TRANSFER PRICING NEWS

GDT’s Oficial Letter No 271
highlighting Decree 132/2020’s
changes
On 27 January 2021, the General Department of Taxation (GDT) issued►

As for carry forward of interest expenses to the next tax

Official Letter No. 271 / TCT-TTKT ("OL 271") highlighting new contents

period when finalizing 2019 CIT as prescribed in Decreeof Decree No. 132/2020/ ND-CP (“Decree 132/2020) and requesting

68/2020, the time for carry forward of interest expenses istax departments to disseminate and notify tax offices and taxpayers

continuous and not exceeding 5 years from the period of

under their respective management.

2020 CIT calculations. If the interest is not fully carriedforward after 5 years, the remaining interest expensebalance will not be carried forwarded to the next tax peri-

OL 271 highlights the following key notes:►

Because Decree 132/2020 specifies tax administration for taxpayers with transfer pricing principles, procedures, rights andobligations of taxpayers etc, the Ministry of Finance will not issue a circular guiding the implementation of Decree 132/2020.

►►

Because Decree 132/2020 introduces important changes that
affect the CIT period from 2020 onwards, taxpayers need toconsider the effects of the new regulations in its transfer pricing
risk management to minimize the impacts of cashflow and repu-

Decree 132/2020 amending and supplementing regulations ontation when the tax authority conducts a transfer pricing audit

tax authorities' database (Clause 7, Article 4), raising arm’s

later.

length range (Clause 9, Article 4).

►od.

In case you wish to further discuss the ramifications of Decree

Applying deductible interest expense cap provided in Decree132/2020 on your transfer pricing position and tax risk manage-

68/2020.

ment measures, please feel free to contact any of us at any
time.

Amending regulations on CbCr, according to which report submission deadline is at least 12 months after the end of fiscal year

CONTACTS

of Ultimate Parent Company.

►

Supplementing the responsibilities and rights of the tax authori-

UHY Auditing and Consulting Co Ltd

ties in managing transfer pricing. It is worth noting that the tax

Thanh Nguyen - Partner
E: thanhnt@uhyvietnam.com.vn

authorities do not use the CbCr for tax reassessment and imposition.

Official Letter 271 also reintroduces the transitional provisions on theimplementation of Decree 132/2020, specifically:►

Taxpayers who have been tax audited and obtained tax audit
conclusions for 2017 & 2018 but falls into the case where thepayable tax amount is re-determined according to Point c, Clause
2, Article 2 of Decree 68 / 2020 have the right to request the tax
authority to re-determine the payable tax amount if the request
has not been submitted to the tax authority at the effective dateof this Decree.

►

Oanh Phung –Director
E: oanhpt@uhyvietnam.com.vn
Hanoi Head Office
5th Fl, B2 Tower, Roman Plaza Building, To Huu
Street, Nam Tu Liem District, Hanoi, Vietnam
Tel: +84 245 678 3999
Fax: +84 243 755 7448
Website:www.uhy.vn
Facebook: UHY Tax Centre

Decree 132/2020 takes effect from 20 December 2020 andapplies from 2020 CIT period onwards. Accordingly, Decree

20/2017 expires from 20 December 2020.

►

Bo Tran - Director
E: bott@uhyvietnam.com.vn

In case the taxpayers paid 2017 and 2018 CIT which is more than
CIT amount and late payment interest re-determined, the differ-

Ho Chi Minh City Office
146 Nguyen Cong Tru, District 1, Ho Chi Minh City
Tel: +84 283 820 4899
Fax: +84 283 820 4909

ence will be offset against the CIT amount in 2020 to 2024. The
outstanding balance will be forfeited if not fully utilized by 2024.

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