Quyết định 1133TCT/QD-HTQT

DECISION

ISSUING REGULATION ON MANAGEMENT ORGANIZATION AND IMPLEMENTATION OF AGREEMENT ON DOUBLE TAXATION AVOIDANCE IN TAX SECTOR

DIRECTOR OF GENERAL DEPARTMENT OF TAXATION

Pursuant to Decree No. 281/HDBT dated August 7, 1990 of the Council of Ministers (now as the Government) on the establishment of the state system under the Ministry of Finance; Circular No. 38 TC / DOP dated August 25, 1990 of the Ministry of Finance guiding the implementation of Decree No. 281/HDBT;

Pursuant to Circular 52 TC/TCT dated August 16, 1999 of the Ministry of Finance guiding the implementation of the Agreement on double taxation avoidance between Vietnam and other countries and the Circular No. 95/1997/TT-BTC dated December 29, 1997 of the Ministry of Finance guiding and explaining the contents of terms of Agreement on double taxation avoidance which has been signed between Vietnam and the countries and takes effect in Vietnam;

After reviewing and evaluating the implementation of provisional Regulation on management organization and implementation of Agreement on double taxation avoidance in the tax sector issued with Decision No. 192 TCT/QD/HTQT dated April 02, 1998 of the Director of General Department of Taxation;

At the proposal of the Head of International Cooperation Department and the Head of staff organization and training Department – General Department of Customs;

DECIDES

Article 1. Issued with this Decision is the “Regulation on management organization and implementation of the Agreement on double taxation avoidance in the tax sector”.

Article 2. This Decision takes effect from the date of its signing and supersedes Decision No. 192 TCT/HTQT dated April 02, 1998 of the Director of General Department of Taxation on the issue of provisional Regulation on management organization and implementation of the Agreement on double taxation avoidance in the tax sector;

Article 3. Heads of Department of Taxation of provinces and centrally-affiliated cities, the Heads of Departments of the General Department of Taxation are liable to execute this Decision;

REGULATION

ON MANAGEMENT ORGANIZATION AND IMPLEMENTATION OF THE AGREEMENT ON DOUBLE TAXATION AVOIDANCE IN THE TAX SECTOR
(Issued with Decision No. 1133 TCT/QD/HTQT dated July 13, 2001)

I- GENERAL PROVISION:

Article 1. Management principles of implementation of the Agreement

1- Ensuring the uniform and concentrated implementation of the Agreement through the General Department of Taxation as the International Cooperation Department and at the Department of Taxation as the group in charge of the Agreement;

2- Keeping information confidential and avoiding the disclosure of information causing damage for the taxpayers, affecting the foreign relations between Vietnam and other countries. Any transaction information with foreign tax agency shall be done uniformly and concentratedly through the General Department of Taxation;

Article 2. Requirements for management of implementation of the Agreement

1- Properly complying with the provisions in the Agreement and the documents guiding the implementation from the Ministry of Finance, the General Department of Taxation and ensuring all taxpayers are entitled to the regulations on tax in the framework of Agreements of double tax avoidance;

2- Scientifically and completely keeping records of cases applying the Agreement in service of inspection, examination and settlement of complaints under regulation of law;

3- The application of Agreement is done under the mechanism that the taxpayer may request the application of terms of the Agreement, the tax agency reviews and make a decision to permit the application of relevant terms of Agreement;

II- SPECIFIC PROVISIONS:

Article 3. Organization of implementation of the Agreement at the General Department of Taxation

The International Cooperation Department has its functions and duties as the focal point assisting the General Department of Taxation with the following:

1. Studying and drafting the guiding documents and explaining the implementation for each Agreement of double taxation avoidance that takes effect for submission to the Ministry for promulgation under the authority;

2. Developing the professional processes on management of the Agreement;

3. Guiding the Departments of Taxation in the implementation of terms of the Agreement and other provisions in this Regulation;

