Worldwide transfer pricing reference guide 2014

Vietnam (continued)
APA opportunity (continued)
• APA period: An APA can be effective up to five years with a renewal of a maximum of five years
• Competent authorities: The MoF gives final approval of APAs, with the GDT being in charge of signing off the APA application. The
provincial tax departments assist in negotiating, processing and monitoring the APA application within their authority ►
• Database: Data and database use for price/profit margin analysis must be publicly recognized with the specified hierarchy of preference
• Confidentiality: Information confidentiality is to be observed by both taxpayer and tax authorities. All information/documents provided
during the APA application process shall not be used as evidence for further tax audit, tax inspection, and tax imposition on the
taxpayers
• Compliance after APA sign-off: Taxpayers are required to follow-up on annual reports to demonstrate compliance with the agreed
APA terms
• Flexibility: Revision options available in case material assumptions established in the APA change and the agreed APA can be also
used as a benchmark to revise declared prices/profit margins for past years to avoid tax penalties in accordance with the Law on Tax
Administration
• Independent consultants: Both taxpayers and tax authorities are entitled to hire independent consultants to assist them during the APA
process
Under the Circular 201, the APA application process covers the following steps:
• Application for consultation prior to official application for an APA (i.e., pre-filing consultation) — This pre-filing process is required with a
prescribed form along with an exhaustive list of documents to be submitted. There is no specific timeline for this step. The official result
of consultation is issued by the GDT within 30 working days of the end of the consultation process
• Formal application for APA — An eligible taxpayer may make an official application for an APA in the prescribed form along with
documents required and processing fee. Official application for an APA must be submitted within 120 days of receipt of written approval
from the GDT. An extension of 30 calendar days is available under reasonable circumstances
• Evaluation of APA application dossier — Meeting for discussion on working schedule between the GDT and taxpayers is organized within
15 calendar days of official application. The maximum period of time for the GDT to evaluate the application is 90 calendar days, with
possible extension of 60 calendar days under reasonable circumstances
• Negotiation between tax authorities and tax payers — There is no specific timeline for negotiation process
• Sign-off and implementation of the APA
Expected reaction to OECD Report on BEPS
Vietnam authorities issued Circular 205/2013/TT-BTC, effective 6 February 2014, providing rules on the applicability of tax treaty
benefits and general anti-abuse rules (GAAR). The most salient changes from the previous circular are the introduction of GAAR and
the assertion and expansion of the beneficial ownership provisions. Generally, a tax treaty benefit will be denied if the main purpose of a
transaction or arrangement is tax abusive and/or if a treaty benefit claimant is not a true beneficial owner.
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