Is the late payment interest imposed for late tax payment after the extension period in Vietnam in Vietnam?

Is the late payment interest imposed for late tax payment after the extension period in Vietnam in Vietnam?

According to the provision at Clause 1 Article 59 of the Tax Administration Law 2019 regarding cases of late payment interest, the following specific details are provided:

Handling of late payment interest

1. Cases subject to late payment interest include:

a) The taxpayer is late in paying taxes compared to the stipulated deadline, the extended tax payment deadline, the deadline specified in the tax authority's notice, the deadline in the tax assessment decision, or the handling decision by the tax authority;

b) The taxpayer amends the tax declaration dossier resulting in an increase in the payable tax amount, or the tax authority or a competent state authority conducts an inspection or examination and discovers a shortfall in the payable tax amount; the additional tax amount is subject to late payment interests starting from the day following the last day of the tax payment deadline for the period with errors or omissions, or from the expiration date of the initial customs declaration;

c) The taxpayer amends the tax declaration dossier resulting in a reduction in the refunded tax amount, or the tax authority, or a competent state authority inspects and finds that the refunded tax amount should be lower than the refunded tax; thus, they must pay late payment interests on the refunded tax amount subject to recovery from the date the taxpayer receives the refund from the state budget;

d) In the case of installment tax debt payment as stipulated at Clause 5 Article 124 of this Law;

e) If not subject to administrative interests for tax administration violations due to the expiration of the statute of limitation for interests but still subject to tax retrieval for the shortfall as prescribed at Clause 3 Article 137 of this Law;

f) If not subject to administrative interests for tax administration violations for acts stipulated at Clauses 3 and 4 Article 142 of this Law;

g) The agency or organization authorized by the tax authority to collect tax is late in transferring tax payments, late interests, or fines by the taxpayers to the state budget, thus subject to late payment interests on the delayed amount as stipulated.

Payment of taxes after the expiration of the extension period will still incur late payment interests.

Is the late payment interest imposed for late tax payment after the extension period in Vietnam in Vietnam? (Image from the Internet)

What are conditions for exemption from late payment interest after the extension period in Vietnam?

Based on Clause 27 Article 3 of the Tax Administration Law 2019, Clause 8 Article 59 of the Tax Administration Law 2019, Clause 1 Article 3 of Decree 126/2020/ND-CP, taxpayers subject to late payments can be exempted from late payment interests in cases of force majeure.

Specifically, these cases include:

- Taxpayers suffer material damage due to natural disasters, catastrophes, epidemics, fires, or unexpected accidents;

- Other force majeure cases stipulated by the Government of Vietnam include wars, riots, strikes leading to production or business suspension, or risks beyond the taxpayer's subjective control that result in the taxpayer's incapability to have financial sources to pay the state budget.

Additionally, according to Clause 5 Article 59 of the Tax Administration Law 2019, the following situations are not subject to late payment interests:

- Taxpayers supplying goods or services paid from state budget sources, including subcontractors specified in contracts signed with investors and directly paid by the investors, do not have to pay late payment interests when not yet paid.

The unpaid tax amount not subject to late payment interests is the total tax amount still owed to the state budget by the taxpayer, but it does not exceed the unpaid amount by the state budget;

- Cases specified at point b, Clause 4 of Article 55 of the Tax Administration Law 2019 are not subject to late payment interests while awaiting analysis or inspection results; waiting for official pricing; waiting to determine actual payment amounts and adjustments to the customs value.

What are procedures for handling late payment interest exemption in Vietnam?

According to Clause 8 Article 59 of the Tax Administration Law 2019 and Article 23 of Circular 80/2021/TT-BTC, the steps for processing the dossier for late payment interest exemption are as follows:

Step 1: Submit a dossier

The taxpayer prepares a dossier requesting exemption from late payment interests and submits it to the direct managing tax authority or the tax authority managing the state budget revenues.

Step 2: Process the dossier

- If the dossier requesting exemption from late payment interests is incomplete, the tax authority must notify the taxpayer in writing to provide explanations or additional documents within 03 working days from the date of receiving the dossier.

- If the dossier is complete, within 10 working days from the date of receiving the dossier, the tax authority issues a Notice of non-approval for late payment interest exemption for cases not eligible for exemption, or a Decision for late payment interest exemption for eligible cases.