Vietnam: What does the application for refund of overpayments include?

What are regulations on handling of overpaid tax in Vietnam?

Based on Clause 1, Article 60 of the Law on Tax Administration 2019 regulating the handling of overpaid taxes, late payment interests, and fines as follows:

Handling of Overpaid Taxes, Late Payment Interests, and Fines

1. A taxpayer who has paid taxes, late payment interests, and fines exceeding the amount required shall have the excess offset against outstanding taxes, late payment interests, and fines, or deducted from the taxes, late payment interests, and fines of the next payment, or refunded if the taxpayer no longer owes any taxes, late payment interests, or fines.

In the case where the taxpayer requests to offset the overpaid taxes, late payment interests, and fines against outstanding debts, no late payment interest shall be calculated on the offset amount from the date the overpayment arises until the date the tax administration agency carries out the offset.

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Thus, if a taxpayer overpays, they can choose one of the following three ways to handle the overpaid tax:

- Offset the overpaid tax against outstanding taxes, late payment interests, and fines.- Deduct from the taxes, late payment interests, and fines of the subsequent tax payment.- Receive a refund of the overpaid tax when the taxpayer no longer owes any taxes, late payment interests, or fines.

Vietnam: What does the application for refund of overpayments include?

Based on Article 42 of Circular 80/2021/TT-BTC regulating the application for refund of overpayments as follows:

(1) Dossier for the refund of personal income tax on income from wages and salaries:

- In the case where organizations or individuals paying wages, and salaries finalize on behalf of individuals with authorization:

+ A written request for handling overpaid taxes, late payment interests, and fines as per form No. 01/DNXLNT attached with Appendix 1 of Circular 80/2021/TT-BTC;

+ A power of attorney according to legal regulations in cases where the taxpayer does not directly carry out tax refund procedures, except for cases where a tax agent submits the tax refund dossier under a contract signed between the tax agent and the taxpayer;

+ A list of tax payment receipts as per form No. 02-1/HT attached with Appendix 1 of Circular 80/2021/TT-BTC (applicable for organizations and individuals paying income).

- In the case where individuals with income from wages and salaries directly finalize their tax with the tax authority and have overpaid tax and request a refund on the personal income tax finalization declaration, no tax refund dossier is required.

The tax authority will resolve the refund based on the personal income tax finalization dossier to handle the overpayment refund for the taxpayer as regulated.

(2) Dossier for refund of overpayments of other types of taxes and other collections includes:

- A written request for handling overpaid taxes, late payment interests, and fines as per form No. 01/DNXLNT attached with Appendix 1 of Circular 80/2021/TT-BTC;

- A power of attorney in cases where the taxpayer does not directly carry out tax refund procedures, except for cases where a tax agent submits the tax refund dossier under a contract signed between the tax agent and the taxpayer;

- Accompanying documents (if any).

(3) In cases of overpaid refunds during ownership transfer, enterprise conversion, merger, consolidation, division, separation, dissolution, bankruptcy, or cessation of activities that require tax authorities to conduct inspections at taxpayer premises as per point g Clause 1 Article 110 of Law on Tax Administration 2019 and Chapter 8 of Circular 80/2021/TT-BTC, if the Examination Conclusion or Decision and other inspection documents indicate an overpaid tax, the taxpayer does not have to submit a tax refund dossier. The tax authority shall base on the Examination Conclusion or Decision and other inspection documents to carry out procedures for refunding the overpayment to the taxpayer as stipulated.

Vietnam: What does the application for refund of overpayments include? (Image from Internet)

What are procedures for resolving tax refund applications eligible for refund before inspection in Vietnam?

Based on point b clause 1 Article 45 of Circular 80/2021/TT-BTC regulating the procedure for resolving tax refund applications eligible for refund before inspection as follows:

The tax authority shall base on the taxpayer's overpaid tax refund dossier and tax obligation information, and the taxpayer's paid taxes on the tax management application system to check and determine the case eligible for refund and the overpaid taxes, late payment interests, fines to be refunded.

(1) In cases where the overpaid tax refund dossier falls within the scope and case eligible for refund, the tax authority shall verify the amount of tax requested for refund in the tax refund dossier against the tax declaration dossier, and information on the taxpayer's fulfillment of tax obligations on the tax management application system to determine the refundable tax amount, the time of occurrence of the overpaid tax to be refunded according to the conformity of tax law.

(2) In cases where there is insufficient information to determine that the taxpayer's overpaid tax refund dossier falls within the scope and case eligible for refund, the tax authority shall issue a Notification for Explanation, Supplementation of Information, Documents as per form No. 01/TB-BSTT-NNT attached with Decree 126/2020/ND-CP and send it to the taxpayer within 03 working days from the date the tax authority receives the taxpayer's request for a refund dossier. In cases where the taxpayer implements electronic tax refund, the Notification is sent via the General Department of Taxation's electronic information portal.

Within 10 working days from the date the tax authority issues the Notification, the taxpayer is responsible for providing an explanation or supplementing information, and documents in accordance with the tax authority's notification.

If the taxpayer fails to provide an explanation or supplement the tax refund dossier within the time limit as per the tax authority's Notification, or provides an explanation or supplement that does not substantiate the declared tax amount, the tax authority will transfer the tax refund dossier to the category of pre-refund inspection and send a Notification regarding the transfer of the dossier to the category of pre-refund inspection as per form No. 05/TB-HT attached with Appendix 1 of Circular 80/2021/TT-BTC to the taxpayer within 06 working days from the date the tax refund dossier is accepted in accordance with Article 32 of Circular 80/2021/TT-BTC.

The time from the date the tax authority issues the Notification requesting explanation and supplementation to the date the tax authority receives the taxpayer’s written explanation and supplementation is not included in the tax authority's time limit for resolving the tax refund dossier.