Decree 68/2020/ND-CP amending and supplementing Decree 20/2017/ND-CP on tax administration for enterprises with associated transactions

Recipients:
- Party Central Committee Secretariat;
- Prime Minister, Deputy Prime Ministers;
- Ministries, ministerial-level agencies and government-attached agencies;
- People's Councils, People's Committees of provinces and centrally-run cities;
- Central Office and Party Committees;
- Office of the General Secretary;
- Office of the President;
- National Council and Committees of the National Assembly;
- Congress office;
- Supreme People's Court;
- People's Procuratorate of the Supreme;
- State Audit;
- National Financial Supervisory Committee;
- Bank for Social Policy;
- Vietnam Development Bank;
- Vietnam Fatherland Front Central Committee;
- Central agency of unions;
- VPCP: Chairman, Deputy Chairmen, TT Assistant, General Director of the Portal, departments, agencies, units, Official Gazette;
- Archive: Administrative files, KTTH (2)

TM. GOVERMENT
PRIME MINISTER




Nguyen Xuan Phuc

Sample number 01

Information on affiliate relations and affiliate transactions

STT

Name of the affiliate

Countries

Tax code

Affiliate relationship form¹

(1)

(2)

(3)

(4)

A

B

C

D

Đ

E

G

H

I

K

1

2

3

...

STT

Exemption case

Subject to exemption²

(1)

(2)

(3)

1

Exemption from declaring and determining transaction prices associated with items III and IV below

Taxpayers only make transactions with affiliated parties that pay corporate income tax in Vietnam, apply the same corporate income tax rate to taxpayers and neither party is entitled to tax incentives Enterprise income in taxation period

2

No fee for setting up the linked transaction price determination file

a

Taxpayers have associated transactions but the total revenue generated in the tax period is less than VND28 billion and the total value of all related transactions arising in the tax period is less than VND28 billion.

b

Taxpayers who have signed a prior agreement on price determination methods shall submit annual reports according to the provisions of the law on the previous agreement on method of determining prices.

c

Taxpayers conduct business with a simple function, without any revenue, expenses from activities of exploiting and using intangible assets, having turnover below VND8,000 billion, applying the net profit rate before interest and corporate income tax on revenue, including the following areas:

Distribution: From 5% or more

Production: From 10% or more

- Processing: From 15% or more

STT

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Value sold to affiliates

Purchase value for affiliates

Profit increased due to redefinition of independent transaction prices

Collecting, paying on behalf of, and allocating permanent establishments³

Transactions covered by APA⁴

Recorded value of affiliate transaction

The value is redefined according to the independent transaction price

Difference

Method of determining prices

Recorded value of affiliate transaction

Value determined by independent transaction price

Difference

Method of determining prices

(1)

(2)

(3)

(4)

(5) = (4) - (3)

(6)

(7)

(8)

(9) = (8) - (7)

(10)

(11) = (5) + (9)

(12)

(13)

I

Total transaction value arising from business activities

II

Total transaction value arising from affiliate activities

1

Goods

1.1

Commodities form fixed assets

a

Associated party A

b

Associated party B

...

1.2

Goods do not form fixed assets

a

Associated party A

b

Associated party B

...

2

Our Services

2.1

Research and Development

a

Associated party A

b

Associated party B

...

2.2

Advertising, marketing

a

Associated party A

b

Associated party B

...

2.3

Business management and consulting, training

a

Associated party A

b

Associated party B

...

2.4

Financial activities

2.4.1

Copyright fees and the like

A

Associated party A

B

Associated party B

...

2.4.2

Interest

A

Associated party A

B

Associated party B

...

2.5

Other services

A

Associated party A

B

Associated party B

...

