Circular 06/2021/TT-BTC of the Ministry of Finance guiding the implementation of a number of articles of the Law on Tax Administration

On November 5, 2020, the Government issued Decree No. 132/2020/ND-CP regulating tax management for enterprises with associated transactions. This Decree regulates the principles, methods, and procedures for determining factors that form transaction prices; the rights and obligations of taxpayers in determining the price of related transactions, declaration procedures, and responsibilities of state agencies in tax administration for taxpayers with related transactions.

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Regarding the scope of regulation, Article 1 of the Decree specifically stipulates: Transactions within the scope of regulation of this Decree are transactions of buying, selling, exchanging, renting, leasing, borrowing, lending, transferring, transfer of goods and provision of services; borrowing, lending, financial services, financial guarantees and other financial instruments; buying, selling, exchanging, renting, leasing, borrowing, lending, transferring, transferring tangible assets, intangible assets and agreements to buy, sell, and use resources such as assets, capital, labor, and sharing Expenses between parties with associated relationships, except for business transactions for goods and services within the scope of State price adjustment, which are carried out in accordance with the law on prices.

This Decree takes effect from December 20, 2020 and applies from the 2020 corporate income tax period. Decree No. 20/2017 and Decree 68/2020 expire.

Transitional regulations on declaration and settlement of corporate income tax in 2017 and 2018 (in Decree 68/2020) continue to be similar to Article 22 of Decree 132/2020.

For loan interest expenses when finalizing the 2019 corporate income tax, it will be transferred to the next period according to the provisions of Decree 68/2020. The time for transferring loan interest expenses shall be calculated continuously for no more than 5 years from the 2020 corporate income tax period. After 5 years, if the transfer is not completed, it cannot be transferred to the next tax period.

Decree 132/2020 also promulgates accompanying Appendices including:

• Appendix I: declaration of information on affiliate relationships and joint transactions with instructions for declaring a number of indicators;
• Appendix II: declaration List of information and documents that need to be provided in the national profile;
• Appendix III: declaration List of information and documents that need to be provided in the global profile;
• Appendix IV: Declaration of information on cross-country profit reporting with instructions for declaring a number of indicators.
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