Department, the Tax Sub-department, or the Director of the Tax Department, who decides where the tax declaration dossiers should be submitted.
New feature 5: The regulations are amended to include provisions that some taxpayers, despite maintaining centralized accounting at their head office and conducting business in multiple provinces other than where their head office is located, are not required to submit a Tax Allocation Table (if any) for each province where they receive state budget revenue (points a, b, d, e, f, Clause 2, Article 11).
Before: This regulation does not exist yet.
New feature 6: The regulations are supplemented to stipulate that, based on the actual situation in the managed area, if the competent provincial-level state agency decides to decentralize revenue collection to the location of a subsidiary unit or business location within the same province as the taxpayer's head office, the taxpayer shall calculate and allocate the tax payable to the district where the revenue originates (Clause 9, Article 11).
Before: This regulation does not exist yet.
New feature 7: The regulations stipulate that in cases of business type conversion (excluding privatized state-owned enterprises), if the converting enterprise inherits all tax obligations of the converted enterprise, it is not required to file a tax return up to the time of the decision on the business conversion; the enterprise shall file a tax return at the end of the year (Clause 6, Article 8).
Before:
- Article 16 of Circular No. 151/2014/TT-BTC dated October 10, 2014, issued by the Ministry of Finance, stipulates that: In cases of business type conversion where the receiving entity inherits all tax obligations of the business before the conversion (such as converting from a Limited Liability Company to a Joint Stock Company or vice versa; converting a 100% State-owned Enterprise into a Joint Stock Company, and other cases as prescribed by law), the business is not required to file a tax return up to the time of the conversion decision; the business only needs to file an annual tax return as prescribed.
- Clause 1, Article 21 of Circular No. 92/2015/TT-BTC dated June 15, 2015, issued by the Ministry of Finance, stipulates: "In cases of business type conversion where the receiving entity inherits all tax obligations of the pre-conversion enterprise (such as converting a limited liability company to a joint-stock company or vice versa; converting a 100% state-owned enterprise into a joint-stock company, and other cases as prescribed by law), the pre-conversion enterprise is not required to file a tax return up to the time of the decision on the business conversion; the receiving entity shall file the annual tax return as prescribed."
5. Regarding tax assessment
New feature 1: Article 14 of the Decree adds several cases for tax assessment, including: Failure to comply with tax inspection and audit decisions; Buying, selling, exchanging, and accounting for the value of goods and services at prices not in accordance with normal market transaction values; Buying and exchanging goods and services using illegal invoices, or using invoices where the goods and services are genuine as determined by the investigating, inspecting, and auditing agency and have been declared for tax purposes (Article 14).
New feature 2: Specific regulations for determining tax liability for taxpayers that are organizations: Based on the tax authority's database and the commercial database; valid inspection and audit documents and results; verification results; minimum revenue of 03 businesses in the same locality with the same goods, industry, and scale; in cases where the locality does not have or has insufficient information about the goods, industry, and scale of the business, information from businesses in other localities with similar natural conditions and economic development will be used to determine taxable revenue (Clause 1, Article 15).
Before: There are no regulations specifying the number of businesses whose information needs to be collected, or the order in which businesses should be identified.
New feature 3: Additional grounds for determining tax on individuals transferring, inheriting, or receiving real estate as a gift (point b.2, clause 1, Article 15).
Before: There are no regulations yet.
New feature 4: The regulations are amended to stipulate that taxpayers who are organizations paying value-added tax using the direct method, and individuals conducting business and paying tax using the declaration method, will have their tax payable assessed based on a percentage of their revenue as prescribed (Clause 2, Article 15).
Before: There are no regulations yet.
New feature 5: The regulations clearly define the authority, procedures, and form for tax assessment decisions (Article 16).
Before: This regulation does not exist yet.
6. Regarding fulfilling tax obligations in the case of departure from the country.
New features: Based on Article 66 and Clause 7 of Article 124 of the Law on Tax Administration regarding the fulfillment of tax payment obligations, the Decree has added a provision stating that individuals who are the legal representatives of taxpayers (businesses) and are subject to enforcement of administrative decisions on tax management and have not yet fulfilled their tax payment obligations are subject to temporary travel bans.
Before: The regulations only stipulate that Vietnamese citizens leaving the country to settle abroad, Vietnamese citizens residing abroad, and foreigners must fulfill their tax obligations before leaving Vietnam (Clause 1, Article 40 of Circular No. 156/2013/TT-BTC).
