Official Dispatch No. 3706/TCT-KK dated July 17, 2016 of the General Department of Taxation on initiating and introducing new regulations of Circular No. 95/2016/TT-BTC on tax registration

THE MINISTRY OF FINANCE
THE GENERAL DEPARTMENT OF TAXATION

Official Dispatch No.3706/TCT-KK dated July 17, 2016 of the General Department of Taxation on initiating and introducing new regulations of Circular No. 95/2016/TT-BTC on tax registration

To:Departments of Taxation of provinces and central-affiliated cities.

With a view to improving capacity and effectiveness of management of registration, issuance of taxpayer identification numbers (hereinafter referred to as TIN), to enabling taxpayers to fulfill tax liabilities, to keeping reforming administrative procedures in the field of tax registration by the way of reducing procedures and items unnecessary on the tax registration from, and handling difficulties incurred by organizations and individuals during the implementation of tax registration, on June 28, 2016, the Ministry of Finance promulgates a Circular No. 95/2016/TT-BTC replacing Circular No. 80/2012/TT-BTC dated May 22, 2012, which comes into force from August 12, 2016.

With the purpose of facilitating and ensuring the consistency in initiation of regulations prescribed in the Circular, General Department of Taxation requests Departments of Taxation to implement the following regulations:

I. Regulations in the Circular on guidelines for tax registration to be initiated

1. Enable departments and employers to have a thorough grasp of the Circular regulations and raise awareness of taxpayers in administrative divisions of new regulations of Circular No. 95/2016/TT-BTC on guidelines for tax registration according to Appendix issued herewith.

2. Publish tax registration forms and guidelines for filling in tax registration forms at the Single window department and on the website of the tax authorities.

3. Promptly reply to difficulties encountered by taxpayers in terms of regulations specified in the Circular No. 95/2016/TT-BTC, provide taxpayers with guidelines for filling in tax registration forms, and applications and procedures for amendments to tax registration, business suspension, TIN deactivation and TIN reactivation upon requests of taxpayers.

II. Plans for upgrade of information technology system in accordance with Circular

1. Stage 1 (to be initiated in October 2016):

- Upgrade notification forms to be sent to taxpayers: Certificate of tax registration, tax identification number notification, certificate of individual tax registration, tax identification number notification of dependents, notification of employees’ TINs registered through employers,  notification of dependents’ TINs registered through employers, etc.

- Change the status 03 and reason 09 “make a getaway, go missing” to “non-operation at the registered address” (status 06”.

2. Stage 2 (to be initiated in quarter 1/2017): upgrade remaining information prescribed in the Circular No. 95/2016/TT-BTC.

III. Transitional tasks

1. During the period of time pending upgrade of tax registration system in accordance with the Circular No. 95/2016/TT-BTC, upon receipt of an application for tax registration, an application for amendments to tax registration information in accordance with new regulations, the tax authority shall insert information to the tax registration system according to old forms.

2. Using certificate of tax registration forms for organizations and individuals:

During the period of time pending upgrade of tax registration system in accordance with the Circular No. 95/2016/TT-BTC, General Department of Taxation shall keep printing certificates of tax registration (Form No. 10-MST) issued together with Circular No. 80/2012/TT-BTC and provide it for tax authorities. Each tax authority may keep using the certificate of tax registration form provided by General Department of Taxation to be printed and issued to taxpayers as prescribed.

3. Disclosure of tax registration information of taxpayers that fail to operate at the registered addresses and taxpayers that have their TINs reactivated in accordance with Points 1c and 1d Article 29 of the Circular No. 95/2016/TT-BTC:

The tax authority shall, after issuing a notification of non-operation at the registered address (Form No. 16/TB-DKT) and a notification of TIN reactivation (Form No. 19/TB-DKT) in accordance with the Circular No. 95/2016/TT-BTC, keep sending those notifications to tax authorities until the technology application is upgraded meeting requirements for information disclosure prescribed in the Circular No. 95/2016/TT-BTC.

