Which transactions are proposed for the application of multilateral APA in Vietnam?

Which transactions are proposed for the application of multilateral APA in Vietnam?

The advance pricing agreements (APA) regarding tax calculation methods will be abbreviated as APA.

According to the provisions of Article 3 Circular 45/2021/TT-BTC on transactions proposed for the application of a multilateral APA as follows:

[1] Transactions proposed for the application of APA are controlled transactions stipulated in Clause 2, Article 1 of Decree 132/2020/ND-CP, specifically:

- Controlled transactions within the scope of this Decree include transactions of purchasing, selling, exchanging, leasing, borrowing, lending, transferring, or transferring goods; providing services; lending, financial services, financial guarantees, and other financial instruments; purchasing, selling, exchanging, leasing, borrowing, lending, transferring, or transferring tangible and intangible assets, and agreements for the joint use of resources such as assets, capital, labor, and cost sharing among related parties, excluding business transactions of goods and services under price control by the State as prescribed by the law on prices.

[2] Transactions proposed for the application of APA as stipulated in item [1] must concurrently meet the following conditions:

- The transactions have actually arisen in the production and business activities of the taxpayer and will continue to occur in the proposed APA application period.

- The transactions have a basis to identify the nature of transactions that determine tax liability and have a basis for analyzing, comparing, and selecting independent comparables pursuant to Article 6 Decree 132/2020/ND-CP and Article 7 Decree 132/2020/ND-CP based on information and data complying with the provisions at point b, clause 6, Article 42 Law on Tax Administration 2019.

- The transaction does not fall into cases of tax disputes or complaints.

- The transaction is carried out transparently, not for the purpose of tax evasion or misuse of tax treaties.

Which transactions are proposed for the application of multilateral APA in Vietnam? (Image from the Internet)

Where to submit the application for multilateral APA in Vietnam?

According to the provisions of Clause 3, Article 41 Decree 126/2020/ND-CP on the application of multilateral APA for enterprises with controlled transactions:

Application of the mechanism for advance agreement on the method of determining tax calculation for enterprises with controlled transactions

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3. Taxpayers requesting the application of APA shall submit an official APA application according to Form No. 02/APA-CT in Appendix III issued with this Decree, along with one set of official APA applications to the General Department of Taxation.

In case taxpayers propose bilateral or multilateral APA, taxpayers shall submit a request for bilateral agreement procedures according to Form No. 03/APA-MAP in Appendix III issued with this Decree.

Taxpayers can consult with the General Department of Taxation before submitting the official APA application by submitting a consultation request form according to Form No. 01/APA-TV in Appendix III issued with this Decree to the General Department of Taxation.

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Based on the regulations, taxpayers requesting the application of multilateral APA must submit an official APA application according to Form No. 02/APA-CT in Appendix III issued with Decree 126/2020/ND-CP along with one set of official APA applications to the General Department of Taxation.

In case taxpayers propose the application of multilateral APA, taxpayers shall submit a request for bilateral agreement procedures according to Form No. 03/APA-MAP in Appendix III issued with Decree 126/2020/ND-CP.

Is the application for multilateral APA made in English?

According to the provisions of Article 6 Circular 45/2021/TT-BTC on the application for multilateral APA:

Article 6. applications and Information, Data Used

1. The APA application shall be made following the provisions of Clause 3, Article 41 of Decree No. 126/2020/ND-CP.

The APA application shall be presented in Vietnamese; in case of a bilateral or multilateral APA application, there must be an additional English version. The taxpayer shall stamp to certify and take responsibility for the content of the translation.

For bilateral or multilateral APA applications, the taxpayer shall be responsible for the consistency of the content between the dossier submitted to the Vietnamese tax authority and the dossier submitted by the related party within the scope of the APA application to the tax authority partner.

2. The information, data, and database used must comply with the provisions in point b, clause 6, Article 42 of the Law on Tax Administration and Article 17 of Decree No. 132/2020/ND-CP.

According to the above regulations, the APA application shall be presented in Vietnamese; in case of a multilateral APA application, there must be an additional English version. The taxpayer shall stamp to certify and take responsibility for the content of the translation.