Regulations on VAT declaration for centrally-accounting companies.
According to the Tax Department's guidelines, if a company switches to a centralized accounting model at its head office, it can file a centralized VAT return for all operations of its branches, including those in other provinces. However, the company needs to meet the following conditions:
- Issue output VAT invoices for the production and business activities of the branch.
Ensure eligibility for input VAT deduction. for branch operations.
In addition, the company must VAT allocation to localities location where the production facility is located as stipulated in Articles 12 and 13 of Circular 80/2021/TT-BTC.
Here's a real-world example:
If the parent company has branches in Province B and these branches all use invoices issued by the parent company, the company can file a consolidated tax return at the head office and allocate the tax to Province B if all conditions for input tax deduction are met.
Regulations on VAT declaration for branches that sell goods themselves.
In contrast to the centralized accounting model, if a branch directly sells goods and uses invoices registered by the branch with the tax authorities, the branch will have to... Self-accounting for output and input VAT its own. Then, the branch will Declare and pay VAT to the tax authority directly managing the branch..
This means that the branch must carry out all tax declaration and payment procedures separately at the tax authority of the province where the branch operates.
Here's a real-world example:
A branch in Province C, if it sells goods independently and uses invoices issued by the branch, will need to file its own tax return and pay taxes to the tax authority of Province C.
VAT declaration for business cooperation contracts
For companies that enter into a business cooperation contract (BCC) with an organization but do not establish a separate legal entity, the company will have to VAT declaration separately of the business cooperation contract as agreed in the contract.
The company should note that, even though the branch does not establish a separate legal entity, it must still comply with regulations regarding separate tax declarations for business cooperation contracts, in order to ensure transparency and compliance.
Notes on implementation and consequences of incorrect declaration.
Businesses need to pay special attention when filing VAT returns for branches outside the province. Incorrect or incomplete declarations can lead to serious consequences, including administrative penalties. Decree 125/2020/ND-CP, If a business makes false declarations, the penalty can range from... 2-5 million VND depending on the severity of the violation.
Some common examples of penalties:
- Businesses that incorrectly declare the amount of tax payable or fail to allocate taxes according to regulations will be penalized according to the specific penalty levels of Decree 125.
- If there is intentional fraud in tax declarations, the penalties can be higher and will affect the company's reputation.
Conclude
In summary, VAT declaration for branches outside the province depends on the company's accounting model and the branch's operations. Businesses need to understand the regulations regarding general or separate tax declarations for each situation to ensure compliance with the law and avoid unnecessary legal risks.
To protect the interests of businesses, a thorough understanding of tax regulations is crucial. Businesses should proactively determine their tax declaration model and follow the steps prescribed by law.
References:
- Circular 80/2021/TT-BTC, dated September 29, 2021, provides guidance on the implementation of the 2019 Law on Tax Administration.
- Decree 125/2020/ND-CP, dated October 19, 2020, stipulates administrative penalties for tax violations.
