Are representative offices required to submit VAT declarations in Vietnam?

Are representative offices required to submit VAT declarations in Vietnam?

According to Clause 2, Article 44 of the Enterprise Law 2020, a representative office is a dependent unit of a business, tasked with representing the business's interests under authorization and protecting those interests. A representative office does not perform the business functions of the enterprise.

Based on Article 3 of the Value Added Tax Law 2008 provisions:

Tax Subjects

Goods and services used for production, business, and consumption in Vietnam are subject to value-added tax, except for those specified in Article 5 of this Law.

Additionally, Article 4 of the Value Added Tax Law 2008 states:

Taxpayers

Value-added taxpayers include organizations and individuals producing, trading goods, and services subject to value-added tax (hereinafter referred to as business establishments), and organizations and individuals importing goods subject to value-added tax (hereinafter referred to as importers).

Moreover, Official Dispatch 10419/CT-TTHT of 2019 on tax declaration for representative offices issued by the Hanoi Tax Department provides guidance as follows:

Based on the above regulations, in the case of a company establishing a representative office, the company must register a 13-digit tax code for the representative office as specified in Article 8 of Decree 78/2015/ND-CP dated September 14, 2015, of the Government of Vietnam. The representative office shall declare and pay taxes as follows:

+ License Fee: The representative office shall follow the guidance in Article 2 of Circular 302/2016/TT-BTC dated November 15, 2016, of the Ministry of Finance.

+ Value Added Tax: If the representative office does not directly sell goods and does not generate revenue, the company shall centrally declare at the headquarters according to the guidance in Clause 1, Article 11 of Circular 156/2013/TT-BTC dated November 6, 2013, of the Ministry of Finance.

In cases where the representative office does not directly sell goods and does not generate revenue, the company shall perform centralized declaration at the headquarters.

Thus, a representative office still submits a VAT declaration; if the representative office does not directly sell goods and does not generate revenue, no VAT declaration is required, and tax declaration will be centralized at the headquarters.

Are representative offices required to submit VAT declarations in Vietnam? (Image from the Internet)

When is the deadline for submitting VAT declarations in Vietnam?

Based on Article 44 of the Tax Administration Law 2019, the deadlines for submitting VAT declarations are specified as follows:

The deadline for filing tax declaration dossiers for taxes declared monthly or quarterly is as follows:

+ No later than the 20th day of the month following the month of tax obligation arising for monthly declaration and payment;

+ No later than the last day of the first month of the following quarter for quarterly declaration and payment.

- The deadline for filing tax declaration dossiers for taxes calculated annually is as follows:

+ No later than the last day of the third month from the end of the calendar year or financial year for year-end tax finalization dossiers; no later than the last day of the first month of the calendar year or financial year for annual tax declaration dossiers;

+ No later than the last day of the fourth month from the end of the calendar year for personal income tax finalization dossiers for individuals directly finalizing taxes;

+ No later than December 15 of the previous year for tax declaration dossiers of business households and individuals paying tax by the assessment method; for new business households and individuals, the deadline for filing assessment tax declaration dossiers is no later than 10 days from the start of business.

- The deadline for filing tax declaration dossiers for taxes declared and paid upon each occurrence of tax obligation is no later than the 10th day from the date of the tax obligation arising.

- The deadline for filing tax declaration dossiers for cessation of business, termination of contracts, or business reorganization is no later than the 45th day from the occurrence of the event.

- the Government of Vietnam shall provide regulations on the deadline for filing tax declaration dossiers for agricultural land use tax; non-agricultural land use tax; land levy; land rent, water surface rent; fees for the right to exploit minerals; fees for the right to exploit water resources; registration fee; license fee; amounts collected into the state budget according to regulations on the management and use of public assets; and cross-border profit reporting.

- The deadline for filing tax declaration dossiers for exported and imported goods is as stipulated by the Customs Law.

- In cases where taxpayers file their tax declarations electronically on the last day of the filing deadline and the tax authority's electronic information portal encounters trouble, taxpayers must file electronic tax returns and documents on the following day once the tax authority's electronic information portal resumes operation.

What are the penalties for late submission of VAT declarations in Vietnam?

According to Article 13 of Decree 125/2020/ND-CP, the penalties for late submission of VAT declarations are as follows:

In addition, taxpayers are subjected to remedial measures requiring them to pay the full amount of late tax payment into the state budget if the late filing of tax declarations leads to late tax payment.

Note: The above penalty amounts apply only to organizations.

In the case of taxpayers as households, business households, and individuals, the penalty amount is 1/2 of the penalty amount applicable to organizations.