Notes after establishing a representative office in Vietnam

There are some noticable information and procedures that representative office of foreign traders have to pay attention to after establishing in Vietnam.

Key note on representative office tax procedures

Regarding about the regulations on paying license tax of the representative office

A representative office is an affiliated unit of an enterprise, which has the task of representing by authorization for the interests of the enterprise and protecting those interests.

• Representative Offices must pay license tax. Within 30 days from the date of having business registration of the representative office, must declare and pay license tax.
• As regulated in Official Letter 1200/BTC-TCT, guiding the tax policy of the representative office as follows:
  • In  Clause 6, Article 2 of Decree No. 139/2016/ND-CP  dated October 4, 2016 of the Government regulating license fees, it is stated that: License fee payers are organizations and individuals engaged in production activities. , trading in goods and services, except for the case specified in Article 3 of this Decree, including: branches, representative offices and business locations of organizations specified in Clauses 1, 2, 3 , 4 and 5 of this Article (if any).
• Based on the above provisions, representative offices that carry out activities such as representation, marketing, and market research without producing and trading in services are not required to pay license tax.

Regarding personal income tax for personnel of representative offices

Representative offices are responsible for withholding, declaring and paying personal income tax on income from wages and salaries of representative office employees as prescribed in Articles 24 and 25 of Circular No.  111 /2013/TT-BTC  dated August 15, 2013 of the Ministry of Finance guiding the implementation of the Law on Personal Income Tax, the Law amending and supplementing a number of articles of the Law on Personal Income Tax and Decree No.  65/2013/ND-CP ; procedures and dossiers for declaration and payment of personal income tax shall comply with the guidance in Article 16 of the Circular No.  156/2013/TT-BTC  dated November 6, 2013 of the Ministry of Finance guiding the implementation of a number of articles of Law on Tax Administration and Decree No. 83/2013/ND-CP.

Regarding the use and issuance of invoices 

Representative offices do not have business functions, have no income from selling goods or providing services, so they do not have to issue and use invoices;

Representative offices must submit monthly (quarterly) tax returns for taxes incurred by the representative office that must be paid or payable on behalf of; taxes do not arise, representative offices do not have to file tax returns.

Hang a sign at the Representative Office

Implemented hanging signs at the branch.

The signboard has the following information: Name of representative office, head office address, phone number, governing body.

Adjustment of Representative Office

If there are any changes related to the operation content and the content shown on the Representative Office’s business registration, the procedures for change must be carried out.

During the operation of the business, it is inevitable that concerns and problems arise related to legal procedures.

For your information, refer to the article Adjustment of License for establishment of representative office in Vietnam of Viet An Law.

Customers who need to adjust the License for establishment of representative office or have related questions, please contact Viet An Law Firm for more details!