Does tax administration content include cancellation of tax debts? What are cases of cancellation of tax debts in Vietnam?
Vietnam: Does tax administration content include cancellation of tax debts?
According to the provisions of Article 4 of the Law on Tax Administration 2019 regarding tax administration content as follows:
Tax administration content
- Tax registration, tax declaration, tax payment, tax determination.
- Tax refund, tax exemption, tax reduction, non-tax collection.
3. Tax debt charge off; cancellation of tax debts, late payment interest, fines; exemption from late payment interest, fines; non-calculation of late payment interest; extension of tax payment; gradual payment of tax debts.
- Management of taxpayer information.
- Management of invoices, documents.
- Tax inspection, tax audit and implementation of measures to prevent and control tax law violations.
- Enforcement of administrative decisions on tax administration.
- Handling administrative violations on tax administration.
- Settlement of complaints, denunciations about taxes.
- International cooperation on taxes.
- Propaganda and support for taxpayers.
Thus, cancellation of tax debts is one of the contents of tax administration as per legal regulations.
Vietnam: Does tax administration content include cancellation of tax debts?
What are cases of cancellation of tax debts in Vietnam?
According to Article 85 of the Law on Tax Administration 2019, cases eligible for cancellation of tax debts, late payment interest, and fines include:
- Enterprises, cooperatives declared bankrupt and have made payments as per bankruptcy laws but have no assets to pay tax debts, late payment interest, fines.
- Individuals who have died or are declared by the court as dead, incapacitated, with no assets, including inheritable assets, to pay outstanding tax debts, late payment interest, fines.
- Tax debts, late payment interest, fines of taxpayers not specified in clauses 1 and 2 of Article 85 Law on Tax Administration 2019 where tax authorities have enforced measures as per point g clause 1 Article 125 Law on Tax Administration 2019 and such debts have been overdue for 10 years since the deadline without recovery possibility.
Taxpayers who are individuals, business individuals, household heads, business owners, sole proprietors, and single-member limited companies whose debts have been cancelled as specified must repay the cancelled tax debts, late payment interest, and fines to the State before resuming or establishing new business operations.
- Tax debts, late payment interest, and fines due to widespread natural disasters, calamities, or epidemics considered for late payment interest exemption as per clause 8 Article 59 Law on Tax Administration 2019 and tax payment extensions per point a clause 1 Article 62 Law on Tax Administration 2019 that still incur losses, rendering the taxpayer unable to recover business or pay tax debts, late payment interest, fines.
- the Government of Vietnam prescribes coordination between tax administration and business registration agencies, local governments ensuring erased taxes, late fees, fines are reimbursed into the state budget as per clause 3 Article 85 Law on Tax Administration 2019 before issuing business registration certificates; details clause 4 Article 85 Law on Tax Administration 2019.
Who has the authority to decide tax debt cancellation in Vietnam?
According to Article 87 of the Law on Tax Administration 2019, the authority to decide tax debt cancellation, late payment interest, fines is as follows:
- Chairman of the Provincial People's Committee decides on cancellation of tax debts, late payment interest, fines for the following cases:
+ Cases specified in clauses 1 and 2 Article 85 Law on Tax Administration 2019;
+ Households, business households, business individuals, individuals specified in clause 3 Article 85 Law on Tax Administration 2019;
+ Enterprises, cooperatives under clause 3 Article 85 Law on Tax Administration 2019 having tax debts, late payment interest, fines under 5,000,000,000 VND.
- General Director of the General Department of Taxation, General Director of the General Department of Customs decides on debt cancelledess for enterprises, cooperatives under clause 3 Article 85 Law on Tax Administration 2019 having debts from 5,000,000,000 VND to below 10,000,000,000 VND.
- Minister of Finance decides on debt cancelledess for enterprises, cooperatives under clause 3 Article 85 Law on Tax Administration 2019 with debts from 10,000,000,000 VND to below 15,000,000,000 VND.
- Prime Minister of the Government of Vietnam decides on debt cancelledess for enterprises, cooperatives under clause 3 Article 85 Law on Tax Administration 2019 with debts from 15,000,000,000 VND or more.
- Chairman of the Provincial People's Committee reports the results of cancellation of tax debts, late payment interest, fines to the Provincial People's Council in the early year session. Minister of Finance consolidates cancellation of tax debts, late payment interest, fines to report to the Government of Vietnam to present to the National Assembly during state budget settlement.
