term to the provincial and city tax authorities Completing the information and

Term to the provincial and city tax authorities

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term to the provincial and city tax authorities; Completing the information and data system of people and enterprises paying taxes to monitor closely changes in revenue and profit of enterprises. Second, strengthen the apparatus. Recently, the General Department of Taxation officially established the Inspection Department for transfer prices. At the same time, the transfer price inspection force established in 4 local tax departments has many risks related to transfer prices, such as Hanoi, Ho Chi Minh City, Binh Duong and Dong Nai. This is a specialized force working against price transfer at the central to local tax authorities, as well as collecting and processing information from enterprises with links from tax agencies and third parties. The question now is that tax authorities should urgently build database systems to meet the requirements of exploitation, risk analysis and serve as a basis for determining market prices for inter-transactions. link. Because according to the local Tax Departments, the identification of transfer pricing is not difficult, but the processing process faces many difficulties because no data is available, so tax officials still have to do it manually, pick up each item to compare, compare. Third, apply valuation method (APA - pre-agreed mechanism on price determination). This measure is being widely applied in Europe and many countries in the region such as China, Indonesia, Thailand, Malaysia, ... In Vietnam, according to the Law on amendments and supplements to a number of Articles of the Tax Administration Law, from July 1, 2013, tax authorities are allowed to apply APA. Under this mechanism, multinational enterprises must proactively propose measures to calculate prices or prices of buying and selling goods and services among group members, before declaring and paying taxes. Tax authorities will coordinate with foreign tax authorities signed a double tax avoidance agreement with Vietnam to organize supervision and control to combat tax fraud. In theory, APA may help reduce price cheating and chorus "fake hole, real interest" that public opinion has mentioned in many enterprises. However, it is unlikely that enterprises with foreign capital voluntarily act as APA.
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Because APA applies on the principle of voluntariness, tax authorities cannot force businesses to do so. Tax authorities should have mechanisms to encourage businesses with associated transactions to apply APA to avoid price transfer inspections. Currently, Vietnam has also issued guidelines on APA and some companies have applied. However, APA is also a complicated and time-consuming process, so it is only suitable for large-scale enterprises and has a stable business model. On the other hand, the Ministry of Finance and the General Department of Taxation should continue to improve the legal mechanism in managing transfer pricing.
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