What is the late tax payment interest rate in Vietnam?

What is the late tax payment interest rate in Vietnam?

Under point a, clause 2, Article 59 of the Law on Tax Administration 2019:

Handling of late payment interest

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2. Calculation of late payment interest:

a) The rate of late payment interest is 0,03% per day on the overdue amount;

b) The period over which late payment interest is charged is a continuous period from the day succeeding the day on which late payment interest is charged as specified in Clause 1 of this Article to the day preceding the date of payment of the outstanding tax, refunded tax, increase in tax, imposed tax.

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Thus, the rate of late payment interest is 0,03% per day on the overdue amount.

What is the late tax payment interest rate in Vietnam? (Image from the Internet)

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

* 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;

* Cases where late tax payment interest is not charged in Vietnam:

According to Clause 5, Article 59 of the Law on Tax Administration 2019, the cases where late tax payment interest is not charged in Vietnam include:

- The taxpayer provides goods/services which are covered by state budget, including sub-contractors in the contract with the investor, and are directly paid for by the investor. If such goods/services are not yet to be paid for, late payment interest will not be charged.

The outstanding tax exempt from late payment interest is the tax on the amount that is yet to be paid by state budget;

- In the cases specified in Point b, Clause 4, Article 55 of the Law on Tax Administration 2019, late payment interest shall not be charged pending the analysis result, official price, actual payment or additional customs value.

What are the procedures for handling late payment interest in Vietnam?

Under clause 2, Article 9 of Circular 06/2021/TT-BTC, the procedures for handling late payment interest are as follows:

- Responsibilities of the taxpayer:

Taxpayers self-assess the late payment interest according to clause 1, Article 9 of Circular 06/2021/TT-BTC and pay it into the state budget.

- Responsibilities of the customs authority:

Customs authorities check and handle the late payment interest as follows:

+ In cases where after 30 days from the expiry of the deadline, and the taxpayer has not paid or underpaid the tax, the late payment interest, or fines, the customs authority will notify the taxpayer of the overdue tax, fines, and late payment days through the system using Form 1 Appendix 2 or by paper using Form 01/TXNK Appendix 1 issued with Circular 06/2021/TT-BTC.

In cases where the late payment interest paid exceeds the payable interest, the customs authority handles the overpaid amount according to Article 10 of Circular 06/2021/TT-BTC.

+ In cases where the taxpayer supplements tax declarations reducing the payable tax amount, or tax authorities and competent state agencies discover that the payable tax amount decreases, the customs authority will adjust the charged late payment interest corresponding to the reduced amount.