May overseas suppliers authorize tax payment in Vietnam?

Which entities are overseas suppliers in Vietnam?

Pursuant to Clause 1, Article 73 of Circular 80/2021/TT-BTC stipulates as follows:

Organizations, individuals involved in tax management for e-commerce business activities, digital platform-based business, and other services of overseas suppliers without a permanent establishment in Vietnam

1. Overseas suppliers without a permanent establishment in Vietnam engaged in e-commerce business, business based on digital platforms, and other services with organizations, individuals in Vietnam (hereinafter referred to as overseas suppliers).

2. Organizations, individuals in Vietnam purchasing goods, services from overseas suppliers.

3. Organizations, tax agents operating under Vietnamese law authorized by overseas suppliers to perform taxpayer registration, file tax, and pay tax in Vietnam.

4. Commercial banks, organizations providing intermediary payment services, and organizations, individuals having rights and obligations related to e-commerce business activities, business based on digital platforms, and other services of overseas suppliers.

Thus, it can be understood that overseas suppliers are those not having a permanent establishment in Vietnam but are involved in e-commerce business, business based on digital platforms, and other services with organizations, individuals in Vietnam.

May overseas suppliers authorize tax payment in Vietnam? (Image from Internet)

May overseas suppliers authorize tax payment in Vietnam?

According to Clause 1, Article 79 of Circular 80/2021/TT-BTC stipulating the authorization for tax payment of overseas suppliers as follows:

Authorization for taxpayer registration, filing tax, paying tax in Vietnam by overseas suppliers

1. In case overseas suppliers authorize organizations, tax agents operating under Vietnamese law (hereinafter referred to as the authorized party), the authorized party is responsible for carrying out tax procedures (taxpayer registration, filing, paying tax) as per the contract signed with the overseas supplier. Based on the scope of authorization, the responsibility of each party as stipulated in the authorization contract, the authorized party carries out the equivalent tax procedures as prescribed in Articles 76, 77, and 78 of this Circular for overseas suppliers.

2. In cases where overseas suppliers have directly registered, filed, and paid tax in Vietnam and then switch to authorizing organizations, tax agents for tax filing and payment, the overseas supplier must notify the directly managing tax authority at least 5 working days before the authorization contract comes into effect by changing the information according to form No. 01-1/NCCNN attached to Appendix I of this Circular and send along with relevant documents.

a) The overseas supplier is responsible for providing full and accurate documents, records, materials, and necessary information related to tax procedures as per the contract signed between the two parties.

b) In case the overseas supplier enters into an authorization contract with a tax agent, the legal representative of the tax agent shall sign and seal on behalf of the lawful representative of the taxpayer on documents and transaction records with the tax authority. The tax declaration must fully state the name and professional certificate number of the tax agent’s staff. Documents and transaction records that the tax agent carries out are only within the scope of tax procedure tasks authorized as stated in the tax procedure service contract signed.

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From the above stipulations, it can be seen that overseas suppliers have the right to authorize tax payment in Vietnam. However, overseas suppliers can only authorize organizations, tax agents operating under Vietnamese law, and the authorized party is responsible for performing tax procedures (taxpayer registration, filing, paying tax) according to the contract signed with the overseas suppliers based on the scope of authority, and the responsibility of each party as regulated in the authorization contract in conformity with the law.

What is the VAT payment method for overseas suppliers in Vietnam?

Based on point c, clause 1, Article 77 of Circular 80/2021/TT-BTC stipulates as follows:

Direct tax declaration and calculation by overseas suppliers

1. Overseas suppliers directly declare tax at the electronic portal of the General Department of Taxation, use electronic transaction authentication codes issued by the tax management agency through the General Department of Taxation’s electronic portal, and submit electronic tax declaration dossiers to the direct managing tax authority, as follows:

a) Tax declaration for overseas suppliers is of the type that declares and pays quarterly.

b) Electronic tax declaration form according to form No. 02/NCCNN issued with Appendix I of this Circular.

c) Overseas suppliers pay value added tax, corporate income tax based on the revenue ratio method.

c.1) The revenue for value added tax calculation is the revenue that overseas suppliers receive.

c.2) The revenue for corporate income tax calculation is the revenue that overseas suppliers receive.

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Thus, overseas suppliers pay value added tax based on the revenue ratio method.