What is APA? What regulations must the application of APA in Vietnam comply with?

What is APA in Vietnam?

Under the provisions in Clause 1, Article 41 of Decree 126/2020/ND-CP:

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

1. Taxpayers that pay corporate income tax by declaration and have related-party transactions may propose application of advance pricing agreement (APA).

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Thus, APA can be understood as the advance pricing agreement for the determination of taxable prices.

What regulations must the application of APA in Vietnam comply with?

Under the provisions in Clause 2, Article 41 of Decree 126/2020/ND-CP on the application of advance pricing agreement to enterprises having related-party transactions:

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

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2. The application of APA shall comply with Clause 6 Article 42 of the Law on Tax Administration.

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Thus, the application of APA must ensure compliance with the provisions of Clause 6, Article 42 of Law on Tax Administration 2019 on the pules for declaring tax with predetermined taxable price calculation method:

- Predetermined taxable price calculation methods shall be applied on the basis of request of the taxpayers, consensus between the tax authorities and the taxpayer under unilateral, bilateral and multilateral agreements between tax authorities, taxpayers and tax authorities of relevant countries or territories;

- Predetermined taxable price calculation methods shall be applied according to information provided by the taxpayers and legally verified commercial database;

- Application of predetermined taxable price calculation methods is subject to approval by the Minister of Finance. Regulations of law on international treaties and international agreements shall apply to bilateral and multilateral agreements participated in by foreign tax authorities.

What is APA? What regulations must the application of APA in Vietnam comply with? (Image from the Internet)

Which authority receives the application form for the application of APA submitted by taxpayers in Vietnam?

Under the provisions in Clause 1 and Clause 3, Article 41 of Decree 126/2020/ND-CP on the application of advance pricing agreement to enterprises having related-party transactions:

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

1. Taxpayers that pay corporate income tax by declaration and have related-party transactions may propose application of advance pricing agreement (APA).

...

3. The taxpayer that wishes to apply APA shall submit application form No. 02/APA-CT in Appendix III hereof and other documents to General Department of Taxation.

In case of bilateral or multilateral APA, submit Form No. 03/APA-MAP in Appendix III hereof.

The taxpayer may consult with General Department of Taxation before submitting the application by sending Form No. 01/APA-TV in Appendix III hereof to General Department of Taxation.

Under the provisions, taxpayers that pay corporate income tax by declaration and have related-party transactions may propose the application of an advance pricing agreement (APA).

The applicants shall submit the application form for the application of APA using Form No. 02/APA-CT in Appendix III issued together with Decree 126/2020/ND-CP and other documents to the General Department of Taxation in Vietnam.

* Note:

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

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