4. Regarding applications for tax registration of taxpayers being managing entities, affiliated entities; applications for tax registration of executives, joint operating companies, joint ventures (managing entities) and bidders, investors engaging in petroleum contracts (affiliated entities):

The Circular No. 95/2016/TT-BTC stipulates that an affiliated entity only submit an application for tax registration to the tax authority in charge of administrative division where its head office is located (hereinafter referred to as tax authority of affiliated entity), the managing entity is not required to send a declaration to the supervisory tax authority as prescribed in previous regulations. In the period of time pending upgrade of tax registration system in accordance with the Circular No. 95/2016/TT-BTC, the tax authority of affiliated entity and the supervisory tax authority shall register for tax and issue the affiliated entity with a TIN as follows:

Step 1: - The tax authority (tax registration division) of affiliated entity shall, upon receipt of an application for tax registration as prescribed in the Circular No. 95/2016/TT-BTC, scan the tax registration form using Form No. 02-DK-TCT of the affiliated entity and sent it to the supervisory tax authority of its managing entity via mailing address of the office of tax return and tax accounting.

Step 2: - Supervisory tax authority of managing entity shall, upon receipt of the form No. 02-DK-TCT sent by tax authority of affiliated entity via email, insert the affiliated entity’s information in the form No. 07-TIN on the single tax management system (TMS) so as to the TMS update it to the list of affiliated entity and create a 13-digit TIN for the affiliated entity. The supervisory tax authority of managing entity shall make a notification of list of enterprise identification numbers/taxpayer identification numbers (EINs/TINs) of affiliated entities (Form No. 03/Qtr-DKT) issued together with procedures for tax registration, scan and send it to the supervisory tax authority of affiliated entity via email and not sent it to the managing entity.

Step 3: The supervisory tax authority of affiliated entity shall, upon receipt of the notification of list of EINs/TINs of affiliated entities sent by the supervisory tax authority of the managing entity, insert the tax registration information in the form No. 02-DK-TCT and affiliated entity’s TIN to the TMS for being issued with a TIN and notify the affiliated entity of results of tax registration within the period prescribed in the Circular No. 95/2016/TT-BTC.

5. Regarding applications for tax registration of taxpayers being individuals earning income from wages and dependents of employers authorizing their employers to register for tax:

During the period of time pending upgrade of TMS and website of General Department of Taxation in accordance with the Circular No. 95/2016/TT-BTC, the supervisory tax authority of the employer shall, according to the application for tax registration (a consolidated tax registration form No. 05-DK-TH-TCT, a consolidated tax registration form No. 20-DK-TH-TCT) sent by the employer in writing, issue a TIN to the employee and the employee’s dependent(s), and notify the employer of results of tax registration as prescribed in the Circular No. 95/2016/TT-BTC.

Any difficulties arising in the course of implementation of this Official Dispatch should be reported to the General Department of Taxation for consideration./.

For the General Director

The Deputy General Director

Nguyen Dai Tri

APPENDIX

(Issued together with Official Dispatch No. 3706/TCT-KK dated August 17, 2016 of General Department of Taxation)

1. Scope of Circular

The Circular No. 95/2016/TT-BTC deals with scope of regulation for enterprises established and operating in accordance with Law on enterprises must comply with regulations on enterprise registration of Law on enterprises. If the Law on Tax administration provides for regulations not being stipulated in the Law on Enterprises, enterprises must comply with this Circular to ensure that regulations on enterprise registration of the Law on Enterprises and those on tax registration of the Law on Tax administration are not contradictory and easy for application.

Former regulations:Circular No. 80/2012/TT-BTC deals with scope of regulation for enterprises established and operating in accordance with Law on enterprises in Article 1 and other provisions leading inconsistent application.

2. Necessary amendments in accordance with the Law on enterprises and relevant documents and resolutions for difficulties arising during the implementation of Circular No. 80/2012/TT-BTC

2.1. Issuance of TINs to branches, representative offices, business locations of enterprises:

With a view to ensure the consistent issuance of identification numbers to affiliated entities of enterprises (branches, representative offices, and business locations) made by tax authorities and business registration authorities in accordance with the Law on Enterprise 2014 and Decree No. 78/2015/ND-CP, the Circular No. 95/2016/TT-BTC stipulates that 13-digit TINs shall be issued to branches, representative offices of enterprises (regardless of whether they bear responsibility for tax return or not), and 5-digit ordinal numbers (not 13-digit TINs) shall be issued to business locations.

