What Are Tax Obligations of a Representative Office in Vietnam?

Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.

Representative office of foreign trader in Vietnam has the rights and obligations in accordance with the law of Vietnam. Foreign trader is responsible before the law of Vietnam for all operations of its representative office in Vietnam.

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Accordingly, representative office in Vietnam is not allowed to conduct business activities, nor carry out other activities for profit-generating purposes. The representative office in Vietnam only performs the activities for the right purposes, scope and duration specified in the certificate to establish the representative office. Besides, the representative office in Vietnam has the right to rent the head office, rent and buy the facilities and materials necessary for the operation of the representative office; to recruit Vietnamese and foreign employees to work at the representative office in accordance with the provisions of Vietnamese law; to use an account in foreign currency, in Vietnam dong of foreign currency origin opened by a foreign trader at a bank licensed to operate in Vietnam and only use this account for the operation of the representative office; to have a seal bearing the name of the representative office according to the provisions of Vietnamese law. Representative office in Vietnam can sign contracts, perform transactions with partners when authorized by the enterprise.

Hence, due to the limited scope of activities, the tax liability of a foreign representative office in Vietnam is narrower than that of an enterprise.  As the representative office does not produce or trade in goods and services, it is not required to pay license fees as prescribed. Representative office of foreign trader in Vietnam is dependent unit of foreign trader, established to investigate the market and carry out some trade promotion activities permitted by Vietnamese law, does not carry out production and business activities, so it is not required to pay license fees.

The fact that the representative office has the right to recruit Vietnamese or foreign employees to work at the office is the basis for arising personal income tax obligation. At the same time, representative office of foreign organization is subject to personal income tax registration. For employees working at foreign representative office in Vietnam, the taxable incomes are based on salaries and wages. Declaring, with holding, paying taxes and settling personal income tax of employees working at foreign representative office is the responsibility of such representative office.

ANT Lawyers, a law firm in Vietnam with offices in Hanoi, Da Nang and Ho Chi Minh City could help client to set up representative office in Vietnam and advise on the compliance on regular basis.

Source ANTLawyers:  https://antlawyers.vn/library/what-are-tax-obligations-of-a-representative-office-in-vietnam.html 

Source: ANT Lawyers.vn

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What Are Tax Obligations of a Representative Office in Vietnam?

Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.

Representative office of foreign trader in Vietnam has the rights and obligations in accordance with the law of Vietnam. Foreign trader is responsible before the law of Vietnam for all operations of its representative office in Vietnam.

Accordingly, representative office in Vietnam is not allowed to conduct business activities, nor carry out other activities for profit-generating purposes. The representative office in Vietnam only performs the activities for the right purposes, scope and duration specified in the certificate to establish the representative office. Besides, the representative office in Vietnam has the right to rent the head office, rent and buy the facilities and materials necessary for the operation of the representative office; to recruit Vietnamese and foreign employees to work at the representative office in accordance with the provisions of Vietnamese law; to use an account in foreign currency, in Vietnam dong of foreign currency origin opened by a foreign trader at a bank licensed to operate in Vietnam and only use this account for the operation of the representative office; to have a seal bearing the name of the representative office according to the provisions of Vietnamese law. Representative office in Vietnam can sign contracts, perform transactions with partners when authorized by the enterprise.

Hence, due to the limited scope of activities, the tax liability of a foreign representative office in Vietnam is narrower than that of an enterprise.  As the representative office does not produce or trade in goods and services, it is not required to pay license fees as prescribed. Representative office of foreign trader in Vietnam is dependent unit of foreign trader, established to investigate the market and carry out some trade promotion activities permitted by Vietnamese law, does not carry out production and business activities, so it is not required to pay license fees.

The fact that the representative office has the right to recruit Vietnamese or foreign employees to work at the office is the basis for arising personal income tax obligation. At the same time, representative office of foreign organization is subject to personal income tax registration. For employees working at foreign representative office in Vietnam, the taxable incomes are based on salaries and wages. Declaring, withholding, paying taxes and settling personal income tax of employees working at foreign representative office is the responsibility of such representative office.

ANT Lawyers, a law firm in Vietnam with offices in Hanoi, Da Nang and Ho Chi Minh City could help client to set up representative office in Vietnam and advise on the compliance on regular basis.

