On June 13, 2019, the new Tax Administration Law (“TAL”) was passed by Vietnam’s National Assembly. TAL will come into effect on July 1, 2020, except the regulations on E-Invoicing applications, which will come to effect on July 1, 2022. This new law supplements as well as covers previous insufficient regulations.

Extending the deadline for filing personal income tax finalization

 The new TAL extends the deadline for submission of personal income tax finalization dossiers from 90 days to 120 days. Specifically, according to the old Tax Administration Law 2006, the deadline for  submission of tax finalization dossiers is 90 days after the calendar year end date or the fiscal year for the yearly settlement dossiers; while the new TAL allows individuals to submit personal income tax finalization dossiers no later than the last day of the 4th month from the end of the calendar year (1 month longer than the old Tax Administration Law 2006).

Expanding taxpayers rights

 In addition to the same rights under the old law, many new rights have been added to ensure the interests of taxpayers, such as (1) receiving documents related to tax obligations of functional agencies when conducting inspections, inspections and audits; (2) being  aware of the time limit for settling tax refunds, unpaid tax amounts and legal grounds for non-refundable tax amounts;  (3) searching, viewing and printing all electronic documents that they have sent to the electronic portal of tax administration agencies in accordance with the TAL and the Law on Electronic Transactions; (4) using electronic vouchers in transactions with tax administration agencies and relevant agencies and organizations; (5) not being sanctioned for tax-related administrative violations, not being charged for late payment for cases where taxpayers comply with guiding documents and handling decisions of tax authorities and competent state agencies regarding the content of taxpayers’ tax liability determination.

New tax administration regulations on e-commerce activities

 This is the first time that the Vietnamese Government has issued a regulation concerning e-commerce business activities. E-commerce has been growing more and more recently. Therefore, the issuance of regulations on tax administration in this field are necessary. Particularly, there is a new regulation on tax declaration: For e-commerce business, digital platform-based businesses and other services performed by overseas suppliers having a permanent establishment in Vietnam, an overseas supplier is obliged to directly or authorize the tax registration, tax declaration and payment in Vietnam according to the Ministry of Finance’s regulations.

 Additional functions of providing accounting services to tax agents

This new Law adds the function of providing accounting services for micro enterprises to tax agents. This provision allows tax agents to add accounting service provision functions in addition to on-going tax agency service provision.

This provision is suitable with the Law 04/2017/QH14 on Support for Small and Medium Enterprises, which helps micro enterprises save costs for hiring only one service instead of hiring two other services for tax and accounting services.

Tight management of transfer pricing

 To prevent acts of tax evasion through transfer pricing, the TAL strictly prohibits the following acts: Collusion, connection and this covers taxpayers and tax administration officials, tax administration agencies for transfer pricing and tax evasion.

To strictly manage acts of tax evasion, the TAL prescribes the principles of declaration and determination of tax calculation prices for associated transactions, specifically declaring and determining the associated transaction price on the principle of analysis; comparison with independent transactions and principles of nature of operation and transaction to determine tax obligations to determine payable tax obligations, such as in trading conditions between independent parties; Adjusting the price of the associated transaction according to an independent transaction to declare and determine the payable tax amount on the principle that it does not reduce the taxable income.

However, taxpayers with small scale, low tax risks are exempted from implementing regulations on tax declaration and determination based on the above content and apply a simplified mechanism in price declaration and determination.


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