Chương IV Nghị định 132/2020/NĐ-CP: Điều khoản thi hành

Chapter IV

IMPLEMENTATION PROVISIONS

Article 20. Responsibility and authority of tax authorities for management of transfer prices

1. Apply the risk management for the tax administration of transfer prices under regulations of laws.

a) Managing and using information of taxpayers engaged in related party transactions for risk management purposes;

b) Apply the risk management for the planning of inspection and examination of enterprises having interrelationships and related party transactions;

c) Manage and use Country-by-Country reports of profits of taxpayers for the risk management and communication tasks under regulations and commitments of Vietnam under international taxation agreements, not for tax imposition purposes.

2. Tax authorities shall consult the comparability analysis principles, transfer pricing principles and methods referred to herein as well as information about tax obligations of enterprises engaged in related party transactions in order to carry out tax imposition in the following cases:

a) If taxpayers violate laws on taxation but fully comply with accounting, invoicing and evidencing documentation regulations, setting thresholds of their sales, costs or taxable income for the purpose of determination of tax obligations shall conform to comparability analysis principles, transfer pricing methods and databases used for management of prices of related-party transactions as prescribed by this Decree;

b) In other cases, they shall be subject to clause 2 of Article 50 in the Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019;

c) Tax authorities shall be responsible for enabling taxpayers to present their evidence and explanation about data and figures of independent comparables used in transfer pricing files.

3. Tax authorities shall be vested with authority to set the levels of price, profit margins or profit split ratios; levels of taxable income or corporate income tax payable for any taxpayer failing to comply with transfer pricing declaration or determination requirements; failing to provide or incompletely provide data and information provided for the purpose of determination of prices of related party transaction in the following cases:

a) Taxpayers do not provide or insufficiently provide information or do not submit the Form given in the Appendix I hereto;

b) Taxpayers provide insufficient information required in the transfer pricing files referred to in the Appendix II and III to this Decree, or do not present the transfer pricing files and data, evidencing documents and records used as the basis for comparability analysis and determination of prices in the transfer pricing files at the tax authority’s request within the time limits prescribed herein. Information included in the transfer pricing file that is proved material or substantial if such information has impacts on results of analyses for selection of independent comparables, transfer pricing methods or results of adjustments for levels of price, profit margin and profit split ratios of taxpayers;

c) Taxpayers use inaccurate or unrealistic information about arm’s length transactions for comparability analyses, declaration and determination of the transfer prices, or rely on data, evidencing documents and records which are illegitimate, invalid or are of unclear origin to determine levels of price, profit margins or profit split ratios applicable to related-party transactions;

d) Taxpayers commits any violation against transfer pricing regulations set forth in Article 19 hereof;

dd) Databases used for tax imposition purposes must be subject to regulations laid down in the Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019.

4. Tax authorities shall be responsible for securing information provided by taxpayers relating to the transfer pricing in accordance with the provisions laid down herein. Provision of information to other entities or organizations shall be subject to clause 5 of this Article.

5. In case where there is any issue relating to policies or regulations concerning industries and specialized sectors after transfer pricing inspections, examinations or audits, tax authorities shall collect opinions or feedbacks from entities, organizations or individuals involved, specifically including:

a) Sectoral regulatory authorities, specialized organizations or associations;

b) Tax authorities shall be responsible for providing dossiers, information and documents or records relating to the transfer pricing for specialized entities or organizations asked to give their opinions. Entities or units asked to give opinions shall be responsible for securing information in accordance with laws and regulations.

6. Tax authorities shall exchange information with taxpayers and counterparty tax authorities according to the consultation procedures implemented prior to, during and after the transfer pricing inspections, examinations or audits as follows:

a) Where, through the application of risk management measures to the tax administration of prices of related-party transactions, tax authorities find it necessary to exchange information with taxpayers about the Appendix I to this Decree and the transfer pricing files of taxpayers, tax authorities shall send written requests for consultation with taxpayers in order to exchange and provide in advance information about the transfer pricing files of taxpayers in accordance with provisions set forth in this Decree;

b) Where tax authorities need to contact or discuss with counterparty tax authorities about Country-by-Country reports of profits and other relevant information under the provisions of terms and conditions regarding bilateral agreement procedures and information exchange under the relevant tax treaties. Where necessary, tax authorities shall notify taxpayers in writing of the temporary suspension of the transfer pricing inspections, examinations or audits in order to exchange information with counterparty tax authorities in accordance with legislation on taxation.

7. Tax authorities shall carry out automatic information exchange or communication mechanism under international commitments of Vietnam under tax treaties. On a periodic or annual basis, tax authorities shall post the list of foreign tax authorities implementing the mechanism for the automatic information exchange or communication of Country-by-Country reports of profits of taxpayers on their websites.

8. Tax authorities shall make adjustments in the transfer pricing under bilateral agreements under relevant tax treaties.

9. Where tax authorities enter into APA with taxpayers, they shall assume the following responsibilities:

a) Manage, examine, inspect or audit related-party transactions which are not covered by APA according to the risk management principles;

b) Manage, inspect, examine or audit the compliance of taxpayers with APA in accordance with laws and regulations.

