What are cases of cancellation of outstanding tax in Vietnam?

What are cases of cancellation of outstanding tax in Vietnam?

According to Article 85 of the Law on Tax Administration 2019, provisions on cases eligible for cancellation of outstanding tax, late payment interest, and fines are as follows:

Cases eligible for cancellation of outstanding tax, late payment interest, and fines

1. Enterprises and cooperatives declared bankrupt, having fulfilled payments as per bankruptcy law regulations and possessing no remaining assets to pay tax debts, late payment interest, and fines.

2. Individuals who have died or been declared dead by a court, or declared as having lost civil act capacity and do not have assets, including inherited assets, to pay outstanding tax debts, late payment interest, and fines.

3. Tax debts, late payment interest, and fines owed by taxpayers not falling under the cases stipulated in clauses 1 and 2 of this Article where the tax authority has applied enforcement measures as provided in point g, clause 1, Article 125 of this Law, and these tax debts, late payment interest, and fines have exceeded 10 years from the tax payment due date with no possibility of recovery.

Individual taxpayers, business individuals, household owners, business household owners, private business owners, and single-member limited liability companies which have had their tax debts, late payment interest, and fines relieved according to this clause must repay the relieved amounts to the State before returning to production, business, or establishing a new production, business facility.

4. Tax debts, late payment interest, fines concerning cases affected by natural disasters, calamities, or epidemics of wide scope have been considered for exemption of late payment interest under the stipulations in clause 8, Article 59 of this Law and have been granted tax payment extensions as regulated in point a, clause 1, Article 62 of this Law, but still suffer damage and cannot recover business operations nor have the capacity to pay tax debts, late payment interest, and fines.

5. The Government of Vietnam coordinates between tax administration authorities, the business registration authority, and local governments to ensure that tax debts, late payment interest, and relieved fines are returned to the state budget as stipulated in clause 3 of this Article before issuing a business registration certificate, enterprise registration certificate; detailing provisions in clause 4 of this Article.

Thus, enterprises can be relieved of tax debts in the following cases:

- Enterprises declared bankrupt, having fulfilled payments as per bankruptcy law regulations, and possessing no remaining assets to pay tax debts.

- Tax debts of enterprises not falling under clause 1, Article 85 of the Law on Tax Administration 2019, where the tax authority has applied enforcement measures such as revoking business registration certificates, investment registration certificates, establishment and operation licenses, practice licenses, and these tax debts have exceeded 10 years from the tax payment due date with no possibility of recovery.

- Enterprises affected by natural disasters, calamities, or epidemics of wide scope, considered for exemption from late payment interest and granted tax payment extensions, still suffer damage, cannot recover business operations, and lack the capacity to pay tax debts.

What are cases of cancellation of outstanding tax in Vietnam? (Image from Internet)

Application for cancellation of outstanding tax for enterprises

Pursuant to clause 2, Article 86 of the Law on Tax Administration 2019, the dossier for cancellation of outstanding tax for enterprises includes:

- A written request for cancellation of outstanding tax from the tax administration authority directly managing the taxpayer eligible for cancellation of outstanding tax;

- Bankruptcy declaration decision for the case of enterprises declared bankrupt;

- Documents related to the request for cancellation of outstanding tax.

Which authority shall cancel outstanding tax for enterprises in Vietnam?

According to Article 87 of the Law on Tax Administration 2019, provisions on the authority for the cancellation of outstanding tax, late payment interest, and fines are as follows:

Authority for cancellation of outstanding tax, late payment interest, and fines

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

a) Cases stipulated in clauses 1 and 2, Article 85 of this Law;

b) Households, business households, business individuals, and individuals stipulated in clause 3, Article 85 of this Law;

c) Enterprises and cooperatives falling under the case stipulated in clause 3, Article 85 of this Law with tax debts, late payment interest, and fines under VND 5,000,000,000.

2. The General Director of the General Department of Taxation or the General Director of the General Department of Vietnam Customs decides on the relief for enterprises and cooperatives falling under the case stipulated in clause 3, Article 85 of this Law with tax debts, late payment interest, and fines from VND 5,000,000,000 to under VND 10,000,000,000.

3. The Minister of Finance decides on the relief for enterprises and cooperatives falling under the case stipulated in clause 3, Article 85 of this Law with tax debts, late payment interest, and fines from VND 10,000,000,000 to under VND 15,000,000,000.

4. The Prime Minister of the Government of Vietnam decides on the relief for enterprises and cooperatives falling under the case stipulated in clause 3, Article 85 of this Law with tax debts, late payment interest, and fines from VND 15,000,000,000 or more.

5. The Chairman of the Provincial People's Committee reports the situation and results of tax debt, late payment interest, and fine relief to the People's Council at the same level at the beginning of the year session. The Minister of Finance consolidates the situation on debt relief to report to the Government of Vietnam for the National Assembly when approving the state budget balance.

Thus, the authority for cancellation of outstanding tax for enterprises belongs to:

- The Prime Minister of the Government of Vietnam.

- The Minister of Finance.

- The General Director of the General Department of Vietnam Customs.

- The General Director of the General Department of Taxation.

- The Chairman of the Provincial People's Committee.