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What Are Tax Obligations of a Representative Office in Vietnam?

Vietnam-based representative office of a foreign trader means a dependent unit of the foreign trader, which is established under the provisions of Vietnamese law to conduct market survey and a number of commercial promotion activities permitted by Vietnamese law.

Representative office of foreign trader in Vietnam has the rights and obligations in accordance with the law of Vietnam. Foreign trader is responsible before the law of Vietnam for all operations of its representative office in Vietnam.

 

Accordingly, representative office in Vietnam is not allowed to conduct business activities, nor carry out other activities for profit-generating purposes. The representative office in Vietnam only performs the activities for the right purposes, scope and duration specified in the certificate to establish the representative office. Besides, the representative office in Vietnam has the right to rent the head office, rent and buy the facilities and materials necessary for the operation of the representative office; to recruit Vietnamese and foreign employees to work at the representative office in accordance with the provisions of Vietnamese law; to use an account in foreign currency, in Vietnam dong of foreign currency origin opened by a foreign trader at a bank licensed to operate in Vietnam and only use this account for the operation of the representative office; to have a seal bearing the name of the representative office according to the provisions of Vietnamese law. Representative office in Vietnam can sign contracts, perform transactions with partners when authorized by the enterprise.

Hence, due to the limited scope of activities, the tax liability of a foreign representative office in Vietnam is narrower than that of an enterprise.  As the representative office does not produce or trade in goods and services, it is not required to pay license fees as prescribed. Representative office of foreign trader in Vietnam is dependent unit of foreign trader, established to investigate the market and carry out some trade promotion activities permitted by Vietnamese law, does not carry out production and business activities, so it is not required to pay license fees.

The fact that the representative office has the right to recruit Vietnamese or foreign employees to work at the office is the basis for arising personal income tax obligation. At the same time, representative office of foreign organization is subject to personal income tax registration. For employees working at foreign representative office in Vietnam, the taxable incomes are based on salaries and wages. Declaring, withholding, paying taxes and settling personal income tax of employees working at foreign representative office is the responsibility of such representative office.

ANT Lawyers, a law firm in Vietnam with offices in Hanoi, Da Nang and Ho Chi Minh City could help client to set up representative office in Vietnam and advise on the compliance on regular basis.

 

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Withdrawal of request for investigating of anti-dumping on welding material products originating from China, Thailand and Malaysia

Welding material is one of the most important industrial auxiliary sector, which is indispensable to fields such as: shipbuilding, cars and motorbikes production, other electronic industries. In the first 7 months 2019, Ministry of Industry and Trade carried out examination dossiers of 3 cases, one of them is dossier requesting to investigate to apply anti-dumping measure on welding material.

 

On Jun 28^th, 2019, Trade Remedies Authority of Vietnam (Investigating Body) received the Dossier requesting for investigating to apply anti-dumping measure on welding material products originating from People’sRepublic of China, Kingdom of Thailand and Malaysia. This dossier is applied by companies representing the domestic industry (Requesting Party

Requesting Party includes 01 company: Kim Tin Group Joint Stock Company. Kim Tin Group Joint Stock Company is a large enterprise in manufacturing and trading of welding materials: welding rods, welding wire, welding flux, color metal, steel nails, ligature, machines, devices, board of MDF, mineral exploitation and logistics service in Vietnam.

On Oct 28^th, 2019, Requesting Party fully submitted additional information at request.

On Nov 07^th, 2019, Investigating Body confirmed that Dossier was complete, valid according to regulations of law on trade remedies. 

On Jan 25^th, 2020, Trade Remedies Authority received official dispatch of Requesting Party on withdrawing dossier requesting for investigating to apply anti-dumping measure on welding material products.

Due to Requesting Party’ s request for withdrawing dossier, Trade Remedies Authority informed that no investigation to apply anti-dumping measure on welding material products originating from People’s Republic of China, Kingdom of Thailand and Malaysia is initiated.

Our international trade and tax lawyers, and antitrust lawyers at ANT Lawyers, a law firm in Vietnam have always followed the development of situation and update the clients on relevant matters.

