Shall a taxpayer no longer does business at the registered address be entitlerd to tax chargeoff in Vietnam?
Shall a taxpayer no longer does business at the registered address be entitlerd to tax chargeoff in Vietnam?
On December 2, 2024, the General Department of Taxation of Vietnam issued Official Dispatch 5618/TCT-QLN 2024 regarding tax chargeoff and debt cancellation. Within this, the cases where businesses abandoning their registered business addresses can have their tax debt deferred are clarified by the General Department of Taxation of Vietnam as follows:
Based on Clause 4, Article 83 of the Law on Tax Administration 2019, which stipulates the cases eligible for tax chargeoff, as follows:
Cases eligible for tax chargeoff
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- Taxpayers cease business activities at the registered business address with the business registration authority, and the tax authority has cooperated with the People's Committee of the commune where the taxpayer has its headquarters or contact address to verify information that the taxpayer is not present in the area and has announced nationwide about the taxpayer or the taxpayer's legal representative not being present at the registered address with the tax authority.
The deferment period is calculated from the date the tax authority issues a notification nationwide that the taxpayer or the legal representative of the taxpayer is not present at the registered business address or contact address.
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Referring to point d, Clause 1, Article 23 of Decree 126/2020/ND-CP, which specifies the procedures, dossiers, and deferment timeframe:
Procedures, dossiers, deferment timeframe
- Dossiers for tax chargeoff
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d) For taxpayers as outlined in Clause 4, Article 83 of the Law on Tax Administration: A written confirmation between the tax authority and the commune People's Committee where the taxpayer has its headquarters or contact address about the taxpayer not operating at the registered business address or contact address and a notification from the tax authority about the taxpayer not operating at the registered address (original or a copy issued from the original register or authenticated copy).
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Thus, if a business is no longer operating at the registered address and meets the dossier requirements for debt deferment as prescribed in point d, Clause 1, Article 23 of Decree 126/2020/ND-CP, the Tax Department will consider the deferment of tax debt.
For tax debt arising after the deferment process, the Tax Department will classify it as hard-to-collect debt and monitor it in accordance with the tax debt management process prescribed in Decision 1129/QD-TCT 2022.
Shall a taxpayer no longer does business at the registered address be entitlerd to tax chargeoff in Vietnam? (Image from the Internet)
What are other cases eligible for tax chargeoff in Vietnam?
Based on Article 83 of the Law on Tax Administration 2019, the cases eligible for tax chargeoff are specifically regulated as follows:
(1) The taxpayer is deceased, declared dead or missing, or lacks civil conduct capacity by a court.
The deferment period is calculated from the date of issuance of a death certificate, death notice, or equivalent document as stipulated by civil status law or the court's decision declaring the person dead, missing, or lacking civil conduct capacity.
(2) The taxpayer has a dissolution decision sent to the tax administration authority and business registration authority for dissolution procedures, and the business registration authority has announced that the taxpayer is in the dissolution process on the national business registration information system but has not completed the dissolution procedures.
The deferment period is calculated from the date the business registration authority announces the taxpayer is in the dissolution process on the national business registration information system.
(3) The taxpayer has filed for bankruptcy or has an application filed by an eligible party for bankruptcy processing under the Bankruptcy Law.
The deferment period is from the date the competent court notifies the acceptance of the bankruptcy filing or when the taxpayer has submitted the bankruptcy dossier to the tax authority but is processing payment and debt settlement under the Bankruptcy Law 2014.
(4) Taxpayers cease business activities at the registered business address with the business registration authority, and the tax administration authority has cooperated with the commune People's Committee where the taxpayer has its headquarters or contact address to verify information that the taxpayer is not present in the area and has announced nationwide about the taxpayer or its legal representative not being present at the address registered with the tax authority.
The deferment period is calculated from the date the tax administration authority issues a nationwide notification about the taxpayer or its legal representative not being present at the registered business address or contact address.
(5) The taxpayer has been proposed by the tax administration authority to have their business registration certificate, business registration certificate, cooperative registration certificate, establishment and operation license, or practicing license revoked or has already had it revoked by the competent authority.
The deferment period is calculated from the date the tax administration authority proposes the competent authority revoke or from the effective date of the decision to revoke the business registration certificate, business registration certificate, cooperative registration certificate, establishment and operation license, or practicing license.
Who has the authority to decide on tax chargeoff in Vietnam?
Based on Article 84 of the Law on Tax Administration 2019, which regulates the procedures, dossiers, timeline, and authority for tax chargeoff:
Procedures, dossiers, timeline, authority for tax chargeoff
- The Government of Vietnam prescribes the procedures, dossiers, and timeline for tax chargeoff in applicable cases.
- The head of the tax administration authority directly managing the taxpayer decides on the deferment.
- The tax administration authority continues to monitor the deferred tax debts and cooperates with relevant agencies to recover tax debts when the taxpayer is capable of paying taxes or executes debt cancellation as prescribed in Article 85 of this Law.
Therefore, according to legal provisions, the authority to decide on tax chargeoff lies with the head of the tax administration authority directly managing the taxpayer.
