What regulations shall organization or individual that declares or pays tax on behalf of another taxpayer in Vietnam?

What regulations shall organization or individual that declares or pays tax on behalf of another taxpayer in Vietnam? (Internet image)

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

1. What regulations shall organization or individual that declares or pays tax on behalf of another taxpayer in Vietnam?

According to Clause 5, Article 7 of Decree 126/2020/ND-CP, the organization or individual that declares or pays tax on behalf of another taxpayer shall comply with the same regulations on tax declaration and payment in Decree 126/2020/ND-CP. To be specific:

- Declare and pay tax on behalf of the taxpayer in accordance with tax laws.

- A credit institution or a third party authorized by the credit institution to use the collateral shall declare VAT, corporate income tax and personal income tax on the use of such collateral pending settlement on behalf of the collateral owner (the taxpayer).

- In case of business cooperation between an organization and an individual, tax shall not be directly declared by the individual. The organization shall declare VAT on the whole revenue that is the result of the business cooperation regardless of how the revenue is distributed between the parties, and declare and pay personal income tax on behalf of the individual.

In case of business cooperation between an organization and a household business or individual business defined in Clause 5 Article 51 of the Law on Tax administration who has the same business lines as the organization, both the late payment interest and the individual shall declare tax as per regulations.

- The organization shall declare and pay tax on behalf of individuals who receive dividends in the form of securities; individuals that are existing shareholders that receive bonus in the form of securities; individuals whose stakes are increased due to reinvested profits; individuals contributing real estate, stakes, securities.

Tax shall be declared and pay when the individual transfers the same type of securities, transfers or withdraws capital. To be specific:

+ For individuals who receive dividends in the form of securities and individuals that are existing shareholders that receive bonus in the form of securities, the organization shall declare and pay tax on their behalf on the income from capital investment when they transfer the same type of securities as follows:

For securities traded through stock exchanges, the organization that declares and pays tax on behalf of the individuals shall be the securities company or commercial bank where the individual’s depository account is opened or the fund management company where the individual’s portfolio is registered.

For securities that are not traded through stock exchanges:

++ If the securities belongs to a public company and are registered at a securities depository, the securities company or commercial bank where the individual’s depository account is opened shall declare and pay tax on behalf of the individuals;

++ If the securities do not belong to a public company but the issuer authorizes a joint stock company to manage the list of shareholders, that securities company shall declare and pay tax on behalf of the individuals;

+ For individuals whose stakes are increased due to reinvested profits, the organization to which the individuals contribute capital shall declare and pay tax on their behalf on their income from transfer or withdrawal of capital.

+ For individuals whose contribute real estate, stakes or securities, the organization to which they contribute capital shall declare and pay tax on their behalf on the income from transfer of their real estate, stakes or securities.

+ In case the organization mentioned in Points d.1, d.2 and d.3 Clause 5, Article 7, Decree 126/2020/ND-CP has been dissolved or bankrupt before declaring or pay tax, the individuals shall declare and pay tax themselves.

- The organization that pays bonuses, discounts, subsidies in cash or not in cash to household businesses and individual businesses paying presumptive tax shall declare and pay tax on their behalf as per regulations.

- The organization that leases an individual’s assets shall declare and pay tax on behalf of the individual if so prescribed by the lease contract.

- The real estate buyer shall pay tax on behalf of the seller if so prescribed by the real estate transfer contract (unless tax is exempt, cancelled or deferred); The relevant third party that is permitted to sell an individual’s assets as prescribed by law shall declare and pay tax on behalf of the individual.

- The issuer shall declare and pay tax on behalf of individuals that transfer their shares/stakes when changing the list of limited partners or shareholders if there are no documents proving the individuals have fulfilled their tax obligations.

- The organization assigned to collect fees and charges in accordance with regulations of law on fees and charges shall declare the collected fees and charges with their supervisory tax authorities (except customs fees, goods, luggage and transit charges).

2. What is tax declaration dossier?

According to Clause 1, Article 7 of Decree 126/2020/ND-CP, a tax declaration dossier consists of the tax return and documents that are the basis for determination of the taxpayer’s tax obligations, is prepared and sent by the taxpayer to the tax authority. A tax declaration dossier can be electronic or physical.

The taxpayer shall use the set forms provided by the Minister of Finance and be legally responsible for  the information provided therein; include adequate documents required in the tax declaration dossier.

 For documents without set forms provided by the Ministry of Finance, relevant laws shall apply.

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