What is the procedure for requesting exemption from late payment interest on tax in Vietnam?

When is late payment interest on tax not charged in Vietnam?

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

- Taxpayers who supply goods and services that are paid for by state budget sources, including subcontractors as specified in contracts with the principal investor and directly paid by the investor but have not been paid, are not subject to late payment interest.

The outstanding tax amount not subject to late payment interest is the total amount of tax owed to the state budget by the taxpayer, but not exceeding the amount that the state budget has not yet paid.

- Cases stipulated at Point b, Clause 4, Article 55 of the 2019 Tax Administration Law, where late payment interest is not calculated during the period awaiting analysis or inspection results; during the period when the official price is not available; during the period when the final payment amount and adjustments added to customs value are not determined.

Procedure for requesting exemption from late payment interest on tax in Vietnam. (Image from the Internet)

What is the procedure for requesting exemption from late payment interest on tax in Vietnam?

According to Article 22 of Circular 80/2021/TT-BTC, the procedure, documents for not calculating late payment interest on tax are as follows:

* The time for not calculating late payment interest for cases stipulated at Point a, Clause 5, Article 59 of the 2019 Tax Administration Law is from the date the state budget-using unit is supposed to pay the taxpayer but has not yet paid, to the date the payment by the state budget-using unit to the taxpayer is made.

* The procedure for requesting exemption from late payment interest for cases stipulated at Point a, Clause 5, Article 59 of the 2019 Tax Administration Law, specifically:

- Procedure

Step 1: The taxpayer prepares a dossier requesting exemption from late payment interest and sends it to the directly managing tax authority or the tax authority responsible for managing state budget revenue.

Step 2: If the dossier requesting exemption from late payment interest is incomplete as prescribed, within 03 working days from the date of receiving the dossier, the tax authority must issue a written notice requesting the taxpayer to explain or supplement the dossier.

If the dossier requesting exemption from late payment interest is complete, within 10 working days from the date of receiving the dossier, the tax authority issues a Notice of non-acceptance of exemption from late payment interest for cases that do not qualify or a Notice of acceptance of exemption from late payment interest for cases that qualify.

- Dossier requesting exemption from late payment interest

+ Written request for exemption from late payment interest according to form 01/KTCN issued with Appendix 1 of Circular 80/2021/TT-BTC;

+ Document confirming that the taxpayer has not yet been paid by the state budget-using unit according to form 02/KTCN issued with Appendix 1 of Circular 80/2021/TT-BTC (original or certified copy);

+ Goods and service supply contract signed with the principal investor (original or copy certified by the taxpayer).

When is late payment interest on tax charged in Vietnam?

According to Clause 1, Article 59 of the 2019 Tax Administration Law, cases where late payment interest must be paid include:

- Taxpayers who are late in paying tax compared to the prescribed deadline, the extended tax payment deadline, the deadline specified in the tax authority's notice, the deadline in the tax assessment decision or the tax authority's handling decision.

- Taxpayers who file a supplementary tax return that increases the payable tax amount or when the tax authority or competent state agency inspects and detects an under-declaration of the tax amount must pay late payment interest on the additional payable tax amount from the day following the last date of the tax payment deadline of the tax period with errors or from the date the initial customs declaration's tax payment deadline expires.

- Taxpayers who file a supplementary tax return resulting in a decrease in the refunded tax amount or when the tax authority or competent state agency inspects and detects that the refunded tax amount is less than the refunded tax amount must pay late payment interest on the refunded tax amount that needs to be recovered from the date of receiving the refund from the state budget.

- Cases of deferred tax payment as stipulated in Clause 5, Article 124 of the 2019 Tax Administration Law.

- Cases not subject to administrative sanctions for tax management violations due to expiration of the statute of limitations but are subject to tax collection as stipulated in Clause 3, Article 137 of the 2019 Tax Administration Law.

- Cases not subject to administrative sanctions for tax management violations for acts stipulated in Clause 3 and Clause 4, Article 142 of the 2019 Tax Administration Law.

- Agencies or organizations authorized by the tax authority to collect taxes but delay transferring the tax, late payment interest, and fines of the taxpayers to the state budget must pay late payment interest according to the regulations.