Refunding advance payments to a partner is a complex process that necessitates strict adherence to legal regulations. Therefore, it’s imperative for businesses to approach this task with care and precision. This procedure is pivotal in maintaining transparency and trust in business relationships. In the following discussion, we will delve into the precise procedures and guidelines for executing the refund of advance payments to a partner while ensuring unwavering compliance with the law. Acquiring a comprehensive understanding of these steps is crucial for businesses to uphold their integrity and fulfill their legal obligations.
Question:
Our company has a contract with Company A for handling all customs export services, including container towing and customs declaration. Company A invoices us for these services, and we make payments through bank transfers. Additionally, Company A advances payment for container lifting and lowering during customs processing at the port, with the port issuing the invoice.
I want to ask: Can we pay the expenses that Company A advances to us through a bank transfer from our company’s account to Company A’s account? Or do we need to make a cash payment (since Company A is not issuing the invoice)?
Answer:
Based on Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015 issued by the Ministry of Finance, which provides guidance on Corporate Income Tax (CIT) and came into effect from August 6, 2015, the following provisions amend and supplement Article 6 of Circular No. 78/2014/TT-BTC. The amended and supplemented provisions can be found in Point 2 of Article 6 of Circular No. 119/2014/TT-BTC and Article 1 of Circular No. 151/2014/TT-BTC:
In the circumstance where our company leases the services of Company A to perform customs export tasks (such as container towing and customs declaration), and as agreed upon, Company A is to make an advance payment for container lifting and lowering fees at the port (with the port directly issuing the invoice to our company), it is essential to adhere to the following conditions when reimbursing Company A for the advance payment, excluding customs export service fees: Payment must be made through non-cash means if the invoice total equals or exceeds 20 million VND.
Conclusion
In conclusion, executing the proper refund of advance payments to a partner is a fundamental aspect of business operations that requires strict compliance with established regulations. By following the prescribed procedures, businesses can not only foster trust and confidence among their partners but also demonstrate their commitment to legal compliance and ethical conduct. To maintain the integrity of business relationships and uphold the principles of fairness and accountability in the corporate world, businesses must conduct refunds with precision, transparency, and full adherence to the law.
HMLF is always available to offer assistance in understanding the procedures with authorities.
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Phone number: +84 937215585
Website: hmlf.vn Email: miller@hmlf.vn