7. Regarding the write-off of tax arrears
New features: Article 23 of Decree No. 126/2020/ND-CP stipulates the dossier, time frame, and procedures for debt write-off in cases where the taxpayer has died, gone missing, lost legal capacity; dissolved; gone bankrupt; ceased business operations at the business address; or had their business registration certificate revoked.
Before: There are no regulations yet.
8. Regarding coordination between tax authorities and business registration agencies and local governments.
Coordination between tax authorities, business registration agencies, and local governments in implementing debt write-offs and reimbursement to the State of tax debts, late payment penalties, and fines that were waived before the issuance of business registration certificates.
New features: Article 25 of Decree No. 126/2020/ND-CP stipulates the coordination mechanism between tax authorities and business registration agencies at all levels in controlling taxpayers whose debts have been written off. If a taxpayer whose debt has been written off wishes to resume production and business activities, they must repay the state the amount of tax that was written off.
Before: There are no regulations regarding the exchange of information between tax authorities and business registration agencies in cases where tax debts have been written off.
9. Regarding measures for enforcing tax debt collection.
New feature 1: The tax authority has the right to request the customs authority to implement coercive measures to stop customs procedures for exported and imported goods (Clause 8, Article 33 of Decree No. 126/2020/ND-CP).
Before: There are no regulations stipulating that tax authorities can request customs authorities to enforce measures to halt customs procedures for taxpayers engaged in the export or import of goods.
New feature 2: Regarding enforcement measures for invoices, if the decision to enforce the suspension of invoice usage expires and the taxpayer has not yet paid the full amount of tax owed to the state budget, and if the conditions for applying further enforcement measures are not met or if the measure of suspending invoice usage is effective, then the effective enforcement measure shall continue to be applied. If, while enforcing the suspension of invoice usage, there is information or conditions that allow for the implementation of a more effective prior or subsequent enforcement measure, the tax authority shall simultaneously apply the prior or subsequent enforcement measure to collect the tax owed to the state budget (Clause b.2, Point 3, Article 34 of Decree No. 126/2020/ND-CP).
Before: The enforcement of invoice collection must not be applied simultaneously with other enforcement measures.
New feature 3: The enforcement decision takes effect from the date of issuance (as stipulated in Articles of Chapter VII of Decree 126/2020/ND-CP).
Before: The decision to seize an account takes effect 05 days after the date of issuance (Clause 3, Article 27 of Decree No. 129/2013/ND-CP), and the decision to seize an account takes effect 03 days after the date of issuance (Clause 1, Article 36 of Decree No. 129/2013/ND-CP).
10. Regarding information disclosure
New features: Additional regulations include: provisions on the public disclosure of taxpayer information in cases where taxpayers fail to file tax returns or do not operate at their registered address; regulations on the content and form of public disclosure of taxpayer information; and the authority to decide on the public disclosure of taxpayer information rests with the head of the direct tax administration agency (Article 29 of Decree 126/2020/ND-CP).
Before: There are no regulations yet.
11. Regarding the responsibilities of relevant organizations and individuals in providing taxpayer information.
New feature 1: The following state agencies are authorized to provide information to tax authorities: Ministries including: Ministry of Construction, Ministry of Industry and Trade, Ministry of Information and Communications, Ministry of Transport, Ministry of Labour - Invalids and Social Affairs, Ministry of Health, Ministry of Science and Technology; and other competent state agencies of these Ministries and agencies: Auditing agencies; General Statistics Office; Social Insurance agencies; Courts, arbitration agencies… (Clause 2, Article 26 of Decree No. 126/2020/ND-CP)
New feature 2: The regulations are amended to stipulate that the Ministry of Finance shall preside over the process, and other ministries, sectors, and state management agencies shall be responsible for coordinating with the Ministry of Finance to develop regulations on information exchange, provision, and coordination between the Ministry of Finance and each unit, specifying the content, timeframe, and form of information provision (Clause c, Point 2, Article 26).
New feature 3: Additional information provided to the tax authorities for tax management purposes (Clause 2, Article 26 of Decree 126/2020/ND-CP) such as:
- Information on e-commerce activities, franchising, content of e-commerce and franchising licenses, and related information in tax management for organizations and individuals engaged in e-commerce activities.
- Information regarding revenue related to land and land-attached assets, information on resource exploitation licenses, and annual exploitation output for each license.
