Thông tư 104/2011/TT-BTC

CIRCULAR

AMENDING AND SUPPLEMENTING THE CIRCULAR NO. 11/2010/TT-BTC DATED JANUARY 19, 2010 OF THE MINISTRY OF FINANCE GUIDING THE FULFILLMENT OF TAX OBLIGATION BY VIETNAMESE INVESTORS MAKING OFFSHORE INVESTMENT

Pursuant to the current Laws and Ordinances on taxation of the Socialist Republic Of Vietnam and the Government’s Decrees stipulating in detail the implementation of the Laws and Ordinances on taxation;

Pursuant to the Decree No.78/2006/ND-CP dated August 09, 2006 of the Government stipulating the offshore direct investment;

Pursuant to the Decree No.121/2007/ND-CP dated July 25, 2007 of the Government stipulating the offshore direct investment in the petroleum operation;

Pursuant to the Decree No. 17/2009/ND-CPdated February 16, 2009 of the Government on amending and supplementing some articles of the Decree No. 121/2007/ND-CP dated July 25, 2007 stipulating the offshore direct investment in the petroleum operation;

Pursuant to Decree No. 118/2008/ND-CP dated November 27, 2008 of the Government stipulating the functions, duties and powers and organizational structure of the Ministry of Finance;

The Ministry of Finance guides amendment and supplement of some content in the Circular No. 11/2010/TT-BTC of the Ministry of Finance on fulfillment of tax obligation by Vietnamese investors making offshore investment as follows:

Article 1. Amending and supplementing some content in the Circular No. 11/2010/TT-BTC as follows:

1. Amending point 1.1, clause 2 of Article 2 as follows:

“1.1 Machinery, equipment, detached parts, supplies, materials, fuel exported abroad by investors to create fixed assets of investment projects in foreign countries will comply with the provisions of the current Law on Import and Export Duties;

For the case of export tax exemption as prescribed, the dossier will be submitted to the customs offices for export tax exemption in accordance with the provisions of the Law on Import and Export Duties and other guiding documents. "

2. Amending points 2.1, clause 2 of Article 2 as follows:

“2.1. Machinery, equipment, detached parts for export to foreign countries to create fixed assets of investment projects in foreign countries, upon liquidation or completion of the project if imported back into Vietnam they shall be considered for reimbursement of paid export duty (if any) corresponding to the actual re-imported quantity and not having to pay import duty.

The dossier submitted to the customs office for consideration of reimbursement of paid export duty (if any) and non-collection of import duty in accordance with regulations on Law on Import and Export Duties and guiding documents.”

3. Superseding clause 3, Article 4 by a new clause 3 as follows:

“3.1 Procedures for declaration and payment of tax for the income from offshore investment projects

a.1 The dossier attached upon declaration and payment of tax of Vietnamese enterprises investing abroad for the income from investment projects in foreign countries including:

- Documents of enterprise on the profit distribution of offshore investment projects or enterprise’s certification on the level of profit sharing of the offshore investment projects: presenting the original and submitting 01 certified and sealed by the enterprise;

- Financial statement of the enterprise audited/certified by an independent auditing organization/tax and finance agency in the invested country (if the country, territory receiving investment having independent auditing organization) or certified by a competent authority in the country, territory receiving investment: presenting original, submitting 01 copy certified and sealed by the enterprise;

- Declaration of income tax of enterprise under offshore investment projects certified by the authorized representative of the offshore investment projects: presenting the original, submitting 01 copy certified and sealed by the enterprise;

- The record of the tax settlement for the enterprise (if any): presenting the original, submitting 01 copy certified and sealed by the enterprise;

- The certification of the amount of tax already paid, paid on its behalf, the exempted or reduced tax amount by the tax agency abroad or documents evidencing the amount of tax already paid, paid on its behalf, the exempted or reduced tax amount abroad: presenting the original, submitting 01 copy certified and sealed by the enterprise;

- The annex of the income tax amount that the enterprise has already paid abroad deducted in the tax period in the form No. 03-4/TNDN (Issued together with the Circular No. 28/2011/TT-BTC dated February 28, 2011 of the Ministry of Finance guiding the implementation of some articles of the Law on Tax Management and guiding the implementation of the Decree No. 85/2007/ND-CP of May 25, 2007 and the Decree No.106/2010/ND-CP on October 28, 2010 of the Government).

