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CIRCULAR 201/2013 GUIDING THE APPLICATION OF ADVANCED PRICING ARRANGEMENT (APA) IN TAX ADMINISTRATION
APA
 As part of the development of Vietnam’s transfer pricing regulatory framework, the Ministry of Finance (MoF) recently released Circular 201/2013/TT-BTC (Circular 201) which provides formal guidance on the Advance Pricing Arrangement (APA) programme, including the APA framework, governance, process, roles, responsibilities and mutual expectations for
taxpayers and the Vietnamese authorities in applying for, negotiating and executing APAs. Circular 201 will become effective from 5 February 2014.
An APA allows taxpayers to agree, on a unilateral, bilateral or multilateral basis with the relevant tax authority (or in the case of bilateral or multilateral APAs, with multiple tax authorities), the pricing of their related party transactions, in advance, for a period of not more than five years. Taxpayers have the option to re-new their APA should the circumstances be materially unchanged at the conclusion of the initial APA term. The finalisation and implementation of Circular 201 is a significant positive step in Vietnam’s transfer pricing regulatory framework. While not all the proposed changes received from the public consultation process have been reflected in the final Circular, the MoF and General Department of Taxation’s (GDT’s) commitment to the APA programme is welcome news.