APA APPLICATION IN TAX ADMINISTRATION OF ENTERPRISES HAVING TRANSACTIONS WITH RELATED PARTIES
On June 18, 2021, the Ministry of Finance issues the Circular No. 45/2021/TT-BTC guiding the application of Advance Pricing Agreement (APA) mechanism in tax administration of enterprises having transactions with related parties.
Specifically, taxpayers shall submit dossiers of request for APA application as prescribed. For dossiers of request for bilateral or multilateral APA application, taxpayers shall be responsible for the uniformity of the content between the dossiers submitted to the Vietnam tax agency and the dossiers submitted to the counterpart tax agency by the related parties within the scope of request for APA application.
Besides, the General Department of Taxation shall appraise taxpayers’ dossiers of request for APA application to check, compare, determine and evaluate the completeness, accuracy, lawfulness, rationality and validity of the information and data provided by the taxpayers in order to make a valuation on the method of determining prices of the related-party transaction, the selected comparable object suitable for determining the price level, profit ratio or profit distribution rate for transactions within the request for APA application.
The signed APA shall be binding upon both the tax agency and the taxpayer. Its validity period is 03 tax years maximum but must not exceed the actual number of years the taxpayer has operated and declared, paid enterprise income tax in Vietnam.
This Circular takes effect on August 03, 2021.
