What are conditions for tax debt cancellation in case of natural disasters in Vietnam?

What are conditions for tax debt cancellation in case of natural disasters in Vietnam?

Pursuant to Article 24 of Decree 126/2020/ND-CP, regulations regarding the cancellation of tax debt, late payment interests, and fines in case of natural disasters or widespread epidemics are as follows:

cancellation of tax debt, late payment interests, and fines in case of natural disasters or widespread epidemics

1. Cases eligible for debt cancellation

Taxpayers suffering material damage due to influence from natural disasters, catastrophes, and widespread diseases as declared by competent state authorities.

2. Conditions for debt cancellation

The taxpayer has been exempt from late payment interests according to Clause 8, Article 59 of the Tax Administration Law and has received an extension for tax payment as per Point a, Clause 1, Article 62 of the Tax Administration Law but still incurs damages. The amount of tax, late payment interests, and fines canceln shall not exceed the remaining damage value of the taxpayer.

3. Authority for debt cancellation

The authority to cancel tax debt, late payment interests, and fines follows the stipulations in Article 87 of the Tax Administration Law.

4. Procedure, process, dossier for debt cancellation

In occurrences of natural disasters, catastrophes, or widespread diseases as declared by competent state authorities, the Ministry of Finance shall take the lead, coordinate with related ministries and central authorities, and present regulations on procedures, processes, and dossiers for the Government of Vietnam on handling the cancellation of tax debts, late payment interests, and fines for taxpayers.

Thus, the conditions for tax debt cancellation in case of natural disasters are as follows:

- The taxpayer has been exempt from late payment fees according to Clause 8, Article 59 of the Tax Administration Law 2019.

- They have received a tax payment extension according to Point a, Clause 1, Article 62 of the Tax Administration Law 2019 but still suffer damages.

The amount of tax, late payment interests, and fines canceln shall not exceed the remaining damage value of the taxpayer.

What are conditions for tax debt cancellation in case of natural disasters in Vietnam? (Image from the Internet)

Which cases are eligible for tax debt, late payment interests, and fine cancellation in Vietnam?

Pursuant to Article 85 of the Tax Administration Law 2019, the following cases are eligible for tax debt cancellation:

(1) Enterprises or cooperatives declared bankrupt that have settled payments according to bankruptcy laws and have no assets remaining to pay tax debts, late payment interests, and fines.

(2) Individuals who are deceased or declared dead by a court, individuals lacking civil capacity, without assets, including inheritable assets, to pay owed tax debts, late payment interests, and fines.

(3) Tax debts, late payment interests, and fines not covered in cases described in Clauses 1 and 2 of Article 85 of the Tax Administration Law 2019 for which the tax authority has applied enforcement measures prescribed in Point g, Clause 1, Article 125 of the Tax Administration Law 2019 and such debts have exceeded 10 years since the due date without recovery capability.

Taxpayers including individuals, business individuals, household owners, business household owners, private business owners, and single-member limited liability companies who have their tax debts, late payment interests, and fines canceln under this clause must repay these debts before resuming production, business activities, or establishing new business facilities.

(4) Tax debts, late payment interests, and fines in case of natural disasters, catastrophes, or widespread diseases which have been considered for late payment interests exemption per Clause 8, Article 59 of the Tax Administration Law 2019 and have received tax payment extensions per Point a, Clause 1, Article 62 of the Tax Administration Law 2019 but still incur damages, are unable to recover production or business activities, and have no ability to pay tax debts, late payment interests, and fines.

The Government of Vietnam prescribes the coordination between tax administration agencies and business registration authorities, as well as local governments, to ensure that canceln tax debts, late payment interests, and fines are repaid to the state budget as per Clause 3, Article 85 of the Tax Administration Law 2019 prior to the issuance of business registration certificates or enterprise registration certificates; providing detailed regulations under Clause 4, Article 85 of the Tax Administration Law 2019.

Who has the authority to cancel tax debts, late payment interests, and fines in Vietnam?

Pursuant to Article 87 of the Tax Administration Law 2019, the authority to cancel tax debt comprises:

- The Chairman of the provincial People's Committee decides on the cancellation of tax debts, late payment interests, and fines for the following cases:

+ Cases stipulated in Clauses 1 and 2 of Article 85 of the Tax Administration Law 2019;

+ Households, business households, business individuals, and individuals stipulated in Clause 3 of Article 85 of the Tax Administration Law 2019;

+ Enterprises or cooperatives within the cases stipulated in Clause 3 of Article 85 of the Tax Administration Law 2019 that have tax debts, late payment interests, and fines under 5,000,000,000 VND.

- The Director-General of the General Department of Taxation and the Director-General of the General Department of Customs decide on the cancellation of tax debts for enterprises or cooperatives within the cases stipulated in Clause 3 of Article 85 of the Tax Administration Law 2019 with tax debts, late payment interests, and fines from 5,000,000,000 VND to under 10,000,000,000 VND.

- The Minister of Finance decides on the cancellation of debts for enterprises or cooperatives within the cases stipulated in Clause 3 of Article 85 of the Tax Administration Law 2019 with tax debts, late payment interests, and fines from 10,000,000,000 VND to under 15,000,000,000 VND.

- The Prime Minister of the Government of Vietnam decides on the cancellation of debts for enterprises or cooperatives within the cases stipulated in Clause 3 of Article 85 of the Tax Administration Law 2019 with tax debts, late payment interests, and fines of 15,000,000,000 VND or more.

- The Chairman of the provincial People's Committee reports the status and results of tax debt, late payment interests, and fines cancellation to the People's Council at the same level during the annual session. The Minister of Finance consolidates the status of tax debt, late payment interests, and fines cancellation for the Government of Vietnam to report to the National Assembly upon finalizing the state budget.