Former regulations:Circular No. 80/2012/TT-BTC stipulates that 13-digit TINs shall be issued to branches, representative offices and business locations only if they bear responsibility for tax return and remitting payments to the tax authorities. Any of branches, representative offices and business locations not bearing responsibility for tax return and remitting payments to the tax authority shall only be monitored in the equivalent list (according to 5-digit ordinal numbers) and not be issued with TINs.

2.2. Procedures for amendments to tax registration (change of head office leading change of supervisory tax authority) of enterprises:

the Circular No. 95/2016/TT-BTC amends applications and procedures for change of head office’s address leading change of supervisory tax authority to be sent to supervisory tax authority for collation of tax liability and fulfillment of tax liability with the tax authority before relocation in accordance with Law on enterprises.

Former regulations:Circular No. 80/2012/TT-BTC does not have this regulation.

2.3. Business suspension:

a) Regarding fulfillment of tax liability of enterprises upon registration of business suspension:

With a view to ensure the consistent regulations on fulfillment of tax liability of enterprises before business suspension prescribed in the Law on enterprises and the Law on Tax administration, the Circular No. 95/2016/TT-BTC annuls the regulation that organizations and individuals must, before business suspension, pay off tax arrears payable to State budget.

Former regulations:Circular No. 80/2012/TT-BTC stipulates that "before the suspension, the organizations or individuals must pay off the tax arrears payable to the State budget”.

b) Time limit for notifications sent to tax authorities before taxpayer’s business suspension:

The Circular No. 95/2016/TT-BTC amends the regulation on time limit for notifications of business suspension/resuming business ahead of schedule sent by taxpayers to tax authorities at least 15 days before business suspension or resuming business ahead of schedule in accordance with Decree No. 78/2015/ND-CP and Circular No. 151/2014/TT-BTC. And it has amended the following: “If a household business is exempted from business registration, it must send a notification of business suspension to the tax authority at least 1 working day before the business suspension in accordance with Circular No. 92/2015/TT-BTC.

Former regulations:Circular No. 80/2012/TT-BTC stipulates that organizations and individuals suspending their business must send a written notification to the supervisory tax authority at least 5 day before the suspension or at least 5 days prior to the following suspension date.

2.4. Tax code deactivation:

a) Responsibilities of enterprise/managing entity for its affiliated entities upon TIN deactivation (dissolution) of enterprise/managing entity or shutdown of branch/representative office/affiliated entity:

The Circular No. 95/2016/TT-BTC adds the regulation that when a managing entity deactivates its TIN, its affiliated entities’ TINs also be deactivated as prescribed. If the managing entity has affiliated entities, all affiliated entities must deactivate their TINs before the managing entity also deactivate its TIN in accordance with the Law on Enterprises and Decree No. 78/2014/ND-CP.

Former regulations:Circular No. 80/2012/TT-BTC stipulates that:

When a managing entity deactivates its TIN, all of its affiliated entities’ TINs also be deactivated as prescribed The managing entity is responsible for notifying their shutdown to their affiliated entities.  The affiliated entities are responsible for implementing the procedures for deactivating their TINs within 10 (ten) days from being notified by their managing entity of the shutdown.

Within 05 (five) working days after deactivating the TIN of the managing entity, the supervisory tax authority of the managing entity must notify the Department of Taxation in the provinces and cities where the affiliated units are situated of TIN deactivation of the managing entity so that the Departments of Taxation can inspect the implementation of the procedures for TIN deactivation of the affiliated entities.  If the TINs of affiliated entities are not deactivated, the tax authority shall request them to implement the procedures for TIN deactivation as prescribed.

If the managing entity has affiliated entities, all affiliated entities must deactivate their TINs before the managing entity also deactivate its TIN.

b) Applications for TIN deactivation:

The Circular No. 95/2016/TT-BTC amends that a document certifying fulfillment of tax liability associated with export and import issued by the customs authority if the entity involves in export and import operation to be added to the application for TIN deactivation in accordance with the Law on Tax administration.

