Effective February 05, 2014, which transactions are permitted to apply the APA?

According to current regulations, an APA is a written agreement between the tax authority and the taxpayer or between the tax authority, the taxpayer, and the tax authorities of countries or territories with which Vietnam has signed a tax treaty for a specified period. It specifies the tax bases, the method for determining the taxable value, or the taxable value according to market prices. The APA is established before the taxpayer submits the corporate income tax return.

Illustrative image (source: internet)

According to Clause 4, Article 3 of Circular 201/2013/TT-BTC, from February 05, 2014, transactions eligible for APA application include purchase, sale, exchange, lease, sublease, transfer, or disposal of goods and services during business operations (collectively referred to as business transactions) between related parties, except for business transactions related to goods and services subject to price stabilization under state management according to the provisions of the law on pricing.

Additionally, taxpayers have the right to propose one or multiple related transactions for APA application. Taxpayers can combine multiple interdependent related transactions into a comprehensive transaction to objectively reflect business practices corresponding to the functions, assets, and business risks related to tax obligations according to the tax return period in compliance with the legal regulations on determining market prices in business transactions between related parties for tax declaration purposes.

For additional regulations, refer to Circular 201/2013/TT-BTC, effective from February 05, 2014.

Thu Ba

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