Taxpayers have signed prior agreement on tax calculation method (APA)

Yes

No

STT

Targets

Value of linked transactions

Transaction value with independent parties

Total value arising from business activities in the period

Values ​​are determined according to the linked transaction price determination dossiers

Value determines the price according to APA

(1)

(2)

(3)

(4)

(5)

(6) = (3) + (4) + (5)

1

Revenue from sales and service provision

In which: - Sales of goods and services for export

2

The deduction from revenue

3

Net revenue from selling goods and providing services (3)=(1)-(2)

4

Cost of goods sold

5

Gross profit from sales and service provision (5)=(3)-(4)

6

Cost of sales

7

Enterprise Cost Management

8

Revenue from financial activities

8.1

In which: – Deposit interest and loan interest

9

Financial expenses

9.1

In which: interest expenses

10

Depreciation expense incurred during the period

11

Net profit from business activities in the period (11)=(5)-(6)-(7)+(8)-(9)

12

Net profit from business activities in the period excluding the difference between revenue and expenses of financial activities (12)=(11)-(8)+(9)

13

Total net profit from operating activities plus interest expense (after deducting deposit and loan interest) for the period plus depreciation expense for the period (13)=(11)+(9.1)-(8.1) +(10)

14

Ratio of interest expense (after deducting deposit and lending interest) incurred during the period to total net profit from business activities plus interest expense (after deducting deposit and lending interest) in period plus depreciation expense for the period (14)=((9.1)-(8.1))/(13)

15

Interest expense of previous periods carried forward

15a

In which: – Interest expense (after deducting deposit interest and loan interest) from year (n-1) to tax period (n)

15b

– Interest expense (after deducting deposit interest and lending interest) carried forward from year (n-2) to tax period (n).

15c

– Interest expense (after deducting deposit interest and lending interest) carried forward from year (n-3) to tax period (n).

15d

– Interest expense (after deducting deposit interest and lending interest) carried forward from year (n-4) to tax period (n).

15 VNĐ

– Interest expense (after deducting deposit interest and lending interest) carried forward from year (n-5) to tax period (n).

15e

– Interest expense (after deducting deposit interest and loan interest) of previous periods is carried forward to the next period (n+1)

16

Ratio of interest expense (after deducting deposit and lending interest) incurred to total net operating profit plus interest expense (after deducting deposit and lending interest) during the plus period depreciation expense for the period (16)=(9.1)-(8.1)+(15a)+(15b)+(15c)+(16d)+(15d)))/(13)

17

Rate of return used to determine the price of associated transactions

a

- Rates ………………………………..

b

- Rates …………………………………

c

– …………………….

Taxpayers have signed prior agreement on tax calculation method (APA)

Yes

No

STT

Targets

Value of linked transactions

Transaction value with independent parties

Total value arising from business activities in the period

Values ​​are determined according to the linked transaction price determination dossiers

Value determines the price according to APA

(1)

(2)

(3)

(4)

(5)

(6) = (3) + (4) + (5)

1

Interest income and similar income

2

Interest payments and similar expenses

3

Net interest income

4

Income from service activities

5

Service operation costs

6

Net gain / loss from service activities

7

Net gain / loss from foreign exchange trading

8

Net gain / loss from trading securities

9

Net gain / loss from trading securities investment

10

Income from other activities

11

Other operating costs

12

Net gain / loss from other activities

13

Income from capital contribution, share purchase

14

Operating costs

15

Provision for credit losses

16

Total profit before tax

17

Net profit from production and business activities (17 = 16-12)

18

Rate of return used to determine the price of associated transactions

a

Rates ……………………..

b

Rates ………………………

c

.......................................

