Advance Pricing Agreement Vietnam

Duong has advised multinationals on issues of tax pricing planning, tariffs and transfers, compliance and dispute resolution, supply chain tax planning and corporate restructuring. He has tax and structuring advice for business transactions in various sectors, including industry, automotive, FMCGs, financial services, infrastructure, IT and the Japanese market. By law, the APA is defined as a mandatory written agreement between tax authorities and taxpayers and/or tax authorities in other jurisdictions that have signed a tax treaty with Vietnam. The APA determines the basis for calculating the tax and transfer pricing methods or prices based on the market price. The APA must be established before the taxpayer can file his or her tax returns. The rules on the advance price agreement (APA) are not new, but until now their practical importance has been rather limited. The APA is an agreement between the subject and TA, which defines in advance the basis of the tax calculation, the methods of determining taxable prices and the length prices of one or more transactions with related persons over a period of time. More than ever, foreign and Vietnamese multinationals should be much more cautious in their transfer pricing agreements by taking appropriate measures to ensure consistency with the parent company`s mandatory reporting requirements, in accordance with their country of residence`s BEPS rules and under trade agreements signed with Vietnam. Note: This article was first published in December 2015 and contains the most recent changes to transfer pricing rules. Ha is directly involved in the consultation of the main Ministry of Taxation and the Ministry of Finance on the 20/2017/ND-CP decree on transfer pricing, including the examination of practical issues relating to local transfer pricing controls for multinational companies operating in Vietnam. In April 2017, before the government released tax administration for companies with controlled transactions (“Decree 20”), transfer pricing rules in Vietnam were lax.

Investors could enter the market without worrying too much about their transfer pricing policy. The use of a secret comparison is considered primarily only for tax risk assessments by the tax authorities, with priority given to taking into account the use of commercial databases and public information in the case of a tax proposal during a transfer pricing review. However, the current text of the decree is unclear in this regard and stipulates that the tax administration may use various sources of information, including commercial databases and publicly available data, including its own database and information provided by certain departmental departments for risk assessment and tax adjustment of transfer pricing. However, in transfer pricing controls in which tax payers do not submit advertising forms or transfer pricing documents required within the legal time frame, tax authorities are fully empowered to assess the price and/or profits of the subjects on the basis of their secret equivalents. On 20 November 2012, in order to reduce tax evasion and evasion and achieve effective tax management, an amendment to the Tax Act and the introduction of a Pre-Price Agreement (APA) was introduced to provide taxpayers and tax authorities with tax security, transfer pricing planning, protection against tax evasion and effective tax management.

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