May a taxpayer that has filed for bankruptcy eligible for tax chargeoff in Vietnam?

May a taxpayer that has filed for bankruptcy eligible for tax chargeoff in Vietnam?

Based on Clause 2, Article 83 of the Law on Tax Administration 2019, cases eligible for tax chargeoff include:

Cases eligible for tax chargeoff

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2. Taxpayers who have a dissolution decision submitted to the tax administration agency, and the business registration agency for dissolution procedures, and the business registration agency has announced that the taxpayer is in the process of dissolution procedures on the national business registration information system, but the taxpayer has not completed the dissolution procedures.

The deferral period is calculated from the date the business registration agency announces that the taxpayer is undergoing dissolution procedures on the national business registration information system.

3. Taxpayers who have filed a petition to initiate bankruptcy proceedings or are petitioned by a related party entitled to file a bankruptcy petition according to the law on bankruptcy.

The deferral period is calculated from the date the competent court announces the acceptance of the bankruptcy petition or the date the taxpayer submits the enterprise's bankruptcy dossier to the tax administration agency but is in the process of settling debts as per the provisions of the Bankruptcy Law.

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Taxpayers with a dissolution decision submitted to the tax administration agency and the business registration agency but have not completed the dissolution process will have their tax debt deferred.

The deferral period is calculated from the date the business registration agency announces that the taxpayer is undergoing dissolution procedures on the national business registration information system.

Thus, taxpayers who have filed a petition to initiate bankruptcy proceedings are among the cases eligible for tax chargeoff.

May a taxpayer that has filed for bankruptcy eligible for tax chargeoff in Vietnam? (Image from the Internet)

What is the procedure for tax chargeoff in Vietnam?

The procedure for tax chargeoff is specified in Clause 3, Article 23 of Decree 126/2020/ND-CP. Specifically:

- For cases eligible for tax chargeoff as prescribed in Article 83 of the Law on Tax Administration 2019, when there is a complete dossier as stipulated in Clause 1, Article 23 of Decree 126/2020/ND-CP, the head of the tax administration agency directly managing the taxpayer issues a decision to defer the tax debt starting from the time specified in Clause 2, Article 23 of Decree 126/2020/ND-CP;

- If the taxpayer has been issued a tax chargeoff decision by the tax administration agency but the court has annulled the decision declaring a person dead, missing, or incapacitated, or the taxpayer continues business activities, the tax administration agency issues a decision to terminate the validity of the tax chargeoff decision.

The tax administration agency calculates late payment interest for the taxpayer from the date of the decision to terminate the tax chargeoff until the taxpayer fully pays the tax debt to the state budget.

- If the taxpayer has been issued a tax chargeoff decision and meets the conditions for debt write-off as prescribed in Article 85 of the Law on Tax Administration 2019, the tax administration agency issues a decision to terminate the validity of the tax chargeoff decision and conducts debt write-off as prescribed.

- In cases where the taxpayer is an individual, a business individual, the head of a household, the business owner, the owner of a private enterprise, or a one-member limited liability company that has had debts deferred but is found by the tax administration agency to have established another business, the tax administration agency issues a decision to terminate the validity of the tax chargeoff decision and calculates late payment interest from the date the taxpayer was deferred until the date the taxpayer pays the full amount of tax debt to the state budget.

What is the duration of the tax chargeoff for taxpayers who have filed for bankruptcy in Vietnam?

According to Clause 2, Article 23 of Decree 126/2020/ND-CP, the duration of tax chargeoff is regulated as follows:

- For taxpayers specified in Clause 1, Article 83 of the Law on Tax Administration 2019, the deferral period is calculated from the date of issuance of a death certificate, death notice, or legal equivalent document according to civil registry laws or a court's decision declaring death, missing, or incapacitated, until the court annuls the decision or until the debt is written off as prescribed.

- For taxpayers specified in Clause 2, Article 83 of the Law on Tax Administration 2019, the deferral period is calculated from the date the business registration agency uploads information on the national business registration information system about the taxpayer undergoing dissolution procedures, until the taxpayer resumes business activities, completes dissolution procedures, or the debt is written off as prescribed.

- For taxpayers specified in Clause 3, Article 83 of the Law on Tax Administration 2019, the deferral period is calculated from the date the competent court announces the acceptance of the bankruptcy petition or the date the taxpayer submits the enterprise's bankruptcy dossier to the tax administration agency but is undergoing debt settlement procedures according to the Bankruptcy Law 2014, until the taxpayer resumes business activities or the debt is written off as prescribed.

If the competent court has announced the acceptance of the bankruptcy petition, the taxpayer is eligible for debt deferral for the outstanding tax amount up to the point the court accepts the petition.

- For taxpayers specified in Clause 4, Article 83 of the Law on Tax Administration 2019, the deferral period is calculated from the date the tax administration agency issues a nationwide announcement that the taxpayer or their legal representative is not present at the registered business or contact address, until the taxpayer resumes business activities or the debt is written off as prescribed.

- For taxpayers specified in Clause 5, Article 83 of the Law on Tax Administration 2019, the deferral period is calculated from the date the tax administration agency issues a document requesting the competent authority to revoke, or from the effective date of the decision to revoke the business registration certificate, business registration certificate of cooperatives, or household business registration certificate, or establishment and operation license, or professional practice license, or certificate of branch registration, representative office until the taxpayer resumes business activities or the debt is written off as prescribed.

Thus, the duration of tax chargeoff for taxpayers who have filed a petition to initiate bankruptcy proceedings is calculated from the date the business registration agency uploads information on the national business registration information system about the taxpayer undergoing dissolution procedures, until the taxpayer resumes business activities, completes dissolution procedures, or the debt is written off as prescribed.