Business tax administration for associated transactions (Anti-transfer pricing)

Decree 20/2017 / ND-CP regulations on tax administration for enterprises with official affiliated transactions effective from date of import / export / import / export

This Decree prescribes principles, methods, order and procedures for determining associated transaction prices; obligations of taxpayers in declaring and determining prices of associated transactions and declaring tax payment; responsibilities of state agencies in tax administration, inspection and inspection for taxpayers who have associated transactions.

Taxpayers with associated transactions must declare their associated transactions; exclude factors that reduce tax obligations due to dominant affiliation, impact to determine tax obligations for associated transactions equivalent to independent transactions with the same conditions.

Tax authorities perform the management, inspection and inspection of associated transactions of taxpayers on the principle of independent transactions and the nature of deciding the form to not recognize associated transactions to reduce the meaning. taxation of enterprises with the state budget and adjustment of the associated transaction prices to properly determine the tax obligations prescribed in this Decree.

Download: Decree 20/2017 / ND-CP

Business tax administration

The principle of independent trading is applied according to the principle of transaction between independent parties, there is no association in effective tax agreements in Vietnam.

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Associated parties are related parties in one of the following cases: A party participates directly or indirectly in the management, control, capital contribution or investment in the party. that; Parties are directly or indirectly subject to the management, control, capital contribution or investment of another party

The above related parties are specified as follows: One enterprise holds directly or indirectly at least 25% of the equity of the other enterprise; both businesses have at least 25% of the equity held by a third party, directly or indirectly; an enterprise is the largest shareholder in terms of the equity of the other enterprise, holding directly or indirectly at least 10% of the total shares of the other enterprise; a business guarantees or otherwise lends money to another enterprise (including third party loans secured from affiliated party finances and substantive financial transactions similarly) on the condition that the loan is at least equal to 25% of the contributed capital of the borrower's owner and accounts for more than 50% of the total value of the medium and long-term liabilities of the borrower; ...

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"Associated transaction" is the transaction that arises between parties having an affiliated relationship in the production and business process, including: Purchasing, selling, exchanging, renting, leasing, borrowing, lending or transferring. transfer of machinery, equipment, goods and services; loans, loans, financial services, financial security and other financial instruments; buying, selling, exchanging, renting, leasing, borrowing, lending, transferring, transferring tangible assets, intangible assets and agreements on the use of resources such as synergies, cooperation in exploiting and using human resources force; cost sharing between affiliates.

See more: Regulations on associated transactions from 01-05-2017 (Anti-transfer pricing)