Uni 17-12-2018 - Guidance on the cost of business co-operation

Official Letter No. 79759/CT-TTHT dated 04 December 2018 of the General Department of Taxation providing guidance on business co-operation expenses as follows:

In cases companies jointly sign business co-operation contracts in accordance with the provisions of the law in Vietnam, these companies (the parties) shall jointly sign co-operation contracts with the service suppliers, the parties agree to appoint a representative (representative) to receive the invoice from the supplier and on behalf of the rest of the co-operative contract to pay the supplier the entire contract value, then redistribution costs for parties to a co-operation contract based on an agreement between the parties:

- When the parties to the contract pay the expenses to the representative party, the representative shall have to issue VAT invoices to the other parties.

- The amount of money represented by the representative of the parties to the contract of payment to the service provider shall not be determined as: “Other receivables are not related to the sale of goods and services of business establishments” as stipulated in Item d, Clause 7, Article 5 of Circular No. 219/2013/TT-BTC.