As of January 1, 2025, shall tax authorities pay interest on overpaid amount during settlement of complaints of taxpayers in Vietnam?

As of January 1, 2025, shall tax authorities pay interest on overpaid amount during settlement of complaints of taxpayers in Vietnam?

Pursuant to Clause 2, Article 61 of the Law on Tax Administration 2019 regarding tax payment during complaint and lawsuit resolution as follows:

Tax Payment During Complaint and Lawsuit Resolution

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2. In the case where the amount of tax, late payment interest, and fines paid is greater than the amount determined according to the decision of the competent authority or the court's verdict, the taxpayer shall be refunded the excess tax, late payment interest, and fines.

The taxpayer has the right to request the tax management agency to pay interest at the rate of 0.03%/day calculated on the amount of excess tax, late payment interest, and fines. The source of interest payment is made from the central budget according to the provisions of the law on state budget.

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Thus, according to current regulations, if the paid tax amount is greater than the tax amount determined according to the decision of the competent authority or the court's verdict, the taxpayer has the right to request the tax authority to pay interest at the rate of 0.03%/day calculated on the overpaid tax amount.

However, pursuant to Clause 8, Article 6 of the Law Amending the Securities Law, Accounting Law, Independent Audit Law, State Budget Law, Management and Use of Public Property Law, Law on Tax Administration, Personal Income Tax Law, National Reserves Law, Law on Handling Administrative Violations 2024 (effective from January 1, 2025), the above clause of the Law on Tax Administration 2019 has been amended as follows:

Amendments and Supplements to Certain Articles of the Law on Tax Administration

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8. Amend and supplement Clause 2, Article 61 as follows:

“2. In the case where the amount of tax, late payment interest, and fines paid is greater than the amount determined according to the decision of the competent authority or the court's verdict, the taxpayer shall be refunded the excess tax, late payment interest, and fines.”.

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From January 1, 2025, there will no longer be a provision allowing taxpayers to request the tax authority to pay interest on overpaid taxes at the rate of 0.03%/day on the paid tax amount.

Therefore, the tax authority will not be required to pay interest on taxpayers’ overpaid taxes after complaints.

As of January 1, 2025, shall tax authorities pay interest on overpaid amount during settlement of complaints of taxpayers in Vietnam? (Image from the Internet)

Who has the authority to handle taxpayers' overpaid fines in Vietnam?

According to Clause 2, Article 10 of Circular 06/2021/TT-BTC, the authority to handle overpaid tax, late payment interest, and fines is specified as follows:

- The General Director of the General Department of Customs, Directors of the Provincial or Municipal Customs Departments, Directors of the Post-clearance Inspection Department, Directors of the Anti-smuggling Investigation Department for cases of issuing Tax Assessment Decisions or Penalty Decisions.

- The Heads of the Customs Sub-departments, Heads of the Post-clearance Inspection Sub-departments where the tax, late payment interest, fines, and other budgetary amounts paid by the taxpayer exceed the payable amounts.

- The Chief of the Customs office where the amount of tax, late payment interest, and fines paid exceeds the amount determined according to the decision of the competent authority or the court's verdict.

Vietnam: What does the application for refunding overpaid taxes include?

According to Article 42 of Circular 80/2021/TT-BTC on the application for refunding overpaid taxes as follows:

(1) application for personal income tax refund for income from wages and salaries

- In case the organization or individual paying income from wages and salaries settles on behalf of individuals who authorize:

+ A written request for handling overpaid tax, late payment interest, fines according to form No. 01/DNXLNT issued with Appendix 1 of Circular 80/2021/TT-BTC;

+ A power of attorney according to the provisions of law in cases where the taxpayer does not directly carry out the tax refund procedure, except for cases where the tax agent submits the tax refund application according to the contract signed between the tax agent and the taxpayer;

+ A list of tax payment vouchers according to form No. 02-1/HT issued with Appendix 1 of Circular 80/2021/TT-BTC (applicable to organizations, individuals paying income).

- In the case an individual with income from wages and salaries directly settles tax with the tax office, overpays tax, and requests a refund on the personal income tax settlement declaration, no refund application is required.

The tax office will process the refund based on the personal income tax settlement application to refund the overpayment to the taxpayer as regulated.

(2) application for refunding overpayments of other taxes and collections includes:

- A written request for handling overpaid tax, late payment interest, fines according to form No. 01/DNXLNT issued with Appendix 1 of Circular 80/2021/TT-BTC;

- A power of attorney in cases where the taxpayer does not directly carry out the tax refund procedure, except for cases where the tax agent submits the tax refund application according to the contract signed between the tax agent and the taxpayer;

- Accompanying documents (if any).

(3) In the case of overpayment refunds during ownership transfer, business transformation, merger, consolidation, division, separation, dissolution, bankruptcy, termination of activities requiring a tax office inspection at the taxpayer's headquarters as prescribed at point g, Clause 1, Article 110 of the Law on Tax Administration 2019 and Chapter 8 of Circular 80/2021/TT-BTC, if the Conclusion or Decision on handling and other inspection documents show an overpayment, the taxpayer does not have to submit a refund application. The tax office shall base on the Conclusion or Decision on handling and other inspection documents to perform the overpayment refund procedure for the taxpayer as regulated.