Article 21. Responsibilities of ministries, ministry-level agencies and People’s Committees of centrally-affiliated cities and provinces

1. The Ministry of Finance shall, within their remit, have the following responsibilities:

a) Assume responsibility for the state management of prices of related-party transactions in accordance with provisions laid down herein;

b) Undertake and collaborate with the Ministry of Information and Communications in communicating or disseminating the state tax administration over enterprises engaged in related party transactions;

c) Inspect, examine and audit the compliance of enterprises engaged in related party transactions with regulations on taxation under this Decree.

2. The State Bank of Vietnam shall, within their remit, have the following responsibilities:

Cooperate in the provision of information or data on foreign loans and debt repayments of particular enterprises engaged in related party transactions by reference to the lists compiled by tax authorities, including data on loan amounts, interest rates, periods of interest payment and principal repayment, actual fund withdrawal, debt (principal or interest) repayment and other related information (if any).

3. The Ministry of Planning and Investment shall, within their remit, have the following responsibilities:

Cooperate in provision of data for registration of business industries of enterprises; databases concerning investment fund structures at licensing dates and dates of adjustment and amendment to investment registration certificates or enterprise registration certificates and relevant information on investment projects when tax authorities conduct transfer pricing inspections, examinations or audits over enterprises engaged in related party transactions.

4. The Ministry of Science and Technology, the Ministry of Agriculture and Rural Development shall, within their remit, have the following responsibilities:

Collaborate in providing the databases relating to agreements on technology transfer; industrial property right transfer; transfer of plant variety rights; application documents for registration of intellectual property rights after industrial property rights, plant variety rights are established; and providing opinions or feedbacks to tax authorities upon their request in order for them to carry out the tax administration over enterprises engaged in related-party transactions.

5. The Ministry of Information and Communications shall, within their remit, have the following responsibilities:

Cooperate in provision of the databases of enterprises licensed to do business in the sectors within their jurisdiction and information about related-party transactions in the digital economy sector upon the Ministry of Finance’s request.

6. The Ministry of Industry and Trade shall, within their remit, have the following responsibilities:

Cooperate in provision of the databases of transaction prices of commodities available on domestic commodity exchanges and information within its scope of management, or information necessary for the tax administration over enterprises having related party transactions at the requests of tax authorities.

7. The Commission for the Management of State Capital at Enterprises shall, within their remit, have the following responsibilities:

Collaborate in motivating groups, incorporations, groups of related enterprises under their jurisdiction to provide information in accordance with tax authority's regulations.

8. People’s Committees of centrally-affiliated cities and provinces shall, within the ambit of their duties and powers, have the following responsibilities:

Direct Departments of Planning and Investment, Departments of Finance and other authorities to establish the specialized databases facilitating the tax administration over enterprises having related party transactions.

9. Ministries and sectoral administrations shall, within their remit, have responsibilities for cooperating with the Ministry of Finance in implementing this Decree.

Article 22. Entry into force

1. This Decree shall enter into force on December 20, 2020 and take effect from the corporate income tax term of 2020.

2. The Decree No. 20/2017/ND-CP dated February 24, 2017 and the Decree No. 68/2020/ND-CP dated June 24, 2020 of the Government, regulating the tax administration for enterprises engaged in the transfer pricing, shall be repealed from the effective date of this Decree.

3. Declaration and finalization of 2017 and 2018 corporate income taxes:

a) If taxpayers subject to the requirement for supplements to corporate income tax finalization returns in 2017 and 2018 under the provisions of clause 2 of Article 2 of the Government’s Decree No. 68/2020/ND-CP dated June 24, 2020 have not yet made additional declaration for incorporate income tax finalization returns, they may continue to do so by January 1, 2021;

b) If taxpayers already receiving inspections, examinations or audits of tax authorities or competent regulatory authorities and obtaining conclusions therefrom and handling decisions for the 2017 and 2018 taxable period fall within the cases in which they are qualified for the redetermination of tax amounts payable under point c of clause 2 of Article 2 in the Decree No. 68/2020/ND-CP dated June 24, 2020, but have not yet submitted applications to tax authorities till the effective date of this Decree, they shall be entitled to request directly supervisory tax authorities to redetermine tax amounts payable;

c) In case where taxpayers’ corporate income tax amounts or late payment amounts in 2017 and 2018 already paid to the state budget are greater than redetermined ones, the difference shall be offset against the amounts of corporate income tax accrued for the period from 2020 to end of 2024. After such period expires, tax amounts that remain after such offset shall not be further handled.

4. In case where loan interest costs are carried forward to the following taxable period upon the finalization of corporate income tax in 2019 under the Decree No. 68/2020/ND-CP, the time limit for carry-forward of loan interest costs shall not be longer than 5 consecutive years after the 2020’s CIT period. After expiry of such 5-year period, if such costs are not completely carried forward, the remaining portion of loan interest costs shall not be brought forward to the following taxable periods.

Article 23. Implementation responsibilities

1. The Ministry of Finance shall preside over or cooperate with concerned ministries, sectoral administrations, People’s Committees of provinces and centrally-governed cities in implementing this Decree.

2. Ministers, Heads of Ministry-level agencies, Heads of Governmental bodies, Chairpersons of People’s Committees of provinces and centrally-affiliated cities, other entities and persons involved shall be responsible for implementing this Decree./.