The choice of tax registration of affiliated units (such as branches, representative offices, operating locations) in the form of independent financial accounting or financial accounting depends on the management regime. administer and manage the books of the society. At the same time, it should also be based on the actual operation situation of the affiliated units. So how to calculate dependent tax for branches? Let’s find out with Accountant X through the article below.
Legal grounds
- Enterprise Law 2020
- Tax Administration Law 2019
- Decree 126/2020/ND-CP
What is dependent accounting?
According to the law, specifically in Clause 1, Article 44 of the Law on Enterprises 2020, a branch is a dependent unit of an enterprise, responsible for performing all or part of the enterprise’s functions, including the following: authorized representative. The branch’s line of business must be consistent with the business line of the enterprise. The branch has the right to choose an accounting unit suitable to the management requirements and characteristics of the enterprise.
Characteristics of dependent accounting branch
Characteristics of dependent accounting branches in the same province as the managing enterprise:
It is not required to declare CIT and PIT at the branch office but will declare it centrally at the managing enterprise.
No need to prepare financial statements, PIT finalization, or CIT.
No need to declare VAT (except for business branches in the field of restaurants).
It is not necessary to use a separate seal or invoice with the host enterprise.
Characteristics of a dependent accounting branch that is different from that of the managing enterprise:
Not having to declare PIT and CIT, but will declare it centrally at the host enterprise.
Having an accounting system, which is directly under the company’s accounting apparatus.
No need to prepare financial statements, PIT finalization, CIT.
Must declare VAT at the place where the branch office is located.
The license fee must be declared and paid at the branch office.
It is allowed to use separate seals and invoices with the managing enterprise.
What responsibilities does the enterprise have for its dependent accounting branch?
In Circular 200/2014/TT-BTC, specifically in Article 8, the rights and responsibilities of enterprises for the organization of accounting at affiliated units that do not have legal status for dependent accounting (referred to as: is a dependent accounting unit) are specified as follows:
Regarding responsibilities: Enterprises are responsible for organizing their accounting apparatus and accounting decentralization in dependent accounting units in accordance with their operational characteristics and management requirements and not contrary to the provisions of law. the law.
Regarding rights: Enterprises decide the accounting at dependent accounting units to organize their own accounting apparatus for:
The recognition of business capital granted by the enterprise: The enterprise shall decide whether the dependent accounting unit shall recognize it as a liability or equity;
For transactions of buying, selling, and transferring internal products, goods and services: Revenue and cost prices are recorded separately at each dependent accounting unit if there is a rotation of products and goods , services between internal stages in nature create added value in products, goods and services. The recognition of revenue from internal transactions for presentation in the financial statements of the entities does not depend on the form of accounting vouchers (invoices or internal circulation documents);
The accounting decentralization at the dependent accounting unit will depend on the centralized or distributed accounting organization model, but the enterprise can assign the dependent accounting unit to reflect the undistributed or undistributed after-tax profit. only reflect revenue and expenses.
How to calculate dependent tax for branches
Taxpayers shall comply with regulations on the location of filing tax returns according to the provisions of Clauses 1, 2 and 3, Article 45 of the Law on Tax Administration and the following provisions:
The place to submit tax declaration dossiers for taxpayers with many activities and business activities in many provincial-level areas as prescribed at Points a and b, Clause 4, Article 45 of the Law on Tax Administration is the tax authority in the locality where they operate. Business activities other than the province or city where the head office is located in the following cases:
Declare value-added tax of the investment project for the case specified at point d, clause 2, Article 7 of Decree 126/2020/ND-CP at the place where the investment project is located.
Declare value-added tax on real estate transfer of infrastructure investment projects, houses for transfer (including the case where advance payment is collected from customers according to the schedule) at the place where there is a real estate transactions.
Declare value-added tax at the place where the power plant is located.
Declaration of excise tax at the place of production or processing of goods subject to excise tax or the place of service provided subject to excise tax (except for computerized lottery business). In case the taxpayer directly imports goods subject to excise tax and then sells them domestically, the taxpayer must declare excise tax to the tax authority directly managing where the taxpayer is headquartered.
Declare environmental protection tax at the place of production of goods subject to environmental protection tax, except for environmental protection tax of petroleum business activities according to the provisions at point a, clause 4, Article 11 of Decree 126/2020/ND-CP
Declare environmental protection tax at the place where coal production and trading establishments are located (including for internal consumption), except for environmental protection tax specified at Point b, Clause 4, Article 11 of Decree 126/2020/ND-CP
Declare natural resources tax (except for natural resources tax for hydroelectricity production activities in case the reservoir bed of the hydroelectric power plant is located in the same provincial areas; crude oil extraction, export and sale activities; activities). exploiting, exporting and selling natural gas and natural resources tax of organizations assigned to sell seized or confiscated natural resources; irregular natural resource exploitation licensed by a competent state agency or not in the case of must be licensed as required by law).
Declare corporate income tax at the place where there are dependent units, business locations whose income is entitled to corporate income tax incentives.
Exploiting environmental protection fees at mineral extraction sites (except for crude oil, natural gas and coal gas; organizing the purchase and collection of minerals from small miners).
Declare the license fee at the place where the dependent unit or business location is located.
