On 19 October 2020, the Government issued Decree 126/2020/ND-CP ("Decree 126") providing further guidance on the implementation of Law on Tax administration 2019. This Decree takes effect from 05 December 2020 and will abolish the previous guidances on tax administration, as well as the previous forms used for tax declaration.

Key guidances in Decree 126 are as below:

On the supplement declarations:

• If the supplement does not impact on the taxpayer's tax liability, the taxpayer only need to submit an explanation letter and supporting documents, the supplement declaration is not required.
• If the tax finalization dossier is already filed, the taxpayer only need to file the amended tax finalization dossiers; except for the case of amending Personal Income Tax ("PIT") finalization by the employers. In such case, the corresponding monthly and quarterly supplement declarations must be prepared and submitted.

On the provisional payment of Corporate Income Tax ("CIT")

The total amount of provisional CIT paid in the first 3 quarters of a tax year must not be less than 75% of the total CIT liability for the year based on tax finalization. If the provisional quarterly CIT payments in the first 3 quarters account for less than 75% of the final CIT liability, late payment interest will impose on the shortfall, calculating from the due date of the provisional payment for the third quarter until the settlement date.

On the frequency of filling Value Added Tax ("VAT") and PIT returns

• Taxpayer is eligible for quarterly filling of VAT returns either if it is in its first year of business operation, or the total revenue in the previous calendar year is VND 50 billion or less.
• Taxpayer, who is eligible for quarterly filling of VAT return, can opt to declare PIT on quarterly basis.
• The quarterly tax declaration is determined once from the first quarter and is applied consistently throughout calendar year.
• In case taxpayer is applying the monthly filling, but is eligible for and wishes to change to quarterly filling, the taxpayer must send a written request to its managing tax authority no later than 31 January of the year with quarterly filling. Otherwise the taxpayer must continue its monthly filling.

On places to file tax returns

• Supplement cases where the taxpayers with business activities in different provinces must separately declare tax at each location as follows:

• • VAT returns for investment projects shall be filed at the place where the investment projects are carried out;
  • VAT returns shall be filed by dependent branches and business locations which enjoy CIT incentives;
  • Business License fee shall be declared at the place where dependent branches and business are located…

• If the individual has employment income from two different sources and more (including both cases where the income is subject to PIT declaration under personal tax code and PIT declaration under company tax code) and subject to carry out PIT finalization under individual’s tax code, tax returns shall be filed at the managing tax authority where the highest source of income is declared. In case the highest source of income cannot be identified, the taxpayer can choose to file PIT returns either at the managing tax authority of the income payer or at the taxpayer's place of residence.

On the responsibility of banks and payment intermediary service companies for withholding and paying tax on behalf of overseas suppliers who have no permanent establishment in Vietnam but conduct e-commerce or digital-based business activities and derive income from individual customers in Vietnam.

• General Department of Taxation shall identify, provide the names and websites of overseas suppliers who have not made tax registration, declaration and payment to banks and payment intermediary service companies. Based on this, banks and payment intermediary service companies are responsible for identifying the overseas suppliers' bank accounts and withhold tax on the payment to these bank accounts, on a monthly basis.
• In case payment is made by individuals’ cards or by the other methods under which banks and payment intermediary service companies cannot withhold tax, banks and payment intermediary service companies are required to report such payments to General Department of Taxation on a monthly basis.