If a company headquartered in Hanoi has a newly established investment project in a provincial branch, does the branch have to pay VAT?
- What are the guidelines on tax refund regulations for newly established businesses in Vietnam?
- What are the guidelines on VAT refund for investment projects in Vietnam?
- If a company with its head office in Hanoi has a new investment project and establishes a branch in the province, does the branch have to pay VAT?
What are the guidelines on tax refund regulations for newly established businesses in Vietnam?
According to Official Letter 30151/CTHN-TTHT in 2022, guiding the procedures for VAT refund for investment projects issued by the Hanoi Tax Department as follows:
- Newly established business from investment projects already registered for business, registered to pay VAT by the deduction method, or projects of prospecting, exploration and development of oil and gas fields in the process of development. If the investment period has not yet been put into operation, if the investment period is 01 year or more, the VAT on goods and services used for investment will be refunded annually, except for the case guided at Point c, Clause 3 of this Article.
- In case, if the accumulated VAT amount of goods and services purchased and used for investment is VND 300 million or more, the VAT will be refunded.
If a company headquartered in Hanoi has a newly established investment project in a provincial branch, does the branch have to pay VAT? (Image from the internet)
What are the guidelines on VAT refund for investment projects in Vietnam?
According to Official Letter 30151/CTHN-TTHT in 2022, guiding the procedures for VAT refund for investment projects issued by the Hanoi Tax Department as follows:
Pursuant to Clause 3, Article 1 of Circular 130/2016/TT-BTC amending and supplementing a number of articles of Circular No. 219/2013/TT-BTC guiding the implementation of the Law on VAT and Decree 209/2013 /ND-CP detailing and guiding the implementation of a number of articles of the Law on VAT (amended and supplemented according to Circular 119/2014/TT-BTC, Circular 151/2014/TT-CP) BTC and Circular 26/2015/TT-BTC:
"3. VAT refund for investment projects
…
b) In case an operating business establishment that is subject to VAT by the deduction method has a new investment project (except for the case guided at Point c, Clause 3 of this Article, and excluding investment projects of building houses for sale or lease without forming fixed assets) in a province or centrally run city other than the province or city where the head office is located, is in the investment stage and has not yet been put into operation; If the business has not yet registered for business or tax registration, the business establishment shall make a separate tax declaration for the investment project and at the same time must transfer the input value added tax of the investment project to offset the declaration VAT of production and business activities being carried out, the amount of VAT transferred from an investment project is up to equal to the payable VAT amount of production and business activities in the period of the business establishment.
After clearing, if the input VAT amount of the new investment project that has not been fully deducted is 300 million VND or more, the VAT will be refunded for the investment project.
After clearing, if the input VAT amount of the new investment project that has not yet been fully deducted is less than VND 300 million, it will be transferred to the input VAT amount of the investment project of the next declaration period.
In case a business establishment has a decision to establish project management boards or branches located in provinces and centrally run cities other than the province or city where the head office is located to act on behalf of taxpayers directly manage one or more investment projects in many localities; Project Management Boards, branches have seals in accordance with the law, keep books and documents in accordance with the provisions of law on accounting, have accounts at banks, have tax registration and are granted tax codes. tax amount, the project management board, branch must make a separate tax declaration and refund dossier with the local tax authority where the tax is registered. When the investment project to establish an enterprise has been completed and the procedures for business registration and tax payment have been completed, the business establishment that is the owner of the investment project must sum up the VAT amount generated. birth, the refunded VAT amount and the un-refundable VAT amount of the project to be handed over to the newly established enterprise for the new enterprise to declare and pay tax.
Investment projects eligible for VAT refund under Clauses 2 and 3 of this Article are investment projects in accordance with the law on investment…”
If a company with its head office in Hanoi has a new investment project and establishes a branch in the province, does the branch have to pay VAT?
According to Official Letter 30151/CTHN-TTHT in 2022, guiding the procedures for VAT refund for investment projects issued by the Hanoi Tax Department as follows:
- Pursuant to the above provisions, if the Company (headquartered in Hanoi) is subject to VAT by the deduction method, has a new investment project, has a decision to establish a branch to close in Dong Nai province (different from where the head office is located) in order to directly manage investment projects on behalf of the Company in the locality, the branch must make a separate tax return and refund dossier with the local tax office where the tax is registered.
- When the investment project to establish an enterprise has been completed and the procedures for business registration and tax payment have been completed, the Company must sum up the amount of VAT incurred, the amount of VAT The increase has been refunded, the VAT amount that has not been refunded of the project to be handed over to the newly established branch for tax declaration and payment in accordance with the provisions of Point b, Clause 3, Article 1 of Circular No. 130/2016/ TT-BTC of the Ministry of Finance.
- Suggest that the Company base on the actual situation and compare with legal documents on tax to comply with regulations.
- In the process of implementing tax policy, in case there are still problems, the Company can refer to the guiding documents of the Hanoi Tax Department posted on the website http://hanoi.gdt.gov.vn or contact the Department of Inspection - Inspection No. 1 for assistance in resolving.
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