From January 1, 2025, Shall the regulation on paying interest to taxpayers if the tax authority delays tax refunds be annulled in Vietnam?

From January 1, 2025, Shall the regulation on paying interest to taxpayers if the tax authority delays tax refunds be annulled in Vietnam?

Based on Clauses 3 and 13 of Article 6 of the Law Amending the Securities Law, Accounting Law, Independent Auditing Law, State Budget Law, Law on Management and Use of Public Assets, Tax Administration Law, Personal Income Tax Law, National Reserve Law, Law on Handling Administrative Violations 2024 (effective from January 1, 2025) which prescribes amendments and supplements to certain articles of the Tax Administration Law as follows:

Amendments and supplements to certain articles of Tax Administration Law

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3. Amend and supplement Clause 8 of Article 16 as follows:

“8. Entitled to compensation for damages caused by the tax management agency, tax management officials in accordance with the law on State compensation liability.”

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13. Abolish Clause 3 of Article 75 and Clause 7 of Article 124.

Simultaneously, based on Clause 3 of Article 75 of the Tax Administration Law 2019 which prescribes the time limit for processing tax refund claims as follows:

Time limit for processing tax refund claims

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3. Beyond the time limit specified in Clauses 1 and 2 of this Article, if the delay in issuing the tax refund decision is due to the fault of the tax management agency, in addition to the tax amount to be refunded, the tax management agency must also pay interest at the rate of 0.03%/day on the amount to be refunded and the number of days of delay. The interest payment source is drawn from the central budget as prescribed by the law on the state budget.

Thus, from January 1, 2025, the Law Amending the Securities Law, Accounting Law, Independent Auditing Law, State Budget Law, Law on Management and Use of Public Assets, Tax Administration Law, Personal Income Tax Law, National Reserve Law, Law on Handling Administrative Violations 2024 abolishes the regulation related to paying interest to taxpayers by the tax authority when delaying the issuance of tax refund decisions.

Instead, the regulation on paying interest to taxpayers has been referenced to compensation for damages caused by the tax management agency, tax management officials in accordance with the Law on State Compensation Liability 2017.

From January 1, 2025, Shall the regulation on paying interest to taxpayers if the tax authority delays tax refunds be annulled in Vietnam? (Image from Internet)

Who has the authority to decide on tax refunds in Vietnam from January 1, 2025?

Based on Clause 11 of Article 6 of the Law Amending the Securities Law, Accounting Law, Independent Auditing Law, State Budget Law, Law on Management, and Use of Public Assets, Tax Administration Law, Personal Income Tax Law, National Reserve Law, Law on Handling Administrative Violations 2024 (effective from January 1, 2025) which prescribes amendments and supplements to certain articles of the Tax Administration Law as follows:

Amendments and supplements to certain articles of Tax Administration Law

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Amend and supplement Clause 1 of Article 76 as follows:

“1. The General Director of the General Department of Taxation, the Director of the Tax Department, the Chief of the Tax Sub-department, the Chief of the Regional Tax Sub-department decide on tax refunds in cases of refund as prescribed by tax law.”

Thus, from January 1, 2025, the authorities with the power to decide on tax refunds will include:

- General Director of the General Department of Taxation

- Director of the Tax Department

- Chief of the Tax Sub-department

- Chief of the Regional Tax Sub-department who decides on tax refunds in cases as prescribed by tax law.

What is the time limit for processing tax refund claims in Vietnam?

Based on Clauses 1 and 2 of Article 75 of the Tax Administration Law 2019 prescribing the time limit for processing tax refund claims as follows:

- For dossiers in the category of pre-refund tax, no later than 6 working days from the date the tax management agency issues a notice of acceptance of the dossier and the time limit for processing the tax refund claim, the tax management agency must decide on tax refunds for taxpayers or notify the transfer of the taxpayer's dossier for prior verification of tax refund if in the case specified in Clause 2 of Article 73 Tax Administration Law 2019 or notify the non-refundable status to taxpayers if the dossier does not meet the conditions for tax refund.

In the case where information declared in the tax refund claim differs from the management information of the tax management agency, the tax management agency shall notify in writing to the taxpayer for clarification or additional information. The time for clarification and additional information is not counted in the time limit for processing tax refund claims.

- For dossiers in the category of pre-check tax refund, no later than 40 days from the date the tax management agency issues a written notice of acceptance of the dossier and the time limit for processing the tax refund claim, the tax management agency must decide on tax refunds for taxpayers or not refund taxes to taxpayers if the dossier does not meet the conditions for tax refund.