On October 24, 2019, Hanoi Tax Department issued Official Letter No.80504/CT-TTHT. Whereby:
In case the company has a branch in different province from the Head Office’s location, which is a manufacturing facility and does not conduct accounting independently; The branch’s activities are to process products, create semi-finished products, then transport to the Head Office to continue processing finished products; The branch does not directly sell goods but the Head Office sells directly through stores and distribution channels:
– As regarding to VAT: The company declares VAT at its Head Office and pays VAT to the Tax Department where its manufacturing facility is located. To goods which subjected to the 10% VAT rate on VAT-exclusive price of the products, the payable VAT amount paid to the Tax Department where the manufacturing facility is located is determined at the rate of 2%. The company must prepare and submit the “VAT distribution table” according to form No.01-6/GTGT of Circular 156/2013/TT-BTC together with tax dossier to the Tax Department where the Head Office is located, and a copy of the VAT distribution table form No. 01-6/GTGT mentioned above to the Tax Department where the manufacturing facility is located.
– As regarding to CIT: The company declares CIT at the Head Office for tax amounts of both the Head Office and the manufacturing facility. The determination of the rate and amount of tax payable to the State Treasury which is at the same level with the Tax Department where the Head Office and the branch is located shall comply with instructions in Article 12, Article 13 of Circular No.78/2014/TT-BTC.
– As regarding to PIT: in case all employees who are working at the branch signed labor contracts with the Company, were dispatched to the branch and registered for deduction at the Company, and the Company is responsible for paying their income, then their PIT shall be declared and paid at the Tax Department where the Head Office is located.