What is Form 02/HTQT - Application for tax deduction under Double Taxation Agreements in Vietnam?

Who is eligible for tax deduction under Double Taxation Agreements in Vietnam?

Pursuant to Article 62 of Circular 80/2021/TT-BTC, the subjects eligible for deduction of taxes under Double Taxation Agreements in Vietnam are organizations and individuals who meet the following conditions:

- Subjects residing in Vietnam;

- Have paid taxes in a country that has a tax agreement with Vietnam;

- The amount of tax paid is in accordance with the foreign law and tax agreement regulations.

Form 02/HTQT - Application for tax deduction under Double Taxation Agreements in Vietnam (Image from Internet)

What is Form 02/HTQT - Application for tax deduction under Double Taxation Agreements in Vietnam?

Based on Clause 3, Article 62 of Circular 80/2021/TT-BTC, it is regulated as follows:

Procedure for tax exemption and reduction under the Double Taxation Avoidance Agreement (Tax Agreement)

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3. Deduction of taxes under Double Taxation Agreements in Vietnam

Organizations and individuals who are subjects residing in Vietnam, have paid taxes in a country that has a tax agreement with Vietnam, and the paid taxes are in accordance with the foreign law and tax agreement regulations, shall be entitled to deduct the taxes paid (or deemed to have been paid) in the country that signed the tax agreement with Vietnam against taxes payable in Vietnam. The procedure for deducting taxes under Double Taxation Agreements in Vietnam is as follows:

a) The taxpayer shall send a dossier requesting the deduction of taxes paid (or deemed to have been paid) abroad against taxes payable in Vietnam to the directly managing tax authority. The dossier includes:

a.1) A request for deduction of foreign taxes against taxes payable in Vietnam under the tax agreement, according to Form No. 02/HTQT issued together with Appendix I of this Circular, providing information on transactions related to the foreign tax requested for deduction against the taxes payable in Vietnam within the scope of the tax agreement.

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Thus, the request form for the deduction of taxes under Double Taxation Agreements in Vietnam under the tax agreement is regulated according to Form No. 02/HTQT in Appendix 1 issued together with Circular 80/2021/TT-BTC. To be specific:

Download Form 02/HTQT, Request for tax deduction under Double Taxation Agreements in Vietnam: here

How long is the processing time for the deduction of taxes under Double Taxation Agreements in Vietnam?

Pursuant to Clause 3, Article 62 of Circular 80/2021/TT-BTC, it is regulated as follows:

Procedure for tax exemption and reduction under the Double Taxation Avoidance Agreement (Tax Agreement)

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3. Deduction of taxes under Double Taxation Agreements in Vietnam

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a.2.3.3) A copy of the tax withholding declaration for dividends with confirmation from the taxpayer;

a.2.3.4) Confirmation from the foreign tax authority on the amount of tax paid on dividends and the amount of corporate income tax paid before distributing dividends.

a.3) Power of attorney in case the taxpayer authorizes a legal representative to perform the procedure for applying the tax agreement.

b) The tax authority shall base on the dossier to review and resolve the taxes paid abroad that are deductible against the taxes payable in Vietnam according to the tax agreement and the guidelines of this Circular within 10 working days from the date of receiving the complete dossier specified at point a of this clause. The 10 working days do not include the time for supplementing and explaining the dossier.

4. Request for application of the Mutual Agreement Procedure under the Double Taxation Avoidance Agreement

a) The taxpayer who is a resident of Vietnam requests the mutual agreement procedure with the Vietnamese tax authority when they find that the resolution by the foreign tax authority results in or will result in the taxpayer having to pay tax not in accordance with the tax agreement. The taxpayer who is a resident of another country requests the mutual agreement procedure with the foreign tax authority where the taxpayer resides.

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Thus, within 10 working days from the date of receiving the complete dossier, the tax authority is responsible for reviewing and resolving the taxes paid abroad that are deductible against the taxes payable in Vietnam.

The 10 working days do not include the time for supplementing and explaining the dossier.