In case investment projects in foreign countries have not yet generated any taxable income (or loss arising), upon declaring for the annual enterprise income tax finalization, the Vietnamese enterprises making offshore investment only submit a financial Statement certified by an independent audit agencies or competent authority of the country where the investors are investing and Declaration of income tax of the offshore investment projects certified by the authorized representative of the offshore investment projects (presenting the original, submitting 01 copy certified and sealed by the enterprise;) The arisen loss from the offshore investment projects are not deducted from the income generated by domestic enterprises upon calculating enterprise income tax.

a.2 Tax agency’s responsibility:

The tax agency is responsible for receiving and verifying dossier and processing as follows:

In case of incomplete dossier, within three working days from the date of dossier receipt, a written response will be sent to the enterprise (clearly stating reason).

If the dossier is complete, within ten working days from the date of receipt, implement the verification and comparison of materials and documents in the dossier with the content stipulated in this Circular to determine the amount of payable tax, the consistence and accuracy of the dossier and guide the enterprises to declare tax payment as prescribed in the Circular No. 11/2010/TT-BTC and guidance in this Circular.

3.2 In case the investment projects in foreign countries must be stopped their operation with the arisen loss are not deducted fully and Vietnamese enterprises must bear then the Vietnamese enterprises are entitled to make declaration and deduction this loss into the taxable income of Vietnamese enterprises from the subsequent tax period of enterprise income tax in accordance with regulation of the Law on enterprise income tax. The time for carrying forward of losses will not exceed 5 years for continuous calculation from the year Vietnamese enterprises receives the loss not fully deducted as prescribed in this clause.

The carried forward losses by the disbursed offshore investment capital, not exceeding at the maximum amount of investment made ​​abroad for investment activities under the Certificate / License of offshore investment (or Certificate/ License of investment adjusted at the latest time in case the investment projects adjusting Certificate/ License of investment) issued by the Ministry of Planning and Investment.

a.1 The dossier attached upon declaration and finalization of tax of Vietnam enterprises investing abroad for losses from investment projects in foreign countries including:

- The written proposal of Vietnamese enterprises investing abroad: submission of 01 original;

- Certificate / License of offshore investment (or Certificate/ License of investment adjusted at the latest time in case the investment projects adjusting Certificate/ License of investment) issued by the Ministry of Planning and Investment to the enterprise as prescribed: presenting an original and submitting a copy;

- Documents certifying the termination of operation of the economic organizations in foreign countries: presenting an original and submitting a copy;

- Financial statements in the latest 3 years from fiscal year of liquidation the project of the economic organizations abroad audited/certified and financially reported by an independent/tax and finance agency in the invested country (if the country and territory receiving investment has independent auditing organization) or certified by a competent authority in the country and territory receiving investment. In case the investment projects are not implemented 03 years adequately, the enterprise will submit all financial Statements from the time of operation to the termination of offshore investment project: presenting an original and submitting a copy

- Liquidation contract of offshore investment projects and documents proving the liquidation transactions took place abroad: presenting an original and submitting a copy

- Declaration of income tax of enterprise in offshore investment projects certified by the authorized representative of the offshore investment projects: presenting an original and submitting a copy

- The record of the tax settlement for the enterprise (if any): presenting an original and submitting a copy

- Confirming the amount of tax already paid, paid on its behalf, the exempted or reduced tax amount of the tax authority abroad or documents evidencing the amount of tax already paid, paid on its behalf, the exempted or reduced tax amount abroad, the losses being carried forward, not yet carried forward of the business operation of the previous fiscal years.

a.2 The tax agency’s responsibility: The tax agency is responsible for receiving, verifying dossier and processing as follows:

a.2.1 In case of incomplete dossier, within three working days from the date of dossier receipt, a written response will be sent to the enterprise (specify reasons).

a.2.2 If the dossier is complete within ten working days from the date of receipt, implement the verification and comparison of materials and documents in the dossier with the content guided in this Circular to determine the loss being carried forward, the consistence and accuracy of the dossier and guide the enterprises to deal with the loss as guided in this Circular.

Article 2. Implementation organization and effect

This Circular will take effect on August 26, 2011,

During the course of implementation, if there is any problem and difficulty arising, promptly report to the Ministry of Finance for timely guidance and settlement.