On August 28th, 2019, Hanoi Department of Tax issued Official Letter No.67819/CT-TTHT. Whereby:
In case the subsidiary established in Vietnam is 100% owned by the foreign parent company: in the pre-establishment process, the parent company has a power of attorney for other individuals (not capital contributors) carry out activities related to the establishment of Enterprise. Accordingly, the contracts and input invoices bear the name of the individual or the parent company, the payment is transferred directly by the parent company to suppliers through the Bank; These expenses shall be offset against the parent company’s charter capital contribution into the subsidiary (this payment method is specified in writing and having the reconciliation and confirmation between the both parties for this offset) in accordance with the guidance in Circular No. 219/2013 / TT-BTC dated December 31, 2013; Circular No. 26/2015 / TT-BTC of February 27, 2015; In the Circular No. 96/2015 / TT-BTC dated June 22, 2015, a subsidiary in Vietnam is allowed to declare, deduct input VAT and record the deductible expenses when calculating CIT for VAT invoices bearing the name of the parent company or individual under law.