 

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Anti-dumping Case AD06 Relating to Fiberboard of Wood Products Ended

Requesting Party of Anti-dumping case AD06 comprises of 04 companies representing the domestic industry: (i) VRG Kien Giang MDF Joint Stock Company; (ii) VRG Dongwha MDF Joint Stock Company; (iii) MDF VRG – Quang Tri Wood Joint Stock Company and (iv) Kim Tin MDF Joint Stock Company. Requesting Party accused fiberboard of wood imported from Thailand and Malaysia of having been dumped into Vietnam market with dumping margins from 18,59% to 50,6% and this dumping is the main cause of significant injury to manufacturing of industrial wooden planks of Vietnam.

Products under investigation: some fiberboard of wood or other ligneous materials, whether or not assembled with glue or other organic adhesives, uncoated and unwrought, with the HS codes 4411.12.00, 4411.13.00, 4411.14.00, 4411.92.00, 4411.93.00, 4411.94.00 originated from Thailand and Malaysia.

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The investigating period: (1) The investigating period to determine dumping activities: from Jan 01^st, 2018 to Dec 31^st, 2018; (2) The investigating period to determine the damages of the domestic industry: from Jan 01^st, 2015 to Dec 31^st, 2018.

On Oct 23^th, 2018,  Trade Remedies Authority of Vietnam (TRAV) received Dossier of request for investigation, application of anti-dumping measures.

TRAV has issued official dispatch No. 963/PVTM-P1 dated Nov 6^th, 2018 and official dispatch No. 48/PVTM-P1 dated Jan 16^th, 2019, requiring the Requesting Party to supplement the dossier.

On Jan 27^th, 2019, Requesting Party fully supplemented the required information.

On Feb 01^st, 2019, Investigating authority issued official dispatch No. 105/PVTM-P1 confirming that Dossier is valid, complete and send letter to Royal Thai Embassy and Embassy of Malaysia in Vietnam, informing about the receipt of complete and valid dossier.

On Mar 18^th, 2019, the Ministry of Industry and Trade issued Decision No. 623/QD-BCT on the extension of the decision of investigation for another 30 days.

On Apr 18^th, 2019, the Ministry of Industry and Trade issued Decision No. 940/QĐ-BCT on investigation of the application of anti-dumping measures on fiberboard of wood products or other ligneous materials, whether or not assembled with glue or other organic adhesives, uncoated and unwrought, originated from Thailand and Malaysia (case number AD06).

On May 02^nd, 2019, Investigation Questionnaire is issued for domestic importers, producers and foreign exporters, producers in AD06 case. The time limit to answer Investigation Questionnaire is 17h00, Jun 10^th, 2019 (Hanoi time).

To ensure relevant enterprises’ rights and interests, the Investigation authority asks that all of relevant domestic importers, producers should participate to fully cooperate throughout the investigation of the case. The contents’ Investigation Questionnaire shall be basis for the Investigation Body to consider the conclusion.

On Jan 14^th, 2020, Minister of Industry and Trade signed the decision of termination the investigation and no application anti-dumping measures on some fiberboard of wood products (fiberboard of wood MDF) imported from Thailand and Malaysia.

Over 7 months of investigation according to regulations of World Trade Organization, Law on foreign trade management 2017 and other relevant regulations, Ministry of Industry and Trade has examined and carefully evaluated the losses of domestic industry, level of dumping of producers from Thailand and Malaysia, as well as considered and calculated the impact on the industry and consumers of fiberboard of wood products. The results of investigation show that the domestic industry has not been significantly damaged or threatened to be significantly damaged because of imported goods from Thailand and Malaysia.

Therefore, according to regulations of Vietnam law relating to trade remedies and Anti-Dumping Agreement of World Trade Organization, Ministry of Industry and Trade decided not to apply anti-dumping measures on fiberboard of wood products imported from Thailand and Malaysia. Ministry of Industry and Trade will coordinate with the relevant authorities to watch closely the import situation, sign of dumping of foreign producers/exporters as well as operation, production and trading reality of domestic fiberboard of wood industry to recommend the necessary measures according to regulations.

Our international trade and tax lawyers in Vietnam, and antitrust lawyers in Vietnam at ANT Lawyers, a law firm in Vietnam have always followed the development of situation and update the clients on relevant matters.

 

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