Taxpayers have signed prior agreement on tax calculation method (APA)

Yes

No

STT

Targets

Value of linked transactions

Transaction value with independent parties

Total value arising from business activities in the period

Values ​​are determined according to the linked transaction price determination dossiers

Value determines the price according to APA

(1)

(2)

(3)

(4)

(5)

(6) = (3) + (4) + (5)

1

Revenues from service provision for customers and self-dealing.

a

Collect securities brokerage service fee

b

Collect portfolio management fees

c

Collect guarantee fees and issuing agency fees

đ

Collecting financial advisory and securities investment fees

đ

Collect securities investment fund management fees and bonuses for fund management companies

e

Revenues from the issuance of fund certificates

g

Remuneration for the board of directors received by participating in the board of other companies

h

Differences in securities prices sold during the period, bond interests collected from self-trading activities of securities companies, financial investment activities of fund management companies

h1

In which: – Interest income: Including: interest on bonds, interest on bank deposits, interest on certificates of deposit

i

Other revenues in accordance with the law on providing services to customers and self-dealing

i1

In which: – Interest income from margin loans and advances from securities sales, deferred securities sales interest

2

Costs to provide service to customers and expenses for self-employment.

a

Payment of fees for securities trading center members (for companies being members of the Securities Trading Center)

b

Securities custody expenses and securities transaction fees at the Securities Trading Center

c

Securities listing and registration fee (for companies issuing listed securities at the Securities Trading Center)

d

Expenses related to the management of investment funds and portfolios

đ

Cost of raising capital for investment fund

e

Loan interest payment

g

Remuneration for the board of directors

h

Payment of payable taxes, fees and charges related to business activities

i

Expenses for management and public service activities, expenses for employees

k

Expenses for depreciation of fixed assets and other assets

k1

Expenses for fixed asset depreciation

k2

Other expenses on assets

l

Deductions for self-trading securities price decrease reserves

m

Other expenses in accordance with the law on providing services to customers and self-dealing

3

Profit (loss) from providing services to customers and self-trading activities.

4

Other income other than providing services to customers and self-employed

5

Other costs other than providing services to customers and self-employed

6

Other profits (losses) other than providing services to customers and proprietary trading.

7

Total accounting profit before corporate income tax.

8

Net profit from production and business activities

9

Net profit from business activities does not include the difference of income from interest, interest income from margin loans and advances from securities sales, deferred interest from securities sales and loan interest payments.

10

Total net profit from business activities plus interest expense (after deducting deposit interest and loan interest) for the period plus depreciation expense for the period (10)=(8)+(2e)-(1h1) -(1i1)+(2k1)

11

Ratio of interest expense (after deducting deposit and lending interest) incurred during the period to total net profit from business activities plus interest expense (after deducting deposit and lending interest) in period plus depreciation expense in period (12) = ((2e)-(1h1)-(1i1)/(10)

12

Interest expense of previous periods is carried over. (12)=(12a)+(12b)+(12c)+(12d)+(12pt)

In which:

12a

– Interest expense (after deducting deposit interest and loan interest) from year (n-1) to tax period (n)

12b

– Interest expense (after deducting deposit interest and loan interest) from year (n-2) to tax period (n)

12c

– Interest expense (after deducting deposit interest and loan interest) from year (n-3) to tax period (n)

12d

– Interest expense (after deducting deposit interest and loan interest) from year (n-4) to tax period (n)

12 VNĐ

– Interest expense (after deducting deposit interest and loan interest) from year (n-5) to tax period (n)

12e

– Interest expense (after deducting deposit interest and loan interest) of previous periods is carried over to the next period

13

Ratio of interest expense (after deducting deposit interest and lending interest) incurred in the period plus interest expense of previous periods carried forward to the tax period (n) to total net profit from business activities revenue plus interest expense (after deducting deposit interest and loan interest) plus depreciation expense incurred in the period of the taxpayer (13) = ((2e)-(1h1)-(1i1)+ (12 ))/(ten)

14

Rate of return used to determine the price of associated transactions

a

Rates …………………………

b

Rates …………………………

c

........................................

TAX AGENCY STAFF

First and last name: ……………………………….
Practicing certificate number: …………….

……………, day month Year ………….
TAXPAYER or
LEGAL REPRESENTATIVE OF TAX PAYERS
(Signature, full name, position and seal (if any))