4. Studying and taking part in negotiation with the foreign tax agencies to settle disputes and complaints arising during the implementation of the Agreement require the settlement by the mutual agreement procedures between the Vietnam tax agency with the foreign tax agency;

5. Implementing, guiding and directing the Departments of Taxation to exchange information with the foreign tax agency and using this information under the provisions of the Agreement;

6. Explaining and guiding the taxpayers through the provisions in the Agreement upon the request of taxpayers;

7. Settling the complaints of the taxpayers related to the application of terms of Agreement and the Circulars providing the guidelines for the Agreement from the Ministry of Finance;

8. Coordinating with the professional departments assigned for management based on subjects:

8.1. Settling files for tax refund under the direct Agreement from the budget;

8.2. Settling the tax deduction paid in foreign country into the tax paid in Vietnam with the total tax amount of over five hundred million dong deducted of a taxpayer for a relevant tax year;

8.3. Arranging for the residents in the countries which have signed the Agreement with Vietnam to be entitled to the regulation on tax exemption in Vietnam or payment of tax with a tax rate lower than the rate specified in the tax law of Vietnam under the provisions in the Agreement with a total tax amount of over five hundred million dong applied for a taxpayer for a relevant tax year;

8.4. Arranging for the residents in the countries which have signed the Agreement with Vietnam to be entitled to the regulation on tax exemption in Vietnam or payment of tax with a tax rate lower than the rate specified in the tax law of Vietnam under the provisions of the Agreement for the taxpayers who are determined by the tax agency of provinces or cities to have business locations in provinces or cities or the taxpayers who are determined by the Department of Taxation to have transactions and internal contracts not in compliance with market price between the independent business owners;

9. Issuing certificate of taxes paid in Vietnam under the Agreement for foreign residents in case those taxes are exempted or reduced under the regulation on foreign investment incentives under the authority of settlement of the General Department of Taxation;

10. Coordinating with the technical departments assigned to manage the persons inspecting the Departments of Taxation in the implementation of terms of Agreement and the provisions in this Regulation;

11. Coordinating with the staff organization and training Department and the related departments to formulate plan and organize the implementation of training program for officers of tax sector on the Agreement;

Article 4. Organizing the implementation of Agreement at Department of taxation of provinces and cities:

1. Each Department of taxation of province and city shall set up a group in charge of the Agreement including 01 to 03 responsible and in charge officers of the foreign investment Department (for Departments of taxation that have set up the foreign investment Department) or of a tax collecting department for state-owned enterprises (for Departments of taxation that have not set up the foreign investment Department) to assist the Department of Taxation with the following:

1.1. Studying to master the contents and comply with the provisions of the Agreement on double taxation avoidance that Vietnam has signed with the other countries and the documents guiding the implementation of the Agreement of the Ministry of Finance and the General Department of Taxation;

1.2. Managing and monitoring the subjects and scope of application of the Agreements in the area to perform the functions as provided for in Part V of Circular No. 95/1997/TT/BTC dated December 29, 1997 of the Ministry of Finance, particularly:

(a) Permitting the tax deduction paid in foreign country into the tax paid in Vietnam with the total tax amount deducted for the relevant tax year not exceeding five hundred million dong for the taxpayers who are determined by the agency of provinces and cities to have business locations in provinces or cities or the taxpayers who are determined by the Department of Taxation to have transactions and internal contracts not in compliance with market price between the independent business owners, the files are transferred to the General Department of Taxation;

(b) Arranging for the residents in the countries which have signed the Agreement with Vietnam to be entitled to the regulation on tax exemption in Vietnam or payment of tax with a tax rate lower than the rate specified in the tax law of Vietnam under the provisions of the Agreement with a total tax amount not exceeding five hundred million dong applied for a relevant tax year;

(c) Verifying files in case of tax refund directly from the budget as required by the General Department of Taxation;

(d) Issuing certificate of taxes paid in Vietnam under the Agreement for foreign residents except for cases of determining the taxes exempted or reduced under the regulation on foreign investment incentives under the authority of settlement of the General Department of Taxation;

