Can a taxpayer in Vietnam apply for APA cancellation?

Can a taxpayer in Vietnam apply for APA cancellation?

According to the provisions of Clause 10, Article 41 of Decree 126/2020/ND-CP on the cancellation of the APA to enterprises having related-party transactions:

Application of advance pricing agreement to enterprises having related-party transactions

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10. APA cancellation

a) The APA may be cancelled in the following cases: the taxpayer or any of the related parties fails to comply with the terms and conditions of the APA; there is a material error in the APA application, annual or ad hoc APA report; the taxpayer fails to provide adequate information and documents in the annual or ad hoc APA reports as requested by the tax authority; the taxpayer and tax authority fails to reach a consensus on revisions to the APA; cancellation of the APA is requested by the other party's tax authority and accepted by the Ministry of Finance; the taxpayer submits a request for cancellation of the APA and provides reasonable explanation.

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Under the regulations, an APA may be canceled in cases where the taxpayer submits a request for cancellation of the APA and provides a reasonable explanation.

Therefore, if there is a reasonable reason, the taxpayer can apply for APA cancellation.

Can a taxpayer in Vietnam apply for APA cancellation? (Image from the Internet)

What are the responsibilities of the General Department of Taxation in Vietnam in case the APA is canceled?

Under the regulations at point b, clause 10, Article 41 of Decree 126/2020/ND-CP on the cancellation of the APA to enterprises having related-party transactions:

Application of advance pricing agreement to enterprises having related-party transactions

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10. APA cancellation

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b) In case the APA is cancelled, General Department of Taxation shall issue a notice of APA cancellation. The notice shall specify the reasons for cancellation and cancellation date. The taxpayer shall fulfill tax obligations mentioned in the cancelled APA in accordance with applicable regulations on tax administration of enterprises having related-party transactions from the cancellation date.

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Therefore, in case the APA is cancelled, General Department of Taxation shall issue a notice of APA cancellation. The notice shall specify the reasons for cancellation and cancellation date.

The taxpayer shall fulfill tax obligations mentioned in the cancelled APA in accordance with applicable regulations on tax administration of enterprises having related-party transactions from the cancellation date.

What are the regulations on confidentiality of information in case the APA is canceled in Vietnam?

Under the regulations in Article 11 of Circular 45/2021/TT-BTC on confidentiality of information:

Confidentiality of information

1. Tax authorities, taxpayers and relevant authorities are responsible for the confidentiality of the information and data used throughout the APA process in accordance with Article 99 of the Law on Tax administration, its guiding documents and relevant tax treaties.

2. Where the APA negotiation is terminated or the APA application is withdrawn, invalidated or revoked, the information and data provided by the taxpayer in the official APA application and provided on request, the APA annual reports and ad hoc reports shall not be used by the tax authority as evidence serving inspection or tax imposition upon the taxpayer.

If the information and data provided by the taxpayer are the information and data publicized by the taxpayer, the tax authority is entitled to use them as basis for determination their tax liabilities.

Therefore, where the APA application is revoked, the information and data provided by the taxpayer in the official APA application and provided on request, the APA annual reports and ad hoc reports shall not be used by the tax authority as evidence serving inspection or tax imposition upon the taxpayer.

Suppose the information and data provided by the taxpayer are the information and data publicized by the taxpayer. In that case, the tax authority is entitled to use them as the basis for determining their tax liabilities.

Under clause 3, Article 41 of Decree 126/2020/ND-CP regulations on the information, data provided by the taxpayer in the APA application are as follows:

- The taxpayer that wishes to apply APA shall submit application form No. 02/APA-CT in Appendix III issued with Decree 126/2020/ND-CPand other documents to the General Department of Taxation in Vietnam.

- In case of bilateral or multilateral APA, submit Form No. 03/APA-MAP in Appendix III issued with Decree 126/2020/ND-CP.

- The taxpayer may consult with the General Department of Taxation in Vietnam before submitting the application by sending Form No. 01/APA-TV in Appendix III issued with Decree 126/2020/ND-CP to the General Department of Taxation.