Shall overseas suppliers declare taxes monthly or quarterly in Vietnam?

Shall an overseas supplier declare taxes monthly or quarterly in Vietnam?

Based on Point a, Clause 1, Article 77 of Circular 80/2021/TT-BTC regarding tax declaration and direct tax computation for overseas suppliers as follows:

Tax declaration and direct tax computation of overseas suppliers

1. Overseas suppliers shall directly declare taxes at the electronic portal of the General Department of Taxation, using an electronic transaction authentication code issued by the tax authority through the General Department of Taxation’s electronic portal, and submit electronic tax declaration dossiers to the managing tax authority, as follows:

a) Overseas suppliers declare taxes quarterly.

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

c) Overseas suppliers pay value-added tax and corporate income tax calculated on a proportional revenue basis.

c.1) Revenue subject to value-added tax is the revenue received by the overseas supplier.

c.2) Revenue subject to corporate income tax is the revenue received by the overseas supplier.

d) Percentage for calculating value-added tax on revenue as stipulated in Point b, Clause 2, Article 8 of Decree No. 209/2013/ND-CP dated December 18, 2013, of the Government of Vietnam detailing and guiding the implementation of some articles of the Law on Value-Added Tax.

dd) Percentage for calculating corporate income tax on revenue as stipulated in Clause 3, Article 11 of Decree No. 218/2013/ND-CP dated December 26, 2013, of the Government of Vietnam detailing and guiding the implementation of the Law on Corporate Income Tax.

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From the above regulations, it can be noted that overseas suppliers declare taxes quarterly.

Shall an overseas supplier declare taxes monthly or quarterly in Vietnam? (Image from the Internet)

What are the principles for determination of revenue subject to tax in Vietnam for the tax declaration and calculation of an overseas supplier?

Based on Clause 3, Article 77 of Circular 80/2021/TT-BTC, the principles for determination of revenue subject to tax in Vietnam for the tax declaration and calculation of an overseas supplier are as follows:

- The types of information used to identify transactions of organizations or individuals purchasing goods and services arising in Vietnam include:

+ Payment information related to organizations or individuals in Vietnam, such as credit card information based on bank identification number (BIN), bank account information, or similar information that organizations or individuals use for payment to an overseas supplier.

+ Information about the residence status of the organization (individual) in Vietnam, such as billing address, shipping address, home address, or similar information declared by organizations (individuals) purchasing goods to an overseas supplier.

+ Information about the access of organizations (individuals) in Vietnam, such as the country telephone code information of the SIM card, IP address, fixed-line location, or similar information of purchasing organizations, individuals.

- When determining a transaction occurring in Vietnam for tax declaration and computation, the overseas supplier shall proceed as follows:

+ Use two non-conflicting pieces of information, including one payment-related information of the organization (individual) in Vietnam and one residence status-related information or access-related information of the organization, individual in Vietnam mentioned above.

+ In cases where payment information of the organization, individual cannot be collected or conflicts with remaining information, the overseas supplier is permitted to use two non-conflicting pieces of information, including one residence status-related information and one access-related information of the organization, individual in Vietnam.

What are the responsibilities of the tax authority regarding the services provided by overseas suppliers in Vietnam?

According to Article 80 of Circular 80/2021/TT-BTC, the responsibilities of the tax authority in managing the business activities performed by overseas suppliers are as follows:

- The General Department of Taxation is the managing tax authority directly responsible for overseas suppliers, responsible for issuing tax codes to overseas suppliers as regulated, receiving tax declarations, and performing tasks related to tax declaration and payment of overseas suppliers.

- Update the list of overseas suppliers who directly or authoritatively register and declare taxes on the General Department of Taxation’s electronic portal.

- Coordinate with relevant agencies to identify and publish the name, website address of overseas suppliers that have not registered, declared, or paid taxes but have transactions occurring in Vietnam.

- Tax authorities in Vietnam have the right to cooperate with foreign tax authorities to exchange, urge overseas suppliers to declare and pay taxes; collect tax arrears from overseas suppliers if it is proven that the overseas supplier has incorrectly declared or paid taxes; cooperate with competent authorities to implement measures according to the law for cases where overseas suppliers do not comply with tax obligations in Vietnam.