Are VATpayers subject to penalties and late payment interests during the VAT deferral in Vietnam?

Are VATpayers subject to penalties and late payment interests during the VAT deferral in Vietnam?

Based on the provisions stipulated in Clause 4, Article 62 of the 2019 Law on Tax Administration as follows:

Tax deferral

1. The extension of tax payment shall be considered based on the taxpayer's request under one of the following cases:

a) Suffer physical damage, directly affecting production and business operations due to force majeure circumstances as stipulated in Clause 27, Article 3 of this Law;

b) Must cease operations due to the relocation of production or business facilities as requested by competent authorities, affecting production and business results.

2. Taxpayers eligible for a tax deferral under Clause 1 of this Article shall be granted an extension for part or all of the tax payable.

3. The tax deferral period is stipulated as follows:

a) Not exceeding 2 years from the tax payment deadline for cases specified in Point a, Clause 1 of this Article;

b) Not exceeding 1 year from the tax payment deadline for cases specified in Point b, Clause 1 of this Article.

4. Taxpayers are not subject to penalties and do not have to pay late payment interests calculated on the tax debt during the tax deferral period.

5. The head of the tax administration agency directly managing shall base on the tax deferral dossier to decide the extended tax amount and the extension period.

Thus, according to the above provisions, taxpayers will not be subject to penalties and do not have to pay late payment interests during the tax deferral period.

Are VATpayers subject to penalties and late payment interests during the VAT deferral in Vietnam? (Image from Internet)

What does a VAT deferral application in Vietnam?

According to Clause 2, Article 24 of Circular 80/2021/TT-BTC, the tax deferral dossier includes:

[1] In the case of natural disasters, calamities, epidemics, fires, unexpected accidents as specified in Point a, Clause 27, Article 3 of the 2019 Law on Tax Administration, the dossier includes:

- A written request for tax deferral from the taxpayer using form No. 01/GHAN download here, issued together with Appendix 1 of Circular 80/2021/TT-BTC;

- Documents confirming the time, location of natural disasters, calamities, epidemics, fires, unexpected accidents from competent authorities (original or certified copy by the taxpayer);

- Documents determining the value of damages established by the taxpayer or the taxpayer's legal representative, who bears responsibility for the accuracy of the data;

- Documents (original or certified copy by the taxpayer) specifying the liability of organizations or individuals for compensating damages (if any);

- Vouchers (original or certified copy by the taxpayer) related to damage compensation (if any).

[2] In the case of other force majeure circumstances as specified in Clause 1, Article 3 of Decree 126/2020/ND-CP, the dossier includes:

- A written request for tax deferral from the taxpayer using form No. 01/GHAN download here, issued together with Appendix 1 of Circular 80/2021/TT-BTC;

- Documents determining the value of damages established by the taxpayer or the taxpayer's legal representative, who bears responsibility for the accuracy of the data;

- Documents confirming the time, location of force majeure events from competent authorities; documents proving that the taxpayer must cease or suspend production, business operations due to war, riots, strikes whereby the taxpayer must cease or suspend production, business (original or certified copy by the taxpayer);

- Documents proving that the risk faced does not originate from the causes or subjective responsibility of the taxpayer, and the taxpayer does not have financial resources to make payments to the state budget for cases of damages due to risks not originating from the causes or subjective responsibility of the taxpayer (original or certified copy by the taxpayer);

- Vouchers (original or certified copy by the taxpayer) related to damage compensation from insurance agencies (if any).

[3] In the case of the relocation of production or business facilities as regulated at Point b, Clause 1, Article 62 of the 2019 Law on Tax Administration, the dossier includes:

- A written request for tax deferral from the taxpayer using form No. 01/GHAN download here, issued together with Appendix 1 of Circular 80/2021/TT-BTC;

- Decision from competent state authorities regarding the relocation of production or business facilities for the taxpayer (original or certified copy by the taxpayer);

- Scheme or plan for relocation, clearly reflecting the schedule and execution plan of the taxpayer's relocation (original or certified copy by the taxpayer).

What is the deadline for tax deferral of VAT in Vietnam for the third quarter of 2024?

According to Clause 1, Article 4 of Decree 64/2024/ND-CP specifying the tax deferral as follows:

Extension of Tax Payment and Land Rent

1. For Value Added Tax (excluding import VAT)

a) Extend the tax payment deadline for VAT amounts arising to be paid (including tax amounts allocated to other provincial localities where the taxpayer's headquarters are located, taxes paid per occurrence) for tax periods from May to September 2024 (for cases of monthly VAT declaration) and the second quarter of 2024, the third quarter of 2024 (for cases of quarterly VAT declaration) for enterprises, organizations stated in Article 3 of this Decree. The extension period is 05 months for the VAT amount of May 2024, June 2024, and the second quarter of 2024; the extension period is 04 months for the VAT amount of July 2024; the extension period is 03 months for the VAT amount of August 2024; the extension period is 02 months for the VAT amount of September 2024 and the third quarter of 2024. The extension periods at this point are calculated from the date of the VAT payment deadline as prescribed by tax management laws.

Enterprises and organizations eligible for the extension shall still perform the declaration and submission of monthly, quarterly VAT declarations according to current legal regulations but are not yet required to pay the VAT amount arising on the declared VAT declarations. The VAT payment deadlines for the monthly, quarterly tax periods are extended as follows:

The VAT payment deadline for the tax period of May 2024 is no later than November 20, 2024.

The VAT payment deadline for the tax period of June 2024 is no later than December 20, 2024.

The VAT payment deadline for the tax period of July 2024 is no later than December 20, 2024.

The VAT payment deadline for the tax period of August 2024 is no later than December 20, 2024.

The VAT payment deadline for the tax period of September 2024 is no later than December 20, 2024.

The VAT payment deadline for the tax period of the second quarter of 2024 is no later than December 31, 2024.

The VAT payment deadline for the tax period of the third quarter of 2024 is no later than December 31, 2024.

b) In the case where enterprises, organizations mentioned in Article 3 of this Decree have branches or affiliated units which declare VAT separately with tax administration managing directly the branches, affiliated units, these branches, units are also eligible for the VAT payment extension. If the branches, affiliated units of enterprises, organizations mentioned in Clauses 1, 2, and 3, Article 3 of this Decree do not have production or business activities in the economic sectors, fields eligible for extension, then such branches or units are not eligible for the VAT payment extension.

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Thus, according to the regulations, the latest VAT payment deadline for the tax period of the third quarter of 2024 is no later than December 31, 2024.