What are the cases where late tax payment interest in Vietnam is not refunded?

What are the cases where late tax payment interest is charged in Vietnam?

Under Clause 1, Article 59 of the Law on Tax Administration 2019, cases where late tax payment interest is charged in Vietnam include:

- The taxpayer pays tax behind deadline, the extended deadline, the deadline written in the tax authority’s notice, tax liability imposition decision or handling decision;

- If the supplementation of the tax declaration dossier leads to an increase in the amount of tax payable, or the tax authority or inspecting authority finds that tax is understated, late payment interest shall be charged on the increase in tax over the period from the day succeeding the initial deadline or the deadline for tax payment of the initial customs declaration;

- If the supplementation of the tax declaration dossier leads to a decrease in the amount of refundable tax, or the tax authority or inspecting authority finds that refundable tax is smaller than the refunded tax, late payment interest shall be charged on the excessively refunded tax, which has to be paid back to state budget, over the period from the day on which tax is refunded;

- The cases in which outstanding debt may be paid by installments as prescribed in Clause 5, Article 124 of the Law on Tax Administration 2019;

- The cases in which administrative penalties are not imposed due to expiration of the time limit for penalty imposition but outstanding tax has to be collected as prescribed in Clause 3, Article 137 of the Law on Tax Administration 2019;

- The cases in which administrative penalties are not imposed specified in Clauses 3 and 4, Article 142 of the Law on Tax Administration 2019;

- The organization that is authorized by the tax authority to collect tax but fails to transfer the tax, late payment interest and fines paid by taxpayers to state budget in a timely manner shall pay an interest on such amount.

What are the cases where late tax payment interest in Vietnam is not refunded? (Image from the Internet)

What are the cases where late tax payment interest in Vietnam is not refunded?

According to Clause 3 Article 60 of Tax Administration Law 2019, late tax payment interest is not refunded in the following cases:

- The tax authority shall inform the taxpayer of the amount refunded but the taxpayer fails to receive it.

- The taxpayer no longer operates at the registered address, the overpaid amount has been announced through mass media and the taxpayer does not claim the refund within 01 years from the date of announcement.

- The overpaid amount has been paid for more than 10 years and the taxpayer does not request an offsetting or refund.

Can taxpayers in Vietnam apply for tax deferral?

Under Article 62 of Tax Administration Law 2019, the regulations are as follows:

Tax deferral

1. A taxpayer may apply for tax deferral in one of the following cases:

a) The taxpayer’s business suffers damage due to a force majeure events specified in Clause 27 Article 3 of this Law;

b) The taxpayer has to relocate the business location as requested by a competent authority and such relocation affects the business performance.

2. A taxpayer eligible for tax deferral mentioned in Clause 1 of this Article may have part or all of the tax deferred.

3. Tax may be deferred:

a) For up to 02 years in the cases specified in Point a Clause 1 of this Article;

b) For up to 01 year in the cases specified in Point b Clause 1 of this Article.

4. The taxpayer will not incur fines and late payment interest on the outstanding tax during the deferral period.

5. In consideration of the application for tax deferral, the head of the tax authority shall decide the amount of tax deferred and the deferral period.

Thus, tax may be deferred:

- For up to 02 years the taxpayer’s business suffers damage due to the following force majeure events:

+ Taxpayers suffering from physical damage caused by natural disasters, catastrophes, epidemics, fire, sudden accidents;

+ Other force majeure situations as prescribed by the Government.

-  For up to 01 year for the taxpayer has to relocate the business location as requested by a competent authority and such relocation affects the business performance.