Former regulations:Circular No. 80/2012/TT-BTC does not have this regulation.

c) Time limit for sending applications for TIN deactivation:

The Circular No. 95/2016/TT-BTC amends the time limit for sending applications for TIN deactivation as follows:

- For enterprises: An enterprise shall has its TIN deactivated by the tax authority within the same time limit over which the business registration authority updates the legal status of the enterprise as dissolution on the national business registration database.

- For business entities, other entities, contractors, investors entering into petroleum contracts, foreign contractors, and household businesses:  The taxpayer shall send an application for TIN deactivation within 10 working days from the date on which a decision on shutdown (for business entities, other entities, household businesses, except for household businesses without certificate of household business registration) is issued, or the date of contract termination, or the date of shutdown to the supervisory tax authority for the TIN deactivation procedures.

Former regulations:Circular No. 80/2012/TT-BTC does not have this regulation.

2.5. TIN reactivation of enterprises:

The Circular No. 95/2016/TT-BTC amends the regulation on TIN reactivation for enterprises, organizations, and household business in accordance with Decree No. 78/2015/ND-CP and procedures for tax registration issued together with Decision No. 329/QD-TCT dated March 27, 2014 of the Director of the General Department of Taxation.

Former regulations:Circular No. 80/2012/TT-BTC does not have this regulation. Only Decision No. 329/QĐ-TCT has the similar regulation without full cases of TIN reactivation.

2.6. Sale, giving, inheritance of enterprises:

The Circular No. 95/2016/TT-BTC annuls the specific regulation on sale of enterprises, and adds a regulation that the enterprise s TIN shall remain valid upon occurrence of giving, inheritance, and sale of enterprise in accordance with Law on enterprises.

Former regulations:Circular No. 80/2012/TT-BTC stipulates that the TIN of new enterprise of business sale shall remain but the former enterprise must follow the procedures for tax registration. This regulation is not suitable because in case of business sale, the new enterprise only need to follow the procedures for amendments to tax registration as prescribed. Besides, Circular No. 80 does not have the regulation on giving, inheritance of enterprises upon the sole proprietorship owner s death or missing in accordance with Law on enterprises.

3. Keep reforming administrative procedures in tax registration followed by taxpayers:

3.1. Procedures for tax registration followed by affiliated entities

TMS is a single application nationwide of which advantages are employed by Circular No. 95/2016/TT-BTC to simplify procedures for tax registration for affiliated entities, permit taxpayers to submit applications for tax registration only at the tax authorities of affiliated entities instead of following the 2-step procedures at the two tax authorities as prescribed in Circular No. 80/2012/TT-BTC.

Former regulations:Circular 80/2012/TT-BTC stipulates procedures for tax registration followed by affiliated entities as follows:

Step 1: Before an affiliated entity apply for the tax registration at the tax authority in charge, its managing entity must put it on the “List of affiliated units” in order for its supervisory tax authority to issue a 13-digit TIN to the affiliated entity.

Step 2: The affiliated entity shall apply for tax registration at the tax authority in charge (13-digit TIN notified by the managing entity has been available) in order to be issued with the tax registration certificate.

This regulation causes difficulties to both taxpayers who must not only follow the procedure at the supervisory tax authority of managing entity but also must follow the procedure at the supervisory tax authority of the affiliated entity, and business registration authorities in determination of the validity time of affiliated entity’s TIN.

3.2. Procedures for tax registration followed by taxpayers conducting irregular operation in other provinces:

With a view to simplify administrative procedures in the case where an enterprise/entity has been issued with a TIN upon new business or business expansion to another province/city but it does not establish a branch or affiliated entity, it shall apply for tax with the tax authority in charge of province where the irregular operation is conducted and in accordance with Circular No. 156/2013/TT-BTC that taxpayers shall allocate the payment to State budget for the affiliated manufacturing facility (including fabrication and assembling) located in another province, Circular No. 95/2016/TT-BTC stipulates that the taxpayer may use the issued TIN for the purposes of filing tax return and remitting payments in the province where the irregular operation is conducted or where the affiliated manufacturing facility is located or household business has at least 2 business locations and each of them in under management of a tax authority and need not apply for tax registration with the tax authority in the administrative division where irregular operation arises.

Former regulations:Circular No. 80/2012/TT-BTC stipulates that, in case of occurrence of the aforesaid cases, the taxpayer must apply for tax registration at the tax authority of irregular operation.