(e) Issuing certificate of resident of Vietnam under the provisions of the Agreement;

1.3. Explaining the Agreement to the taxpayers in the areas of provinces and cities;

1.4. Performing the duties of information gathering for the exchange of information with the foreign tax agency and use of information exchanged as required and guided of the General Department of Taxation;

2. Any issue related to the explanation and application of the Agreement of double taxation between Vietnam and the countries in the areas of Department of taxation of provinces and cities concerned must be done uniformly through the group in charge of the Agreement at the Department of taxation. Only the Director or Deputy Director of Department of taxation authorized by the Director to sign for settlement of cases where the provisions of the Agreement on double taxation avoidance are applied;

Article 5. Monitoring and making periodical report on the implementation of Agreement

1.Department of taxation of provinces and cities shall prepare a book to monitor the cases where the regulation on exemption of tax is applied in Vietnam under the Agreement or payment of tax at the tax rate specified in law or regulation on deduction of tax paid in foreign country into the tax to be paid in Vietnam. The Department of taxation shall send a periodic report to the General Department of taxation concerning the settlement in accordance with the Agreements under the regulations on the accounting – statistics report within tax sector, particularly as follows:

1.1.Periodically, the Department of Taxation shall send the quarterly report to the General Department of Taxation. The report shall be monitored and summarized, based on the books, by the department in charge of the Agreement at the Department of taxation, for submission to the leadership of Department and then sent to the General Department of Taxation. The time to send the report is the date or before the fifteenth date of the following month of reporting quarter;

1.2. The Form of book and the report on the management of implementation of the Agreement are done under the form specified in the Form of book attached in the Annex;

Contents of monitoring and reporting include:

(I) Name of taxpayer;

(II) Identification code of taxpayer may include:

Code of taxpayer at the residing country or in Vietnam (if any)

Passport number in case of foreign individual

Organization establishment permit number or business license;

(III) Address at the residing country and permanent address in Vietnam;

(IV) Taxable year;

(V) Taxable income: type of income, total;

(VI) Tax amount to be paid: tax rate, tax amount;

(VII) Tax amount to be exempted or deducted under the Agreement;

(VIII) Form of exemption or reduction: directness, clearing, refunding;

(IX) Grounds for exemption, reduction, provisions of Agreement;

(X) Official dispatch: number, date;

(XI) Notes accompanying documents as grounds for settlement

The reporting contents include the analysis and evaluation of use of information of foreign tax agency (if any) and the contents of proposals of problems, the points to be supplemented or amended in the current regulation;

2. The International Cooperation Department (General Department of Taxation) shall summarize the reports of Departments of taxation and make periodical (quarterly, bi-annual, annual) report to the General Department on the implementation of the Agreement in the tax sector./.

GENERAL DEPARTMENT OF TAXATION
           DEPARTMENT OF TAX.....

ANNEX

Issued with Decision No. 1133 reporting the management of implementation of the Agreement on double taxation avoidance

(From month ..... to month .......year ..........)

(*):The types of income are coded as follows:

1. B11: Corporate income tax of foreign contractor and sub-contractor;

2. B13: Corporate income tax in shipping charges;

3. D: Proceeds from shares

4. I: Interest on the loan;

5.R: Royalties (including income from the rental of equipment);

6. PI: Regular individual income;

7. CI: Income from transfer of property;

8. OI: Other incomes

(**):Forms of exemption and reduction are coded as follows:

1. M1: Tax exemption in the form of refunding;

2. M2: Tax exemption in the form of clearing (in the tax amount of subsequent period);

3. M3: Direct tax exemption;

4. G1: Tax exemption in the form of refunding;

5. G2: Tax exemption in the form of clearing (in the tax amount of subsequent period);

6. G3: Direct tax exemption;

(***):The Agreements are abbreviated by the name of the country signing contract with Vietnam

Ex: Contract between Vietnam and Thailand is abbreviated as Thailand;