- Information on activities related to the provision and use of Internet services, online information, online video games; provision of information related to online advertising activities; buying and selling information technology products and services in the online environment, business based on digital platforms…
New feature 4: Supplementing regulations on the responsibility of relevant organizations and individuals to provide information (Article 27 of Decree 126/2020/ND-CP):
- Additionally, organizations and individuals paying income are responsible for providing information on income payments and the amount of tax withheld from taxpayers during annual tax settlement or upon request from tax authorities.
- The competent authority is added to be responsible for providing information to customs authorities before auctioning imported goods that are subject to tax exemption or non-taxable status, in order to determine the tax liability.
- The deadline for organizations and individuals to provide information to tax authorities has been extended to no later than 10 days from the date of receiving a written request for information from the tax authorities.
New feature 5: Regulations on the responsibilities of state management agencies, organizations, and individuals in providing information (Article 28 of Decree 126/2020/ND-CP).
- The regulations are amended to stipulate that when the tax authority requests information from state management agencies, organizations, or individuals responsible for providing information as prescribed in Article 15 and Clauses 2 and 4 of Article 98 of the Law on Tax Administration, the state management agencies, organizations, or individuals must provide the information fully and on time according to the content requested by the tax authority.
- The regulations are supplemented to stipulate that state management agencies, organizations, and individuals shall be held responsible for failing to provide information on time or providing incomplete information when requested by tax authorities, which affects the determination of tax obligations or the time taken to process tax refunds, exemptions, and reductions for taxpayers, in cases where compensation is required for taxpayers as prescribed in Clause 2, Article 61 and Clause 3, Article 75 of the Law on Tax Administration.
12. Regarding the duties and powers of commercial banks and payment intermediary service providers as stipulated in Article 30.
New feature 1: Supplementing the duties and powers of commercial banks to collect taxes and other revenues belonging to the state budget as prescribed in Article 56 of the Law on Tax Administration and Government Decree No. 11/2020/ND-CP dated January 20, 2020, regulating administrative procedures in the field of the State Treasury (Point a.1, Clause 1, Article 30).
Before: There are no regulations yet.
New feature 2: Amendments to the regulations on the duties and powers of commercial banks regarding overdue or incomplete payment of taxes and state budget revenues due to the fault of the commercial bank stipulate that commercial banks shall be responsible for paying late payment penalties as prescribed by the Law on Tax Administration (point a.4, Clause 1, Article 30).
Before: Point b, Clause 4, Article 5 of Circular No. 84/2016/TT-BTC stipulates: In cases where a bank fails to comply with the payment order requirements of an organization or individual using payment services; it shall cooperate with the relevant bank or State Treasury agency to recover the mistakenly transferred or excess amount when carrying out payment transactions in accordance with the law; and compensate for damages caused by its own fault in accordance with the law.
New feature 3: The regulations stipulate that commercial banks are required to notify and verify relevant units to handle cases of errors as prescribed, and are not allowed to refund tax payments to taxpayers if the information has already been communicated to the State Treasury. Specifically, commercial banks where the State Treasury maintains an account must verify the payment documents with the State Treasury (Point a.5, Clause 1, Article 30).
Before: Point d, Clause 1, Article 17 of Circular No. 84/2016/TT-BTC stipulates: If a taxpayer makes two or more electronic tax payment transactions for the same payment in a single day, the taxpayer must contact the bank or State Treasury serving the taxpayer to request an adjustment to a single payment. If the tax amount from the duplicate transaction has already been accounted for and paid into the state budget, the taxpayer may choose to use that amount to pay off outstanding tax obligations or request a refund in accordance with tax management laws.
New feature 4: The duties and powers of commercial banks that have connected to the tax authority's electronic portal are supplemented to include retrieving information using the revenue identification code on the tax authority's electronic portal to record on the payment voucher for state budget expenditure. They are not allowed to cancel money transfer orders once tax payment information has been transmitted to the tax authority's electronic portal (Point b.2, Clause 1, Article 30).
Before: There are no specific regulations regarding this matter yet.
New feature 5: Amend the current regulations on the duties of commercial banks to build information technology systems that meet the standards for data message exchange in accordance with the message formats issued by the tax authorities. Ensure the confidentiality and use only the information on state budget revenue collection from taxpayers and customs declarants provided by the tax authorities on the tax authority's electronic portal for state budget revenue collection (Point b.3, Clause 1, Article 30).
