On June 18, 2021, The Ministry of Finance issued Circular No 45/2021/TT-BTC guiding the application of the Advanced Pricing Agreement (APA) mechanisms in tax administration for enterprises that have associated transactions.
Accordingly, the regulations of APA proposing transactions as follows:
– APA proposing transactions are associated transactions specified in Clause 2, Article 1 Decree No 132/2020/ND-CP.
Currently, APA transactions are business transactions between sides that have associated relationships, except business transactions concerning goods, services subject to price stabilization within the scope of the State’s regulation in accordance with provisions of the law on prices.)
– APA proposing transactions must meet all of the following conditions:
+ Transactions have in fact arisen in the tax payer’s production and business activities and will continue to take place during the APA proposing period.
+ Transactions have a basis for determining the nature of the transaction, which decides the tax liability, and a basis for analysis, comparison and selection of independent comparables according to the provisions of Articles 6 and 7 of Decree 132/2020/ND-CP, based on information and data in compliance with the provisions of Point b, Clause 6, Article 42 of the Law on Tax Administration.
+ Transactions are not subject to tax disputes or complaints.
+ Transactions are made transparently, not for the purpose of evading, avoiding taxes or taking advantage of Tax Agreements.
Circular No 45/2021/TT-BTC will be in effect from August 3, 2021 and will replace Circular No 201/2013/TT-BTC on December 20, 2013.