Thus, the branch of dependent accounting is as follows:
The place of submission of license fee declaration documents for the dependent unit of the business location is different from the province or city where the head office is located, which is the tax authority managing the dependent unit of the business location.
If the dependent tax accounting branch is a dependent unit, the business location is in the same province or city as the head office, the license fee declaration must be submitted.
Regulations on accounting invoices for dependent branches
Pursuant to Article 13 of Decree 123/2020/ND-CP stipulates as follows:
Business organizations declare and pay value-added tax by the deduction method and transfer goods to dependent accounting establishments such as branches and shops located in other localities (provinces, cities under Central) for sale or export transfer between branches and dependent units; export goods to the receiving establishment to act as an agent to sell at the right price and receive a commission. Based on the method of business organization and accounting, the establishment can choose one of two ways to use invoices and vouchers. as follows:
Using value-added electronic invoices as a basis for payment and declaration and payment of value-added tax at each unit and each stage independently of each other;
Using the Ex-warehousing and internal shipping slip; use the delivery note sent to the agent for sale as prescribed for goods exported to the agency acting as an agent.
- Dependent cost-accounting establishments, branches, stores, and establishments that act as sales agents when selling goods must issue invoices according to regulations and deliver them to buyers, and concurrently make a list of sold goods and send them to the establishment. have goods transferred or establishments have goods for sale (collectively referred to as delivery establishments) so that the delivery establishments issue value-added invoices for actually consumed goods and deliver them to the dependent accounting establishments, branches, stores, establishments accepting as sales agents.
- In case the establishment has a large quantity and sales of goods, the list can be made every 5 days or 10 days. In case the goods sold have different value-added tax rates, a separate list of sold goods must be made according to each tax rate group.
- Dependent cost-accounting establishments, branches, shops and establishments acting as sales agents shall declare and pay value-added tax on goods sold to buyers and are entitled to declare and deduct value-added tax. input added value according to the value-added invoice of the delivery facility.
- In case dependent units of agro-forestry-fishery business establishments have registered, declared and paid value-added tax by the deduction method, have purchased agricultural, forestry and aquatic products. When goods are transferred or sold to the head office of the business establishment, when transferring or selling, the dependent unit shall use the delivery note cum internal transportation, not use the value-added e-invoice. .
- Organizations and individuals that export goods for sale on a mobile basis use the delivery note cum internal transportation as prescribed, when selling goods, make an e-invoice according to regulations.
- In case of capital contribution with assets of an organization or individual doing business in Vietnam for the purpose of establishing an enterprise, an invoice is not required, but documents must be used from the minutes of capital contribution certification, minutes of asset delivery and receipt, asset valuation record enclosed with a set of documents on asset origin.
- In case of asset transfer between dependent cost-accounting member units in the organization; When the property to be transferred is divided, split, consolidated, merged, or transformed into an enterprise, the organization having the transferred assets must have an order to transfer the assets, enclosed with a set of documents on the origin of the assets, and not be required to prepare the transfer of assets. receipt.
- In case assets are transferred between independent accounting units or between member units with full legal status in the same organization, the organization having transferred assets must issue an electronic invoice as follows: sell goods.
Services of LSX
Prestigious professional services: Firstly, the team of consultants and consultants for many years in the field of civil status, and customer support.
On-time: Certainly, with the motto “Get your lawyer right at your fingertips”, we ensure the service always performs on time. The rights and interests of customers always come first.
Cost: Besides, LSX’s service costs are highly competitive; depending on the nature of the particular case. So, we want our guests to have the best possible service experience. Therefore, costs which guaranteed to be the most suitable and economical for customers.
Confidentiality of client information: Finally, all brand information of client LSX will be 100% confidential.
Please contact us immediately if you have any questions about “Guidance on how to calculate dependent tax for branches in Vietnam”
Contact LSX
Finally, hope this article is useful for you to answer the question about “Guidance on how to calculate dependent tax for branches in Vietnam” If you need any further information, please contact LSX Law firm: at +84846175333 or Email: [email protected]
Please see more
- Is health insurance in Vietnam subject to VAT?
- What types of insurance are there in Vietnam?
- Where to buy compulsory car insurance in Vietnam?
Frequently asked questions
Advantages: there is no need to organize an additional accounting apparatus so that subordinate units will easily manage and operate; At the same time, it also reduces some accounting tasks such as preparing financial statements.
Disadvantages: difficult to manage expenses, documents, profit and loss situation. In addition, in the case of establishing a dependent financial accounting unit in another province, located far away from the head office, it will cause difficulties in transferring documents, which may lead to delayed declaration.
Method 1: Make a VAT invoice as a basis for payment and tax declaration at each stage.
Option 2: Make an ex-warehousing bill and internal shipping together with an internal order. When making an ex-warehousing note, the dependent accounting branches must issue an invoice according to regulations and deliver it to the buyer and attach a list of sold goods and send it to the department with the adjusted goods for the delivery establishment to issue a VAT invoice. for consumable goods delivered to dependent branches, stores. At this time, the dependent branch shall declare and pay VAT on the goods sold to the buyer and shall declare and deduct input VAT according to the invoice according to the VAT invoice of the delivery facility.
Conclusion: So the above is Guidance on how to calculate dependent tax for branches in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
