19 Oct REPRESENTATIVE OFFICE IN VIETNAM – MANAGE THE END YEAR 2020 COMPLIANCE REQUIREMENTS(Last Updated On: March 16, 2021)
At the end of each year, there are important compliance procedures for a foreign representative office in Viet Nam: Annual operation report end year, Personal income tax (PIT) settlement, annual budget and paid expenditures reports for head office…Our free counsel under hear will support you to avoid serious tax, insurances arrears and other violations on local laws which may also impact to your good standing in Viet Nam.
FREE COUNSEL FOR LEGAL GROUND ON ANNUAL OPERATION YEAR-END REPORT
- By January 30th of the following year, every representative office shall deliver in person or mail the annual report end year on its operations using the form issued by the Ministry of Industry and Trade to the licensing agency.
- Also, upon the request of competent state regulatory authorities, a representative office shall submit operation reports, documents and other explanatory information, which are kept at its office for its license renewal/revision during its operation.
- Failure to submit the operation reports on time may lead to a fine of up to 40 million VND and adversely affect the future office license renewal and other procedures, as well as require supplementary reports.
- Last but not least, the true and fair of annual operation report are grounded for local competent state agencies make inspection decisions or consideration in extending office license in the next period.
FREE COUNSEL FOR LEGAL GROUND IN PERSONAL INCOME TAX SETTLEMENT
- The residents that earn incomes from wages paid by overseas organizations and individuals shall directly declare tax quarterly at tax authorities.
- Employees who have more incomes from wages /salary from other companies.
2 – Who will pay tax on the progressive method or applying the fixed rate
- Upon you are resident or none resident, you should declare and settlement of PIT (Personal Income Tax) for the incomes inside Vietnam or either global income.
- Taxable amount / tax rates of resident and none resident are completely different. Fail to apply the properly declaration of PIT will lead to serious fines from the Tax department in coming years.
3 – Rules for settling tax in some cases
- The resident that earns an income overseas and has pay personal income tax on that income overseas shall have the tax paid overseas deducted.
- The person earns incomes form wages and has been present in Vietnam in the first calendar year for fewer than 183 days, but has been present in Vietnam for 183 days or more within12 consecutive months from the date of arrival, the first tax period is the 12 consecutive months from the date of arrival, the second year, the tax period is the calendar year.
4 – Free counsel for Legal ground on cashbook reports
- According to the Laws on VAT invoices, the seller should a issue lawful invoice for any service or goods sold and the buyer’s responsibility to collect and keep the invoices. Actually, many representative offices did not believe the rules and have dealt with the tax inspection with very disaster lessons.
- After every 3 to 5 years of office operating, the Vietnam Tax Department will require your office to provide cashbooks – petty cash, bank statements, and all related vouches – lawful invoices – employees profile, proper salary payrolls for tax inspection:
- How much the fund from headquarter over the years of operation.
- How much the paid expenditures.
- How much the paid salary and insurances.
- If the paid expenditures are in line with allowed the activities of the office? If the paid expenditures proved by the lawful invoices? If not, there will be tax arrears and fines.
- If the paid salary has lawful labor records? If not, there will be tax arrears and fines.
5 – Free counsel for Legal ground on representative office license extension
- Fail to extend the license on time means you operate your business without a license, this is a serious violation on local laws and impact to your office good standing in Viet Nam.
- There are many reasons may prevent you to extend the license properly, and you should prepare in advance at least 03 months. It would take time to prepare for the papers and dossiers for the extension. Moreover, the officers will audit your previous operations, tax declaration and settlement and other condition before making a decision that your office will be extended or not, new period will be 1 years or 5 years.
6 – Free Counsel and support the chief in managing representative offices operations in Vietnam
- Managing establishment – renewal and adjustment licenses, annual operation report end year.
- Managing employment relations – salaries – compulsory insurances.
- Managing personal income tax and inspection procedures from the tax department.
- Accounting reports and required invoices.
- Closuring and upgrade representative office in to subsidiary.
- Updating new laws and regulations on representative office and expat.
Please feel free to contact us for a meeting online or offline counsel, we do believe our expertise will bring mile – stones that help you comply properly and optimally with the local laws and regulations.
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