The Thanh Hoa province branch is a subordinate branch located in a different province from the main headquarters. It conducts accounting activities centrally at the main headquarters. The branch does not have its own seal, separate bank accounts, does not directly sell products, and does not use separate invoices as these are issued by the registered headquarters.

Mrs. Loan's company is required to declare, calculate, and submit tax declaration documents to the directly managing tax authority (Thanh Xuan Tax Department). The company also needs to allocate the tax amount to be paid to each province where business activities are conducted (Hanoi City and Thanh Hoa province).

Mrs. Loan inquires about whether the methods of allocation, tax declaration, tax calculation, and tax settlement for various taxes are carried out according to the regulations stated in Articles 13, 17, and 19 of Circular No. 80/2021/TT-BTC dated September 29, 2021, by the Ministry of Finance.

The Ministry of Finance responds to this matter as follows:

Referring to Article 45 of the Tax Management Law No. 38/2019/QH14 dated June 13, 2019, issued by the National Assembly, which specifies the location for submitting tax declaration documents:

"Article 45. Location for submitting tax declaration documents

Taxpayers shall submit tax declaration documents to the directly managing tax authority.

... 4. The government stipulates the location for submitting tax declaration documents in the following cases:

a) Taxpayers engaged in multiple production and business activities.

b) Taxpayers conducting production and business activities in multiple provinces; taxpayers incurring tax obligations for various tax types to be declared and paid for each incidence;…".

Based on Article 2 of Clause 11 of Decree No. 126/2020/NĐ-CP dated October 19, 2020, issued by the Government, which provides detailed regulations on some provisions of the Tax Management Law No. 38/2019/QH14 dated June 13, 2019, concerning the location for submitting tax declaration documents:

"2. The location for submitting tax declaration documents for taxpayers engaged in activities and businesses across multiple provincial areas other than the location of their main headquarters, as stipulated in Point b, Clause 4 of Article 45 of the Tax Management Law, is to carry out centralized accounting at the main headquarters (except for cases stipulated in Clause 1, Clause 3, Clause 4, Clause 5, and Clause 6 of this Article) at the tax authority managing the main headquarters. Additionally, taxpayers must submit a tax allocation table (if applicable) for each provincial area where state budget revenue is enjoyed (including dependent units, business locations) to the tax authority managing the main headquarters,…"

Based on Circular No. 80/2021/TT-BTC dated September 29, 2021, by the Ministry of Finance, providing guidance for implementing certain provisions of the Tax Management Law and Decree No. 126/2020/NĐ-CP:

In Clause 8 of Article 3, explanations of terms are provided: "8. 'Dependent units' include branches, representative offices."

In Article 12, Clause 1, provisions regarding the allocation of tax obligations for taxpayers practicing centralized accounting with dependent units and business locations in provinces other than the location of their main headquarters are as follows:

"Article 12. Allocation of tax obligations for taxpayers practicing centralized accounting with dependent units and business locations in provinces other than the location of their main headquarters

1. Taxpayers engaged in activities and businesses across multiple provincial areas other than the location of their main headquarters shall carry out centralized accounting at the main headquarters in accordance with Article 11, Clause 2 and Clause 4 of Decree No. 126/2020/NĐ-CP, perform tax declaration, tax calculation, and submit tax declaration documents to the directly managing tax authority, and allocate the tax amount to be paid to each province where business activities are conducted…"

In Article 13, provisions concerning tax declaration, tax calculation, tax allocation, and submission of value-added tax are stated:

"Article 13. Tax declaration, tax calculation, tax allocation, and submission of value-added tax

1. Cases eligible for allocation:

… d) Dependent units, business locations that are manufacturing establishments (including processing and assembly facilities), except for cases stipulated in Point c, Clause 1 of Article 11 in Decree No. 126/2020/NĐ-CP;

… 2. Allocation method:

… 3. Tax declaration, tax payment:

4.  For dependent units directly selling products, using invoices issued by the dependent unit or registered by the taxpayer with the tax authority overseeing the dependent unit, and fully tracking the input and output value-added tax in accounting, the dependent unit shall declare and pay value-added tax to the directly managing tax authority of the dependent unit…".

