Question

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Legal status and tax declaration of a representative office in Vietnam ?

Legal status of a Representative office: 

A representative office (RO) is a dependent unit of an enterprise, it has the task of acting as the authorized representative in the interests of the enterprise and protecting such interests (Clause 2 Article 45 Law on Enterprises No. 68/2014/QH13 dated 11/26/2014). 

Each representative office is an affiliate other than a juridical person. Each representative office shall perform its duties as authorized representative within the authorized scope and for the juridical person's interests. A juridical person shall have civil rights and obligations arising from civil transactions established and performed by its representative offices (Article 84 the Civil Code No. 91/2015/QH13 dated 11/24/2015). 

Tax declaration of a Representative office in Vietnam:

Representative offices of foreign traders under the Commercial Law

The operation of a representative office shall be solely confined to conducting liaison activities, market research, and promotion of its head office’s businesses (Article 30 Decree No. 07/2016/ND-CP dated 01/25/2016). So, such a representative office shall only declare and pay personal income tax (PIT) on employees’ incomes under the Law on Personal Income Tax and regulations. 

Representative offices of companies incorporated in Vietnam (include foreign invested companies)

VAT declaration: Where the taxpayer has an affiliate in another province than the taxpayer’s head office, the affiliate shall directly submit the VAT declaration to the supervisory tax authority. If the affiliate does not sell anything and thus does not earn any revenue, tax shall be declared at the taxpayer’s head office (Point c Clause 1 Article 11 Circular 156/2013/TT-BTC dated November 06, 2013). 

Declaration of Corporate Income Tax (CIT): Where the taxpayer has an affiliate that does not keep accounting records independently, such affiliate is not required to submit tax declarations. The taxpayer must include the tax incurred by the affiliate in the CIT declaration (Point c Clause 1 Article 12 Circular 156/2013/TT-BTC dated November 06, 2013).

Declaration of Business Licence Tax (CIT): If the taxpayer has an affiliate in the same province, the tax declarations of the affiliate may be submitted to the taxpayer’s supervisory tax authority. If the taxpayer has an affiliate in another province, the tax declarations of the affiliate shall be submitted to the supervisory tax authority of the affiliate (Clause 1 Article 17 Circular 156/2013/TT-BTC dated November 06, 2013). 

Declaration of Personal Income Tax (PIT): In case the company shall sign labor contracts and pay salaries to employees who are assigned to work at a representative office, PIT shall be declared and paid at the head office in accordance provisions for declaration of PIT mentioned in Article 16 Circular 156/2013/TT-BTC dated November 06, 2013)./.

Related topics:

Legal representatives of a company in Vietnam

Setting up a representative office in Da Nang, Vietnam

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Phone: 0914 165 703 

Email: dmslawfirm@gmail.com

DMS Law firm in Vietnam
Director
(Signed)
Lawyer Do Minh Son