How much late payment interest must be paid in case of late tax payment in Vietnam?

How much late payment interest must be paid in case of late tax payment in Vietnam?

Late payment of taxes will incur late payment interest as currently prescribed.

Based on Clause 2, Article 59 of the Law on Tax Administration 2019, the calculation and timeline for late payment interest are prescribed as follows:

Handling late payment of taxes

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2. The calculation and timeline for late payment interest are as follows:

a) The late payment interest is calculated at 0.03%/day on the amount of unpaid tax;

b) The timeline for calculating late payment interest is continuous from the day following the day the late payment occurs as stipulated in Clause 1 of this Article until the day before the day the overdue tax, tax recovery, additional tax, assessed tax, and delayed transferred tax are paid into the state budget.

Thus, the late payment interest for one day is calculated using the formula:

Additionally, based on Clause 1, Article 42 of Decree 125/2020/ND-CP as follows:

Late payment of administrative penalties on taxes, invoices

1. Calculation of late payment penalties

a) Organizations and individuals that delay payment of administrative penalties on taxes and invoices will be subject to a late payment penalty calculated at 0.05%/day on the unpaid penalty amount.

b) The number of days for which a late payment penalty is calculated includes holidays and weekends as regulated by policies and is counted from the day following the penalty due date to the day before the organization or individual pays the penalties into the state budget.

Thus, the late payment penalty for administrative tax violations for one day is calculated using the formula:

How much late payment interest must be paid in case of late tax payment in Vietnam? (Image from the Internet)

When must late payment interest on taxes be paid in Vietnam?

According to Clause 1, Article 59 of the Law on Tax Administration 2019, the specific cases where late payment interest on taxes must be paid are as follows:

- Taxpayers who pay taxes late compared to the prescribed deadline, the extended tax payment deadline, the deadline specified in the notice of the tax authority, the deadline in the tax assessment decision or the handling decision of the tax authority;

- Taxpayers who amend tax declarations resulting in an increase in the payable tax amount or if the tax authority or competent state authority discovers additional tax obligations during inspections or audits, must pay late payment interest on the increased tax amount from the day following the final tax payment deadline of the tax period with errors or from the end of the deadline for the original customs declaration;

- Taxpayers who amend tax declarations resulting in a reduction of the refunded tax amount or if the tax authority or competent state authority discovers that the refunded tax amount is less than the refunded amount must pay late payment interest on the amount to be recovered from the date of receiving the refund from the state budget;

- Cases where taxpayers are allowed to pay overdue taxes in installments as stipulated in Clause 5, Article 124 of the Law on Tax Administration 2019;

- Cases where administrative penalties for tax management violations are not imposed due to the expiration of the statute of limitations for penalties but the owed tax amount is recovered as stipulated in Clause 3, Article 137 of the Law on Tax Administration 2019;

- Cases where administrative penalties for tax management violations are not imposed on actions specified in Clauses 3 and 4, Article 142 of the Law on Tax Administration 2019;

- Agencies or organizations assigned by the tax authority to collect taxes that delay transferring the tax, late payment interest, or penalties of taxpayers to the state budget must pay late payment interest on the delayed amounts according to regulations.

Vietnam: When is late payment interest on taxes exempted?

Cases where late payment interest on taxes is not calculated are stipulated in Clause 5, Article 59 of the Law on Tax Administration 2019 as follows:

- Taxpayers providing goods or services paid by state budget funds, including subcontractors specified in contracts with the investor and directly paid by the investor, but have not yet been paid, are not subject to late payment interest.

The total amount of outstanding tax not subject to late payment interest is the total amount of tax owed by the taxpayer from the state budget but not exceeding the amount not yet paid by the state budget;

- Cases specified at point b, Clause 4, Article 55 of the Law on Tax Administration 2019 where late payment interest is not calculated during the time waiting for analysis results, assessment; during the time the official price has not been determined; during the time the actual payment amount, adjustments adding to the customs value have not been determined.

Note: Taxpayers must pay late payment interest and are exempt from paying late payment interest in cases of force majeure as stipulated in Clause 27, Article 3 of the Law on Tax Administration 2019, including:

- Taxpayers suffering material damage due to natural disasters, calamities, epidemics, fire, unexpected accidents;

- Other force majeure cases as prescribed by the Government of Vietnam.