3.3. Application for tax registration applying to household businesses:

With a view to simplify administrative procedures applying to household businesses, Circular No. 92/2015/TT-BTC stipulates that the tax authority shall issue TINs to household businesses according to their tax returns. Accordingly, Circular No. 95/2016/TT-BTC adds regulations on guidelines for the above provision to obtain the consistency with Circular No. 92/2015/TT-BTC.

Former regulations:Circular No. 80/2012/TT-BTC only stipulates application for tax registration submitted directly by household businesses to tax authorities, not tax registration provision on tax returns.

3.4. Issuance of cards of individual taxpayer identification number (ITIN):

the Circular No. 95/2016/TT-BTC stipulates that if a person submits an application for tax registration to the tax authority, the tax authority shall print a certificate of individual tax registration, if an employee authorizes his/her employer to register for tax, the tax authority shall not print certificates for each employee but send a notification of list of TINs to the employer. The employer shall notify employee of his/her TIN hereafter so as to the employee may search his/her TIN himself/herself on the website of General Department of Taxation.

Former regulations:Circular No. 80/2012/TT-BTC stipulates that each person registering for tax shall be issued with an ITIN card. However, in fact, since persons may search their TINs on the website of General Department of Taxation and need not ITIN cards, most of them did not receive those cards while the tax authority still printed them causing its waste of manpower and administrative costs of the tax authority.

4. Legalizing some of contents having been implemented in practice:

4.1. Operation of taxpayers through TIN s statuses:

The Circular No. 95/2016/TT-BTC adds a list of TIN’s status of taxpayer to make it consistent with information about enterprises as prescribed in Joint Circular No. 01/2016/TTLT-BKHDT-BTC dated February 23, 2016 of the Ministry of Planning and Investment and the Ministry of Finance and publish it to taxpayers and relevant organizations and individuals for the reason that the TIN’s status reflects taxpayer s operation under monitoring of tax authority.

Former regulations:Circular No. 80/2012/TT-BTC does not have this regulation.

4.2. Taxpayers not operating at the registered addresses (business establishments remove business addresses):

The Circular No. 95/2016/TT-BTC amends the regulation on taxpayers not operating at registered addresses prescribed in Circular No. 80/2012/TT-BTC and Decision No. 1006/QD-TCT in accordance with actual tax management.

Former regulations:Circular No. 80/2012/TT-BTC stipulates responsibilities of the tax authority when a taxpayer stops filing tax return and remitting payment without notifying the tax authority. However, Circular No. 80/2012/TT-BTC has not stipulated full cases to certify a taxpayer not operating at the registered address, namely, the tax authority send documents issued by the tax authority (decision, notification, etc.) to the taxpayer by post but they are returned by the post for the reasons of no recipient or non-existent address, or the tax authority receives a document specifying that the taxpayer fails to operate at its registered address sent by competent authority, etc.

Decision No. 1006/QD-TCT dated June 13, 2006 of General Department of Taxation provides a Regulation on determination, notification, and processing tax matters applying to business establishments abandoning their business addresses but it is not legalized and amended in accordance with regulations of law in force.

4.3 Applications for tax registration of employees and their dependents  authorizing their employers to register for tax:

With a view to ensure the consistency in the case that employers file tax returns, withhold and make statement of personal income tax for their employees, the Circular No. 95/2016/TT-BTC adds a regulation that employees shall register for tax and claim dependents through their employers, and applications and procedures thereof.

Former regulations:Circular No. 80/2012/TT-BTC does not have this regulation.

4.4. Disclosure of tax registration information:

The Circular No. 95/2016/TT-BTC adds a regulation on disclosure of tax registration information to make a legal base for the implementation.

Former regulations:Circular No. 80/2012/TT-BTC has no regulation on disclosure of tax registration information.

5. Meeting requirements for management of additional taxes:

5.1. Requirements for adding regulation on TIN in case where household businesses have business facilities located in different districts or provinces:

The Circular No. 95/2016/TT-BTC adds a regulation on issuance of 13-digit TINs for business locations of household businesses that if the business locations are located in the same district but different communes, they shall be issued with 13-digit TINs so as to meet requirements for tax management of tax authorities.

