Shalll outstanding tax of enterprises be cancelled upon bankrupcy in Vietnam? Who has the authority to cancel outstanding tax?

Shalll outstanding tax of enterprises be cancelled upon bankrupcy in Vietnam?

According to Clause 1, Article 85 of the Law on Tax Administration 2019, the cases eligible for cancellation of outstanding tax are stipulated as follows:

Cases Eligible for outstanding tax, late payment interest, Penalty cancellation

1. Businesses or cooperatives declared bankrupt and have made payments in accordance with bankruptcy law but have no remaining assets to pay the tax, late payment interest, or penalties.

2. Individuals who have died or have been declared dead, lost civil act capacity by the court, and have no assets, including inherited assets, to pay the outstanding tax, late payment interest, or penalties.

3. outstanding taxs, late payment interest, and penalties of taxpayers not falling under the cases stipulated in Clause 1 and Clause 2 of this Article, where the tax administration authority has applied enforcement measures as per Point g, Clause 1, Article 125 of this Law, and these debts have exceeded 10 years from the due date without the ability to be recovered.

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Based on the above regulations, it can be seen that a business declared bankrupt that has made payments in accordance with the bankruptcy law and has no remaining assets to settle outstanding taxs is eligible for cancellation of outstanding tax.

Shalll outstanding tax of enterprises be cancelled upon bankrupcy in Vietnam? Who has the authority to cancel outstanding tax? (Image from the Internet)

What documents are required for application for cancellation of outstanding tax in Vietnam?

According to Point a, Clause 2, Article 65 of Circular 80/2021/TT-BTC, the required documents for cancellation of outstanding tax are stipulated as follows:

Documents for outstanding tax, Late Payment Interest, Penalty cancellation

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2. Documents for outstanding tax, Late Payment Interest, Penalty cancellation

a) For businesses or cooperatives declared bankrupt as stipulated in Clause 1, Article 85 of the Law on Tax Administration, the documents include:

a.1) A request letter according to Form No. 01/XOANO enclosed in Appendix I of this Circular;

a.2) Bankruptcy declaration decision for businesses or cooperatives (original or copy certified by the tax authority);

a.3) Asset distribution documents by the executor showing outstanding taxs that can or cannot be recovered (original or copy certified by the tax authority);

a.4) Decision to suspend execution of the bankruptcy declaration decision by the civil judgment enforcement agency (original or copy certified by the tax authority);

a.5) Notice of outstanding tax at the time of the cancellation request (original or copy certified by the tax authority).

b) For individuals who have died or have been declared dead or lost civil act capacity as stipulated in Clause 2, Article 85 of the Law on Tax Administration, the documents are prepared as follows:

b.1) In the case of individuals who have died or been declared dead by the court:

b.1.1) A request letter according to Form No. 01/XOANO enclosed in Appendix I of this Circular;

b.1.2) Death certificate, or Death announcement, or the court decision declaring a person dead, or documentation replacing the Death announcement as per regulations regarding civil status registration and management (original or copy certified by the tax authority);

b.1.3) A document certified by the commune people's committee of the last residence of the deceased individual confirming the deceased has no assets, including inherited assets (original or copy certified by the tax authority);

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Thus, the documents required for a bankrupt business's cancellation of outstanding tax application include the following:

- A request letter according to Form No. 01/XOANO enclosed in Appendix I of Circular 80/2021/TT-BTC;

- Bankruptcy declaration decision for businesses or cooperatives (original or copy certified by the tax authority);

- Asset distribution documents by the executor showing outstanding taxs that can or cannot be recovered (original or copy certified by the tax authority);

- Decision to suspend execution of the bankruptcy declaration decision by the civil judgment enforcement agency (original or copy certified by the tax authority);

- Notice of outstanding tax at the time of the cancellation request (original or copy certified by the tax authority).

Who has the authority to cancel outstanding tax upon bankrupcy in Vietnam?

According to Clause 1, Article 87 of the Law on Tax Administration 2019, the authority to authorize cancellation of outstanding tax is stipulated as follows:

Authority to Authorize outstanding tax, Late Payment Interest, penalty cancellation

1. The Chairman of the Provincial People's Committee decides on the outstanding tax, late payment interest, penalty cancellation for the following cases:

a) Cases stipulated in Clause 1 and Clause 2 of this Article;

b) Households, business households, business individuals, individuals stipulated in Clause 3 of this Article;

c) Businesses, cooperatives in cases stipulated in Clause 3 of this Article with outstanding tax, late payment interest, penalty less than 5,000,000,000 VND.

2. The Director General of the General Department of Taxation, the Director General of the General Department of Customs decides on cancellation for businesses, cooperatives in cases stipulated in Clause 3 of this Article with outstanding tax, late payment interest, penalty from 5,000,000,000 VND to less than 10,000,000,000 VND.

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According to the above stipulations, the Chairman of the Provincial People's Committee has the authority to authorize cancellation of outstanding tax for businesses declared bankrupt.