Tax declaration for dependent branches


My company’s head office is located in Binh Tan district – HCM city. The company has established a dependent branch in Dong Da district, Hanoi city and the branch has its own invoice, seal, and revenue generation. If the head office appoints an employee to travel to Hanoi to work and pays him according to the labor contract signed between the head office and the employee, does the head office or branch have to declare personal income tax for that employee? In addition, I also wonder whether the branch or head office is responsible for declaring and paying license tax, VAT, and CIT.


Based on the information you provide and the current legal regulations, we would like to offer an answer to your question as follows:

First, does the branch have to declare personal income tax (PIT) for employees appointed by the company to work in the branch?

For PIT declaration as well as PIT finalization, the current law stipulates that the payer is obliged to tax declaration, no matter which establishment the employee is working in. In particular:

  • Pursuant to the provisions of Item a1 Clause 1 Article 16 of Circular 156/2013/TT-BTC on rules for declaring PIT:

“a.1) Payers who are individuals, or organizations that deduct personal income tax shall declare tax monthly or quarterly. The payer is not required to declare tax if no personal income tax is deducted in the month or quarter.”

Accordingly, for income that is subject to personal income tax, the organization or individual paying such income is obliged to declare PIT.

  • Pursuant to the provisions of Clause 1, Article 21 of Circular 92/2015/TT-BTC:

“a.3) Payers including organizations and individuals of taxable salaries and wages are responsible to declare personal income tax finalization, even one authorized by wage earners, whether tax is deducted or not. If incomes are not paid, such statements of PIT are not required.”

Accordingly, for incomes from salaries and wages that are subject to PIT, payers including organizations and individuals are obliged to declare PIT finalization and PIT finalization for employees if authorized by them, regardless of which establishment the employee is working in.

Thereby, the Company is the payer so the Company shall be liable for PIT declaration, PIT finalization declaration, and PIT finalization for this employee (if he authorizes the company to declare and final settlement instead).

Second, are license fees, VAT and CIT declared and paid by the branch or company?

  • License fees:
  • Pursuant to paragraph 2, Clause 1, Article 17 of Circular 156/2013/TT-BTC:

“If the taxpayer has an affiliate (branch, store, etc.) in another province, the License tax declaration of the affiliate may be submitted to the supervisory tax authority of the affiliate.” 

  • Pursuant to Article 2 of Decree 139/2016/ND-CP, a branch is one of the subjects to pay license fees.

 Thus, because your company’s branch is in another province compared to the head office, the branch shall submit the license tax declaration and pay the license fee simultaneously as prescribed.

  • Value-added tax (VAT):
  • Pursuant to Point c, Clause 1, Article 11 of Circular 156/2013/TT-BTC:

“c) Where the taxpayer has an affiliate in another province other than the taxpayer’s headquarter, the affiliate shall directly submit the VAT declaration to the supervisory tax authority. If the affiliate does not sell anything and thus does not earn any revenue, tax shall be declared at the taxpayer’s headquarter”.

  • In comparison with your case, the branch is in another province/municipality other than the head office of the company. Besides, the branch also generates revenue. Therefore, the branch is obliged to declare and pay VAT to the supervisory tax authority, not to the company.
  • Corporate Income Tax (CIT):

“c) Where the taxpayer has an affiliate that is a dependent unit, such affiliate is not required to submit corporate income tax declarations. The taxpayer is responsible for tax declaration, including the tax incurred by the affiliate.”

Thus, because the branch is a dependent unit, your company is responsible for declaring and paying CIT at the company’s head office (in Ho Chi Minh City), including the tax incurred by the branch. The branch is not required to declare and pay CIT.


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