Instruction on tax registration in case of operating model transformation in Vietnam

Instruction on tax registration in case of operating model transformation in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Instruction on tax registration in case of operating model transformation in Vietnam

Instruction on tax registration in case of operating model transformation in Vietnam according to Article 21 of Circular 105/2020/TT-BTC is as follows:

* Affiliated entity transformed into independent entity or vice versa

- 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 and Article 7of Circular 105/2020/TT-BTC.

- The independent entity or affiliated entity shall, prior to transformation, apply for TIN deactivation to the supervisory tax authority as prescribed in Article 39 of the Law on Tax Administration and Article 14 of Circular 105/2020/TT-BTC.

- According to the application for tax registration filed by the independent entity or affiliated entity, the tax authority shall issue a TIN to the taxpayer as prescribed in Article 34 of the Law on Tax Administration and Article 8 of Circular 105/2020/TT-BTC.

- According to the application for TIN deactivation filed by the independent entity or affiliated entity, the tax authority shall deactivate the TIN as prescribed in Article 39 of the Law on Tax Administration and Articles 15 and 16 of Circular 105/2020/TT-BTC.

* 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 prescribed in Article 39 of the Law on Tax Administration and Article 14 of Circular 105/2020/TT-BTC.

The affiliated entity shall apply for tax registration as prescribed in Articles 31, 32, 33 of the Law on Tax Administration and Article 7 of Circular 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 Circular 105/2020/TT-BTC.

According to the application for tax registration filed by the affiliated entity, the tax authority shall issue a TIN to the taxpayer as prescribed in Article 34 of the Law on Tax Administration and Article 8 of Circular 105/2020/TT-BTC.

- According to the application for TIN deactivation filed by the independent entity, the tax authority shall deactivate the TIN as prescribed in Article 39 of the Law on Tax Administration and Articles 15 and 16 of Circular 105/2020/TT-BTC.

* Affiliated entity of a managing entity transformed into affiliated entity of another managing entity

- If an affiliated entity of a managing entity (hereinafter referred to as the former affiliated entity) is transformed into affiliated entity of another managing entity (hereinafter referred to as the latter affiliated entity), it is required to apply for TIN deactivation of the former affiliated entity to the supervisory tax authority as prescribed in Article 39 of the Law on Tax Administration and Article 14 of Circular 105/2020/TT-BTC.

The latter affiliated entity shall apply for tax registration to the tax authority as prescribed in Articles 31, 32, 33 of the Law on Tax Administration and Article 7 of Circular 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 Circular 105/2020/TT-BTC.

- According to the application for tax registration filed by the latter affiliated entity, the tax authority shall issue a TIN to the taxpayer as prescribed in Article 34 of the Law on Tax Administration and Article 8 of Circular 105/2020/TT-BTC.

According to the application for TIN deactivation filed by the former affiliated entity, the tax authority shall deactivate the TIN as prescribed in Article 39 of the Law on Tax Administration and Articles 15 and 16 of Circular 105/2020/TT-BTC.

2. Taxpayer registration in Vietnam

According to Clause 1, Article 30 of the Law on Tax Administration 2019, taxpayers must apply for taxpayer registration and shall be issued with TINs by tax authorities before beginning their business operations or incurring amounts payable to the state budget. The following entities shall apply for taxpayer registration:

- Enterprises, organizations and/or individuals shall apply for taxpayer registration through the interlinked single-window system together with enterprise, cooperative or business registration as prescribed in the Law on Enterprises and other relevant regulations;

- Organizations and individuals beside those stipulated in Point a of Clause 1, Article 30 of the Law on Tax Administration 2019 shall register directly with tax authorities as regulated by the Minister of Finance.

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