When converting an operating model, such as converting a dependent unit into an independent unit or vice versa, how is tax registration in accordance with the law in Vietnam? This problem will be answered in the article below.
Article table of contents
Tax registration in case of operating model transformation is specified in Article 21 of the Circular No. 105/2020/TT-BTC on guidelines for tax registration issued by the Minister of Finance of Vietnam, effective from January 17, 2021.
According to this Article, tax registration when operating model transformation is specified as follows:
1. Affiliated entity transformed into independent entity or vice versa
The independent entity or affiliated entity shall, prior to transformation, apply for tax identification number (TIN) deactivation to the supervisory tax authority. An application for requesting TIN deactivation for affiliated entity shall include:
(1) The written request for TIN deactivation in accordance with form No. 24/ĐK-TCT issued together with the Circular No. 105/2020/TT-BTC;
(2) Other relevant documents: Copy of decision or notice of affiliated entity’s operation termination, copy of decision on revocation of certificate of operation registration of affiliated entity issued by the competent authority.
If an affiliated entity receives a decision to transform into an independent entity or vice versa, the affiliated entity shall, following the transformation, apply for tax registration to enable a new TIN to be issued as prescribed in Articles 31, 32, 33 of the Law on Tax Administration of Vietnam and Article 7 of the Circular No. 105/2020/TT-BTC or contact LawNet for support in particular cases.
2. Independent entity transformed into affiliated entity of another managing entity
If an independent entity is transformed into an affiliated entity of another managing entity, it shall be issued with a 13-digit TIN according to the TIN of the new managing entity.
The independent entity shall apply for TIN deactivation to the supervisory tax authority as mentioned above at Section 1. The affiliated entity shall apply for tax registration as prescribed in Articles 31, 32, 33 of the Law on Tax Administration of Vietnam and Article 7 of the Circular No. 105/2020/TT-BTC.
The managing entity shall declare the newly-corporated affiliated entity in the Schedule of affiliated entities, using form No. BK02-DK-TCT hereto appended as prescribed in Article 10 of the Circular No. 105/2020/TT-BTC.
3. Affiliated entity of a managing entity (former affiliated entity) transformed into affiliated entity of another managing entity (later affiliated entity)
If a former affiliated entity is transformed into a later affiliated entity, it is required to apply for TIN deactivation of the former affiliated entity to the supervisory tax authority as mentioned above at Section 1. The managing entity shall declare the newly-corporated affiliated entity in the Schedule of affiliated entities, using form No. BK02-DK-TCT hereto appended as prescribed in Article 10 hereof.
Above are the entire regulations on tax registration when converting the operating model of an organization. To receive support and update the latest legal information on taxes, fees and charges via email, please register here (free).
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- Circular No. 105/2020/TT-BTC
