How to handle the case of failing to pay tax in instalments in Vietnam?

How to handle the case of failing to pay tax in instalments in Vietnam?

According to the provisions of Clause 4, Article 66 of Circular 80/2021/TT-BTC, the deadline for tax payment in instalments is as follows:

Tax payment in instalments

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4. Deadline for tax payment in instalments

The latest deadline for tax payment in instalments is the last day of the month. If the taxpayer does not pay or pays insufficiently or the guarantor has not fulfilled the obligation to pay on their behalf by the agreed monthly deadline, within 05 working days from the expiration date for tax payment in instalments as committed, the tax authority shall issue a document according to form No. 02/NDAN attached to Appendix I of this Circular to the guarantor requesting the performance of the guarantee obligations under legal provisions and send it to the taxpayer.

The latest deadline for tax payment in instalments is the last day of the month.

If the taxpayer does not pay or pays insufficiently or the guarantor has not fulfilled the obligation to pay on their behalf by the agreed monthly deadline, within 05 working days from the expiration date for tax payment in instalments as committed, the tax authority shall issue a document to the guarantor requesting the performance of the guarantee obligations under legal provisions and send it to the taxpayer.

Note:

The number of installments and the amount for tax payment in instalments are stipulated in Clause 3, Article 66 of Circular 80/2021/TT-BTC as follows:

- The tax debt amount eligible for gradual payment is the tax debt figured up to the time the taxpayer requests gradual payment but not exceeding the guaranteed tax debt amount by the credit institution.

- The taxpayer is allowed to gradually pay the tax debt within a period not exceeding 12 months during the validity of the guarantee letter.

- The taxpayer is allowed to gradually pay the tax debt monthly, ensuring that each installment is not less than the average monthly gradual tax debt amount. The taxpayer must self-determine the late payment amount incurred to pay together with the gradually paid tax debt amount.

How to handle the case of failing to pay tax in instalments in Vietnam? (Image from Internet)

What documents are included in the application for tax payment in instalments in Vietnam?

Based on the provisions of Clause 17, Article 3 of the Law on Tax Administration 2019, tax debt is explained as taxes and other revenues belonging to the state budget managed and collected by tax authorities that the taxpayer has not yet paid to the state budget upon the expiry of the regulated deadline.

According to the provisions of Clause 2, Article 66 of Circular 80/2021/TT-BTC regarding the application for tax payment in instalments, it includes:

- A proposal document according to form No. 01/NDAN issued with Appendix 1 of Circular 80/2021/TT-BTC;

- A guarantee letter in accordance with the law on guarantees, mandatorily including a commitment that the guarantor will pay on behalf of the taxpayer in case the taxpayer fails to meet the tax payment in instalments deadline;

- Enforcement decision on the execution of administrative decisions regarding tax management (if any).

What is the procedure for resolving the application for tax payment in instalments in Vietnam?

Based on Clause 1, Article 66 of Circular 80/2021/TT-BTC regarding the procedure for resolving the application for tax payment in instalments as follows:

Tax payment in instalments

1. Procedure for resolving the application for tax payment in instalments

a) The taxpayer prepares the dossier requesting tax payment in instalments as prescribed in clause 2 of this Article and submits it to the directly managing tax authority.

b) If the application for tax payment in instalments is incomplete according to regulations, within 03 working days from the date of receipt, the tax authority must notify in writing according to form No. 01/TB-BSTT-NNT issued with Decree No. 126/2020/ND-CP requesting the taxpayer to explain or supplement the dossier.

In the case where the application for tax payment in instalments is complete, within 10 working days from the date of receipt of the dossier, the tax authority issues:

b.1) A notice not consenting to tax payment in instalments according to form No. 03/NDAN issued with Appendix I of this Circular for cases where the guarantee letter shows illegal signs. Concurrently, the tax authority issues a document according to form No. 05/NDAN issued with Appendix I of this Circular to the guarantor for verification, and the guarantor sends the verification result to the tax authority within the time regulated by law;

b.2) A decision to approve tax payment in instalments according to form No. 04/NDAN issued with Appendix I of this Circular for cases subject to tax payment in instalments.

Thus, the tax payment in instalments issue is carried out in the following sequence:

Step 1: Submit the dossier

The taxpayer prepares the dossier requesting tax payment in instalments and submits it to the directly managing tax authority.

Step 2: Check the dossier

- If the application for tax payment in instalments is incomplete according to regulations, within 03 working days from the date of receipt of the dossier, the tax authority must notify in writing, requesting the taxpayer to explain or supplement the dossier.

- If the application for tax payment in instalments is complete, the tax authority will decide whether to approve or disapprove the tax payment in instalments.

Step 3: Return the result

Within 10 working days from the date of reception of the dossier, the tax authority issues:

+ A notice not consenting to tax payment in instalments according to form No. 03/NDAN issued with Appendix I of this Circular for cases where the guarantee letter shows illegal signs. Concurrently, the tax authority issues a document to the guarantor for verification, and the guarantor sends the verification result to the tax authority within the time regulated by law;

+ A decision to approve tax payment in instalments for cases subject to tax payment in instalments.