Vietnam: What does the application for exemption of late payment interest include?

Vietnam: What does the application for exemption of late payment interest include?

The application for exemption of late payment interest is stipulated in Clause 2, Article 23 of Circular 80/2021/TT-BTC, the dossier includes:

- For cases due to natural disasters, catastrophes, epidemics, fires, unexpected accidents, the dossier includes:

+ A written request for exemption of late payment interest by the taxpayer according to form 01/MTCN;

Download form 01/MTCN: Here

+ Documents confirming the time, place of the natural disaster, catastrophe, epidemic, fire, unexpected accident by the competent authority (original or a copy verified by the taxpayer);

+ Document determining the material damage value by the financial authority or an independent appraisal agency (original or a notarized copy);

+ Document (original or a copy verified by the taxpayer) stipulating the responsibility of organizations or individuals to compensate for the damage (if any);

+ Proofs (original or copies verified by the taxpayer) related to compensation for damage (if any).

- In cases of other force majeures as stipulated in Clause 1, Article 3 of Decree 126/2020/ND-CP, the dossier includes:

+ A written request for exemption of late payment interest by the taxpayer according to form 01/MTCN;

Download form 01/MTCN: Here

+ Document determining the material damage value by the financial authority or an independent appraisal agency that determines the extent and value of damage in the case of war, riots, strikes making the taxpayer stop or pause production, business activities (original or copies verified by the taxpayer);

+ Documents proving the risks not arising from the subjective causes and responsibilities of the taxpayer, and the taxpayer cannot afford the financial source to pay the state budget in cases where the taxpayer encounters risks not arising from the subjective causes and responsibility of the taxpayer (original or copies verified by the taxpayer);

+ Proofs (original or copies verified by the taxpayer) related to compensation for damage by the insurance agency (if any).

Vietnam: What does the application for exemption of late payment interest include? (Image from the Internet)

What is the procedure for 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 to resolve the application for exemption of late payment interest are as follows:

Step 1: Submit the dossier

The taxpayer prepares the dossier requesting exemption of late payment interest and sends it to the direct managing tax authority or the tax authority managing the state budget collection.

Step 2: Process the dossier

- In case the dossier requesting exemption of late payment interest is incomplete, within 03 working days from the date of receipt of the dossier, the tax authority must notify in writing requesting the taxpayer to provide an explanation or supplement the dossier.

- In case the dossier requesting exemption of late payment interest is complete, within 10 working days from the date of receipt of the dossier, the tax authority issues a Notice of non-approval of the exemption of late payment interest for cases not subject to the exemption or a Decision on exemption of late payment interest for cases subject to the exemption.

How many additional days of tax payment deferral are allowed upon the deadline?

Based on Article 62 of the Tax Administration Law 2019, it is stipulated as follows:

Tax payment deferral

1. The tax payment deferral is considered based on the taxpayer’s request in one of the following cases:

a) Material damage, directly affecting production and business due to force majeure circumstances as defined in Clause 27, Article 3 of this Law;

b) Business cessation due to relocation of the production or business establishment at the request of the competent authority affecting production and business results.

2. Taxpayers eligible for the tax payment deferral stipulated in Clause 1 of this Article are allowed to defer part or all of the payable tax amount.

3. The tax payment deferral period is regulated as follows:

a) No more than 02 years from the tax payment deadline in the case stipulated in Point a, Clause 1 of this Article;

b) No more than 01 year from the tax payment deadline in the case stipulated in Point b, Clause 1 of this Article.

4. Taxpayers do not incur fines and are not required to pay late payment interest on the deferred tax amount during the deferral period.

5. The head of the direct managing tax authority bases on the tax payment deferral dossier to decide the deferred tax amount and the deferral period.

Thus, taxpayers are allowed to defer tax payments as follows:

- No more than 02 years from the tax payment deadline in the case of material damage directly affecting production and business due to encountering force majeure circumstances, such as:

+ Taxpayers suffering material damage due to natural disasters, catastrophes, epidemics, fires, unexpected accidents;

+ Other force majeure circumstances as regulated by the Government of Vietnam.

- No more than 01 year from the tax payment deadline in the case of business cessation due to the relocation of the production or business establishment at the request of the competent authority affecting production and business results.