What is the maximum fine for late submission of tax returns in Vietnam?

What is the time limit for submitting annual tax returns in Vietnam?

Based on Article 44 of the Tax Administration Law 2019 regulating the deadline for submitting tax returns for taxes calculated on an annual basis:

- No later than the last day of the third month from the end of the calendar year or fiscal year for annual tax finalization returns; no later than the last day of the first month of the calendar year or fiscal year for annual tax returns;

- No later than the last day of the fourth month from the end of the calendar year for the personal income tax finalization returns of individuals who directly finalize their own tax;

- No later than December 15 of the preceding year for the tax return of business households and individual business persons who pay taxes according to the flat rate method;

In case business households and individual business persons begin their business, the deadline for submitting the tax return is no later than 10 days from the start of the business.

Note: Taxpayers who file their tax returns through electronic transactions on the last day of the deadline for submitting the tax returns, if there is a malfunction with the tax authority's electronic portal, the taxpayers can submit their tax returns and electronic tax payment documents the next day after the tax authority's electronic portal resumes operations.

What is the maximum fine for late submission of tax returns in Vietnam? (Image from Internet)

What is the maximum fine for late submission of tax returns in Vietnam?

Based on Article 13 of Decree 125/2020/ND-CP regulating as follows:

Penalties for violations related to the deadline for submitting tax returns

1. A warning penalty for submitting tax returns late by 1 to 5 days and having mitigating circumstances.

2. A monetary fine from 2,000,000 VND to 5,000,000 VND for submitting tax returns late by 1 to 30 days, except for the cases stipulated in clause 1 of this Article.

3. A monetary fine from 5,000,000 VND to 8,000,000 VND for submitting tax returns late by 31 to 60 days.

4. A monetary fine from 8,000,000 VND to 15,000,000 VND for one of the following acts:

a) Submitting tax returns late by 61 to 90 days;

b) Submitting tax returns late by over 91 days but no tax payable arises;

c) Not submitting tax returns but no tax payable arises;

d) Not submitting attachments as stipulated in tax management regulations for enterprises with related-party transactions accompanying the corporate income tax finalization return.

5. A monetary fine from 15,000,000 VND to 25,000,000 VND for submitting tax returns late by over 90 days from the deadline, with tax payable and the taxpayer has paid the tax and late payment interest into the state budget before the tax authority announces the tax inspection decision, before the tax authority records a violation in accordance with clause 11, Article 143 of the Tax Administration Law.

If the penalty under this clause is higher than the arising tax amount, the maximum penalty equals the arising tax amount but not lower than the average level of the penalty frame specified in clause 4 of this Article.

6. Measures to remedy:

a) Obligated to fully pay the late tax payment into the state budget for violations specified in clauses 1, 2, 3, 4, and 5 of this Article if the taxpayer’s delay leads to late tax payment;

b) Obligated to submit tax returns and accompanying attachments for violations specified in points c and d of clause 4 of this Article.

Thus, in case an individual or organization must submit tax returns but fails to do so timely, they will be penalized as stipulated above.

Depending on the overdue period, fines can range up to 25,000,000 VND. Additionally, measures include paying the full late tax payment to the state budget for the violation.

Note: Based on Articles 4 and 7 of Decree 125/2020/ND-CP, the mentioned fines are applicable to organizations, while the fine for individuals is half that of organizations.

What are cases where tax returns are not required in Vietnam?

According to clause 3, Article 7 of Decree 126/2020/ND-CP, supplemented by clause 2, Article 1 of Decree 91/2022/ND-CP, taxpayers are not required to submit tax returns in the following cases:

- Taxpayers engaging only in activities or businesses that are non-taxable as per tax laws for each type of tax.

- Individuals with exempt income as per personal income tax laws and as provided in point b, clause 2, Article 79 of the Tax Administration Law 2019, except for individuals inheriting or receiving gifts of real estate; or transferring real estate.

- Export processing enterprises with only export activities are not required to submit VAT returns.

- Taxpayers temporarily suspending activities or businesses as per Article 4 of Decree 126/2020/ND-CP.

- Taxpayers who submit a termination of tax code effect, except for cases of business cessation, contract termination, or enterprise reorganization as stipulated in clause 4, Article 44 of the Tax Administration Law 2019.