What are the cases of cancellation of outstanding tax, late payment interest, and fines in Vietnam?

What are the cases of cancellation of outstanding tax, late payment interest, and fines in Vietnam?

According to Article 85 of the Law on Tax Administration 2019, the cases of cancellation of outstanding tax, late payment interest, and fines include:

- An enterprise or cooperative is declared bankrupt and, after making the payments in accordance with bankruptcy laws, has no other assets to pay tax, late payment interest or fines. (1)

- An individual is dead or declared dead or incapacitated by the court and does not have any assets, including inheritance, to pay the outstanding tax, late payment interest or fines. (2)

- The tax authority fails to collect the taxpayer’s outstanding tax, late payment interest in cases other than those specified in Clause 1 and Clause 2 of this Article within 10 years despite the implementation of enforcement measures specified in Point g Clause 1 Article 125 of this Law.

An taxpayer that is an individual, individual businesses, householder, household business owner, sole proprietor or owner of a single-member limited liability company has had the outstanding tax, late payment interest and fines cancelled before resuming the business operation or establishing a new business shall pay such debts must be paid to the State.

- In the force majeure events in which late payment interest is exempted according to Clause 8 of Article 59 of the Law on Tax Administration 2019, the taxpayer’s business is still irrecoverable and thus tax, late payment interest and fines cannot be paid even after tax deferral is granted according to Point a Clause 1 Article 62 of the Law on Tax Administration 2019.

What are the cases of cancellation of outstanding tax, late payment interest, and fines in Vietnam? (Image from the Internet)

What are the documents required for cancellation of outstanding tax, late payment interest, and fines in Vietnam?

According to Article 16 of Circular 06/2021/TT-BTC, the documents required for cancellation of outstanding tax, late payment interest, and fines include:

(1). Official Dispatch requesting cancellation of outstanding tax, late payment interest, and fines:

- Official Dispatch requesting cancellation of outstanding tax, late payment interest, and fines from the Customs Department where the taxpayer still owes outstanding tax, late payment interest, and fines (for cases under the jurisdiction of the General Director of the General Department of Customs, the Minister of Finance, the Prime Minister of the Government of Vietnam) according to Form No. 16/TXNK Appendix 1 issued with Circular 06/2021/TT-BTC: 01 original copy;

- Official Dispatch requesting cancellation of outstanding tax, late payment interest, and fines from the Customs Department or Customs Branch (in a province where the Customs Department does not have its headquarters) where the taxpayer still owes outstanding tax, late payment interest, and fines (for cases under the jurisdiction of the Chairman of the Provincial People's Committee) according to Form No. 16/TXNK Appendix 1 issued with Circular 06/2021/TT-BTC: 01 original copy.

(2). Corresponding to the cases eligible for debt cancellation as stipulated in Article 85 of the Law on Tax Administration 2019, the debt cancellation dossier includes the following documents:

- Decision by the competent state authority declaring the bankruptcy of an enterprise for the case stipulated in Clause 1 Article 85 of the Law on Tax Administration 2019: 01 photocopy with certification stamp by the authority requesting debt cancellation;

- Death certificate, death notice, or court's decision declaring a person missing; court's decision declaring loss of civil capacity or documents from the competent state authority proving that a person is dead, missing, or has lost civil capacity for the case stipulated in Clause 2 Article 85 of the Law on Tax Administration 2019: 01 photocopy with certification stamp by the authority requesting debt cancellation;

- Notice from the competent authority about the revocation of the Business Registration Certificate, Business Registration Certificate, Cooperative Registration Certificate, Household Business Registration Certificate, Investment Registration Certificate, Establishment License, and Practice License for the case stipulated in Clause 3 Article 85 of the Law on Tax Administration 2019: 01 photocopy with certification stamp by the authority requesting debt cancellation;

- Decisions on enforcement or dossier of enforcement execution measures for the administrative management decision on tax for enterprises and organizations (if any): 01 photocopy with certification stamp by the authority requesting debt cancellation;

- Document by the competent state authority certifying cases affected by natural disasters, catastrophes, pandemics as stipulated in Clause 4 Article 85 of the Law on Tax Administration 2019: 01 photocopy with certification stamp by the authority requesting debt cancellation.

What is the power to cancel outstanding tax, late payment interest, and fines in Vietnam?

According to Article 87 of the Law on Tax Administration 2019, the power to cancel outstanding tax, late payment interest, and fines in Vietnam is as follows:

- The Chairman of the Provincial People's Committee decides on debt cancellation for the following cases:

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

+ Households, household businesses, individual businesses, and individuals as stipulated in Clause 3, Article 85 of the Law on Tax Administration 2019;

+ Enterprises and cooperatives in the case stipulated in Clause 3, Article 85 of the Law on Tax Administration 2019 with outstanding tax, late payment interest, and fines of less than 5,000,000,000 VND.

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

- The Minister of Finance decides on debt cancellation for enterprises and cooperatives in the case stipulated in Clause 3, Article 85 of the Law on Tax Administration 2019 with outstanding tax, late payment interest, 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 debt cancellation for enterprises and cooperatives in the case stipulated in Clause 3, Article 85 of the Law on Tax Administration 2019 with outstanding tax, late payment interest, and fines from 15,000,000,000 VND or more.

- The Chairman of the Provincial People's Committee reports on the status and results of cancellation of outstanding tax, late payment interest, and fines to the same-level People's Council at the beginning of the first meeting of the year. The Minister of Finance consolidates the status of cancellation of outstanding tax, late payment interest, and fines for the Government of Vietnam to report to the National Assembly when finalizing the state budget.