Regulations on Corporate Income Tax Declaration and Payment, Personal Income Tax Declaration and Payment

In Article 17, provisions regarding the declaration, tax calculation, tax settlement, allocation, and payment of corporate income tax are as follows:

"Article 17. Declaration, Tax Calculation, Tax Settlement, Allocation, and Payment of Corporate Income Tax

1. Cases eligible for allocation:

… c) Dependent units, business locations that are manufacturing establishments;

… 2. Allocation method:

… 3. Tax declaration, tax settlement, tax payment:…".

In Article 19, provisions concerning the declaration, tax calculation, allocation, and payment of personal income tax are stated:

"Article 19. Declaration, Tax Calculation, Allocation of Personal Income Tax

1. Cases of allocation:

a) Deducting personal income tax for income from salaries, wages paid at the main headquarters to employees working at dependent units, business locations in other provinces.

… 2. Allocation method:

a) Allocating personal income tax for income from salaries, wages:

… 3. Tax declaration, tax payment:

a) Personal income tax for income from salaries, wages: ...".

In Article 87, Clauses 1 and 2, stipulations regarding the enforcement are as follows:

"1. This Circular takes effect from January 1, 2022.

… The tax declaration forms prescribed in this Circular are applicable to tax periods starting from January 01, 2022 onwards. For the tax settlement of the 2021 tax period, the forms prescribed in this Circular shall also apply…".

Based on Clause 3, Article 1 of Decree No. 91/2022/NĐ-CP dated October 30, 2022, amending and supplementing certain provisions of Decree No. 126/2020/NĐ-CP dated October 19, 2020, by the Government detailing certain articles of the Tax Management Law:

"Article 1. Amendments and supplements to certain provisions of Decree No. 126/2020/NĐ-CP dated October 19, 2020, by the Government detailing certain articles of the Tax Management Law

… 3. Point b, Clause 6, Article 8 is amended and supplemented as follows: …".

Based on the above regulations, in the case where Mrs. Loan's company engages in activities and business in a provincial area other than where its main headquarters is located and practices centralized accounting at its main headquarters, the location for submitting tax declaration documents is the tax authority managing the main headquarters as stipulated in Clause 2 of Article 11 of Decree No. 126/2020/NĐ-CP issued on October 19, 2020, by the Government.

In the case where the branch of Mrs. Loan's company is a manufacturing establishment (including processing and assembly), the branch falls under the case of value-added tax allocation as prescribed in Clause 1 of Article 13 of Circular No. 80/2021/TT-BTC dated September 29, 2021, by the Ministry of Finance. The company performs tax declaration, tax calculation, tax allocation, and payment of value-added tax as stipulated in Clauses 2 and 3 of Article 13 of Circular No. 80/2021/TT-BTC.

In the case where the branch of Mrs. Loan's company is a manufacturing establishment, the branch falls under the case of corporate income tax allocation as prescribed in Clause 1 of Article 17 of Circular No. 80/2021/TT-BTC. The company performs tax declaration, tax calculation, tax settlement, allocation, and payment of corporate income tax as stipulated in Clauses 2 and 3 of Article 17 of Circular No. 80/2021/TT-BTC, which has been amended and supplemented by Clause 3 of Article 1 of Decree No. 91/2022/NĐ-CP dated October 30, 2022, by the Government.

In the case where Mrs. Loan's company pays salaries or wages to employees working at a dependent unit in a province other than where its main headquarters is located, the company falls under the case of personal income tax allocation as prescribed in Clause 1 of Article 19 of Circular No. 80/2021/TT-BTC. The company performs tax declaration, tax calculation, allocation, and payment of personal income tax as stipulated in Clauses 2 and 3 of Article 19 of Circular No. 80/2021/TT-BTC.

Mrs. Loan is advised to consider the actual situation and cross-reference relevant legal documents to ensure compliance. In specific cases, she is requested to provide related documentation regarding complications and contact the directly managing tax authority for guidance.