Vietnam tax authorities’ view on “Permanent Establishment” in recent cases Pursuant to the guidance of the Circular 205/2013/TT-BTC as well as other official letters of the General Department of Taxation, except for other specific cases, the tax authorities often determine the PE based on the following three (03) conditions:
1) The existence of an “business establishment”;
2) This business establishment must be “fixed”;
3) The enterprise carries out wholly or partly of its business activities through fixed business establishment.
Defining the existence of a “business establishment” A business establishment is not necessarily attached with a complete establishment such as a building, an office with management system. A business establishment may simply be just a vehicle, machinery or equipment or even merely a specific space used by the enterprise.
Defining the “fixed” place of business The fixed place of business is assessed based on the regularity and stability criteria in operation of that business establishment at a specific location in Vietnam for a certain period.