Question:
Our company is headquartered in District 2, Ho Chi Minh City. We declare and pay taxes at the Tax Department of District 2, Ho Chi Minh City. To expand our business operations, we plan to open an additional branch under our company in Binh Thanh District, Ho Chi Minh City, and another branch in Binh Duong Province. We are currently deciding whether to apply for licenses for these two branches as dependent accounting or independent accounting branches. We request guidance from the Ho Chi Minh City Tax Department on the following:
- How should the tax obligations, including License Tax, VAT, Corporate Income Tax, and Personal Income Tax, for the two mentioned branches be carried out, and what is the procedure for each scenario (dependent or independent accounting branches)?
- When using electronic invoices for these two branches, should we register separately or use the same invoices as the parent company?
- When requesting tax finalization inspections for the two branches, which tax office should we contact?
Could you please clarify the differences between the two forms of Branches with dependent accounting and Branches with independent accounting? This information will help us decide how to apply for licenses for the two branches.
Answer:
– Based on Circular No. 156/2013/TT-BTC dated November 6, 2013, of the Ministry of Finance guiding the implementation of some provisions of tax management
-Circular No. 39/2014/TT-BTC dated March 31, 2014, of the Ministry of Finance on sales invoices and service supplyụ;
-Circular No. 302/2016/TT-BTC dated November 15, 2016, of the Ministry of Finance on license tax feesi.
-The tax obligations for your company’s branches in this situation are as follows::
a) For Dependent Accounting Branches:
- If the branch is located in the same province/city as the headquarters, you can use the same invoices as the headquarters. The headquarters will declare and pay license tax fees, VAT, Corporate Income Tax, and Personal Income Tax on behalf of the branch.
- If the branch has its own seal, bank accounts, directly sells goods or services, and maintains separate records for input and output VAT, it can choose to register and use separate invoices. However, for Corporate Income Tax and Personal Income Tax, the company’s headquarters will still declare these taxes centrally.
- In the case where a branch is located in a different province or city from the headquarters, the branch must notify and issue separate invoices. It should also submit the value-added tax (VAT), personal income tax (TNCN), and license tax documentation to the tax authority directly responsible for that branch. However, for corporate income tax (TNDN), the company should declare it centrally at the headquarters.
b) For Independent Accounting Branches: Whether the branch is in the same province/city as the headquarters or in a different one, the branch must issue separate invoices and declare/pay license tax fees, VAT, Corporate Income Tax, and Personal Income Tax to the tax office directly responsible for the branch.