Former regulations:Circular No. 80/2012/TT-BTC stipulates that household businesses registering for tax shall be issued with a 10-digit TIN. In case the household business or self-employed individual engages in new business activities or expands their business to other districts than that where the TIN is registered, the 10-digit TIN shall be used for tax return and payment .

5.2. Requirements for adding regulation on issuance of withholding TINs to collecting entities authorized by tax authorities (collecting entities) and entities entering into business cooperation contracts with individuals (withholding entities):

Circular No. 95/2016/TT-BTC adds a regulation on issuance of withholding TINs to collecting entities and withholding entities.

Former regulations:Circular No. 80/2012/TT-BTC only has the regulation on issuance of authorized TINs to Vietnamese party which files tax turn and remits payments on behalf of foreign contractors and sub-contractors, and has the regulation on issuance of authorized TINs to collecting entities and withholding entities while obligation to business and  obligation to file authorized tax return and payment remittance need to be monitored separately in tax management.  

5.3. Requirements for management of issuance of TINs and tax management oftraders in the neighbor country on land with Vietnam that conduct business at border marketplaces, checkpoint marketplaces, marketplaces in checkpoint economic zones of Vietnam

the Circular No. 95/2016/TT-BTC adds a regulation on applications and procedures for tax registration and issuance of TINs to traders conducting business at border marketplaces, checkpoint marketplaces, marketplaces in checkpoint economic zones of Vietnam in accordance with Circular No. 218/2015/TT-BTC dated December 31, 2015 of the Ministry of Finance on guidelines for policies and tax management of traders conducting business at border marketplaces, checkpoint marketplaces, marketplaces in checkpoint economic zones of Vietnam according to Decision No. 52/2015/QD-TTg dated October 20, 2015 of the Prime Minister.

Former regulations:Circular No. 80/2012/TT-BTC does not have this regulation.

5.4. Requirements for risk management in tax registration:

The Circular No. 95/2016/TT-BTC adds some information in the tax registration form to establish the relation between business entities, relation between business entities and individuals, sole proprietorship owner and household businesses in accordance with Circular No. 204/2015/TT-BTC dated December 21, 2015 of the Ministry of Finance on application of risk management in tax management.

Former regulations:Circular No. 80/2012/TT-BTC does not have this regulation.

6. Other amendments:

- Amending issuance of TINs to contractors and investors that enter into petroleum contracts.

- Amending time limit over which taxpayers must notify tax authorities of information change.

- Amending the receipt of applications for tax registration by tax authorities due to the inconsistent regulation of Circular No. 80/2012/TT-BTC.

- Adding regulated entities, including: Household businesses conducting business and providing goods/services (including individuals of neighbor countries on land with Vietnam engaging in sale and barter at border marketplace, checkpoint marketplaces, marketplaces in checkpoint economic zones) as prescribed in Circular No. 218/2015/TT-BT, collecting entities, taxpayers registering tax registration for dependents in accordance with the Law on personal income tax, regulations of the General Department of Customs, Departments of Customs, Sub-department of Customs, Sub-department of Customs, regulatory agencies, other relevant organizations and individuals.

- Amending TIN structure: Adding a dash to 13-digit TIN so as to conform to actual application.

- Amending regulation on the first number N1N2 to conform to TIN structure to be issued to employees because this TIN is not indicated according to the issuing province.

7. Attached forms

a) Forms 01-DK-TCT, 02-DK-TCT, 03-DK-TCT, 04-DK-TCT, 04.1-DK-TCT, 05-DK-TCT, 06-DK-TCT and attached lists, 08-MST, 09-MST, 10-MST, 11-MST, 12-MST, 13-MST shall be amended.

b) Forms  05-DK-TH-TCT, 14-MST, 15/BB-BKD, 16/TB-DKT, 17/TB-DKT, 18/TB-DKT, 19/TB-ĐKT, 20-DK-TCT, 20-DK-TH-TCT, 21-MST, 22-MST, 23/DK-TCT, 24/DK-TCT, 25/DK-TCT, 26/TB-DKT shall be added.

c) Form of notification of establishment of branch/representative office/business location (07-MST) shall be annulled.