29 September 2021
Binh Duong Tax Department issued Official Letter No. 13014/CTBDU-TTHT dated 10 September 2021 on revenue and income from the business cooperation contract (“BCC Contract”) with the following contents:
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Taxpayers must calculate the payable tax amount unless the tax calculation is done by the tax administration authority.
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In case the parties entered a BCC Contract which divides the business result per the turnover from the sale of goods and services, the taxed turnover is the turnover of each party divided under the contract.
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In case the parties entered a BCC Contract which divides their business result per product, the taxed turnover is the turnover of products divided into each part under the contract.
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In case the parties entered a BCC Contract that divides their business result per pre-CIT profit, the turnover for determining the pre-tax income is the proceeds from the sale of goods or provision of services under the contract. The parties shall appoint a party as a representative to produce invoices, record turnover, and expenses, and determine the pre-CIT profit divided to each party. Each party shall perform its CIT obligation under current regulations.
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In case the parties entered a BCC Contract which divides their business result per after-CIT profit, the turnover for calculating taxable income is the proceeds from the sale of goods or provision of services under the contract. The parties to the BCC Contract shall appoint a party as a representative to produce invoices, record turnover, and expenses, and declare and pay CIT on behalf of other parties.
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