Before: Points a and b of Clause 3, Article 5 of Circular No. 84/2016/TT-BTC stipulate that: Commercial banks shall enter into cooperation agreements with the General Department of Taxation to coordinate budget collection and shall be responsible for exploiting and protecting information related to budget collection provided by tax authorities through the General Department of Taxation's electronic portal.
New feature 6: Adding responsibilities for payment intermediary service providers in the collection of taxes and other revenues belonging to the state budget (Point c, Clause 1, Article 30).
Before: There are no specific regulations regarding the responsibilities of payment intermediary service providers in tax collection and payment.
New feature 7: The regulations are supplemented to stipulate the responsibility of taxpayers to provide information about their payment accounts opened at banks to the tax authorities (Clause 2, Article 30).
Before: This regulation does not exist yet.
13. Purchasing information, documents, and data from providers to support tax management.
New features: The regulations on purchasing information, documents, and data from suppliers to serve tax management work have been supplemented. This regulation allows tax authorities and customs authorities to use funds allocated from the state budget to purchase information, documents, and data from suppliers to serve tax management and the handling of violations of tax and customs laws (Article 40 of Decree 126/2020/ND-CP).
Before: This regulation does not exist yet.
14. Content regarding the Pre-agreement mechanism
Content regarding the Advance Pricing Agreement (APA) mechanism for enterprises with related-party transactions (Article 41)
14.1. Regarding regulations on the application of advance agreements on methods for determining taxable value.
New features: The regulations are supplemented to stipulate that the application of advance agreements on methods for determining taxable prices must comply with the principles prescribed in Clause 6, Article 42 of the Law on Tax Administration, specifically:
- Based on the taxpayer's proposal, the agreement between the tax authority and the taxpayer is reached through unilateral, bilateral, and multilateral agreements between the tax authority, the taxpayer, and the relevant foreign tax authority or territory;
- Information provided by taxpayers must be based on verified commercial databases to ensure legal compliance.
- It must be approved by the Minister of Finance before implementation; for bilateral and multilateral agreements involving foreign tax authorities, the provisions of the law on international treaties and agreements shall apply.
Before: This regulation does not exist yet.
14.2. Regarding the procedural steps in handling APA application requests.
New features: The regulations supplement the procedural steps in handling APA application requests, including: Consultation before submitting the formal APA application (if any); Submitting the formal APA application; Submitting a request to initiate bilateral agreement procedures (in the case of a bilateral or multilateral APA application); Taxpayer's obligations to submit annual APA reports (and ad hoc APA reports, if any); Procedures for requesting extension, modification, withdrawal, or cancellation of APA (if any).
Before: Consultation with the General Department of Taxation before submitting a formal APA application: Previously, according to Article 8 of Circular No. 201/2013/TT-BTC, the consultation step before submitting the formal application was mandatory in the process of handling APA applications from taxpayers. Now, according to Decree No. 126/2020/ND-CP, this step is not mandatory but depends on the needs of the taxpayer.
14.3. Specific regulations regarding the authority to approve and sign APAs
New features: Based on the results of assessment, exchange, and negotiation with taxpayers (in the case of unilateral APAs) or with partner tax authorities and taxpayers (in the case of bilateral or multilateral APAs) regarding the content of the APA, the General Department of Taxation drafts the APA and submits it to the Ministry of Finance leadership for approval and signing. For bilateral and multilateral APA agreements involving foreign tax authorities, the Ministry of Finance seeks opinions from the Ministry of Foreign Affairs, the Ministry of Justice, and other relevant agencies, and submits the APA to the Government and the Prime Minister for their opinions on signing the APA, following the procedures and sequence for signing international treaties and agreements as stipulated by law.
Before: Decree No. 83/2013/ND-CP previously stipulated that the Ministry of Finance would approve and assign the General Department of Taxation to sign APA agreements.
14.4. Regarding the effectiveness of the APA
New features: The effective date of the APA is determined according to the provisions of Clause 16, Article 3 of the Law on Tax Administration. For bilateral or multilateral APAs related to the tax administration of foreign tax authorities, the Ministry of Finance shall report to the Government for consideration and decision.
Before: Decree No. 83/2013/ND-CP previously stipulated that signed APAs are valid for a maximum of 05 years and can be extended for no more than another 05 years; the effective date must not be before the date the taxpayer submits the application for the APA.