Ms. Nguyen Thi Anh (in Hanoi) would like to ask: does the project management unit set up to manage projects using non-governmental aid (having establishment decision, opening bank account) need to do procedures to open tax code? If yes, what are the procedure? What are the rules for periodic project reports?

Regarding this issue, Hanoi Tax Department has the following opinions:

Pursuant to the Circular No. 95/2016 / TT-BTC ofthe Ministry of Finance dated June 28, 2016, guiding tax registration:

In Clause 1, Article 2, regulations on the subjects of application: “1. Taxpayers are enterprises, organizations and individuals below:

... d) Organizations established by competent authorities without production or business operation but taking on liabilities to government budget (hereinafter referred to as other entities).”.

Article 6 stipulates the deadline for submitting tax documents: “Each taxpayer shall register for tax within the time limits prescribed in Article 22 of the Law on Tax administration, in particular:

1. Each of business entities and other entities engaging in business shall register for tax within 10 working days from:

- The date on which the responsibility for withholding and remitting tax payment on behalf of a foreign contractor or subcontract is taken on; or the responsibility for tax payment on behalf of an individual as specified in a contract or business cooperation contract is taken on.

2. When an entity or an individual not engaging in business takes on liability to government budget or is eligible for tax refund, it/he/she shall register for tax within the time limit for filing of tax return or initial filing of tax refund as prescribed in the Law on Tax administration.”.

In Clause 1, Clause 6, Article 7 stipulating the application for tax registration:: “1. Taxpayers being business entities or other entities shall submit applications as prescribed in Point b and Point c Clause 1 Article 2 of this Circular

a) With regard to managing entities, the application includes:

- A tax registration form using Form No. 01-DK-TCT and lists (if any) issued herewith;

- A copy (no authentication required) of the business registration certificate, establishment decision, or equivalent license issued by competent authorities, or business registration certificate as prescribed in the neighbor country on land with Vietnam (regarding organizations in the neighbor country on land with Vietnam that conduct sale or barter at border marketplaces, checkpoint marketplaces, marketplaces in checkpoint economic zones of Vietnam).

... 6. With regard to taxpayers not taking on tax liabilities but eligible for tax refund (except for diplomatic missions, consular offices and representatives of international organizations in Vietnam) prescribed in Point dd Clause 1 Article 2 and entities not engaging in business but taking on tax liabilities, the application includes::

A tax registration form using Form No. 01-DK-TCT issued herewith (only filling in items: 1, 2, 3, 4, 9, 10, 12, 14, 15).

Article 8 of the provisions on places for filing tax registration dossiers: " Locations of tax registration application submission shall be in accordance with Article 24 of the Law on Tax administration, in particular:...

3. Other entities shall submit applications at:

a) Department of Taxation’s premises where they have their head offices located (for entities established under decisions of central government bodies and bodies of provinces).

Based on the above provisions, in case the project management unit uses non-governmental aids, is not a business organization, does not generate revenue, but has an obligation to the State budget (paying taxes or tax refund), it must register tax, records that complies with Article 7 of Circular No. 95/2016 / TT-BTC of the Ministry of Finance.

Locations of application submission are guided in Article 8 of the Circular No. 95/2016 / TT-BTC above.

Regarding personal income tax declaration (if the responsibility for personal income tax withholding) arises under Article 16 of the Circular No. 156/2013 / TT-BTC, amended and supplemented in Article 21 of the Circular No. 92 / 2015 / TT-BTC.

Refund of value-added tax (if using non-governmental aid capital to purchase goods or services in Vietnam to serve projects approved by competent authorities) complies with Article 51 of the Circular Circular 156/2013 / TT-BTC.

In case no obligation arises to the State budget, tax registration is not required.

If you still have any questions, please contact the supervisory tax authority for specific instructions