When are household businesses eligible for cancellation of outstanding tax in Vietnam?

When are household businesses eligible for cancellation of outstanding tax in Vietnam?

According to Article 85 of the Law on Tax Administration 2019, the conditions under which outstanding tax, late payment interests, and fines can be written off are as follows:

Conditions for Tax Debt, Late Payment Interests, and Fines Cancellation

1. Enterprises and cooperatives declared bankrupt and have completed the payments according to bankruptcy law but have no remaining assets to pay taxes, late payment interests, and fines.

2. Individuals who are deceased or declared dead by the Court, incapacitated, with no assets, including inherited ones, to pay the outstanding taxes, late payment interests, and fines.

3. outstanding tax, late payment interests, and fines of taxpayers not covered in clauses 1 and 2 of this Article, where the tax authority has enforced measures as stipulated in point g clause 1 Article 125 of this Law, and these debts have been outstanding for over 10 years from the due date without recovery ability.

Taxpayers who are individuals, business individuals, household heads, household business heads, sole proprietorship owners, and single-member limited liability companies whose outstanding tax, late payment interests, and fines were written off under this clause must repay the State for the written-off amounts before resuming production, business operations, or establishing a new business entity.

4. Taxes, late payment interests, and fines affected by natural disasters, catastrophes, or widespread pandemics, having been granted late payment interest exemption under clause 8 Article 59 of this Law and extended tax payment period under point a clause 1 Article 62 of this Law, remain with ongoing damage, inability to recover production or business, and inability to pay taxes, late payment interests, and fines.

5. The Government of Vietnam regulates the coordination between tax authorities and business registration bodies, local governments to ensure that taxes, late payment interests, and fines written off are reimbursed to the state budget as per clause 3 of this Article before issuing business registration certificates; provide detailed regulations for clause 4 of this Article.

Thus, household businesses are eligible for cancellation of outstanding tax when they meet both of the following conditions:

- The outstanding tax of the household business have been subjected to enforcement measures such as revoking business registration certificates, investment registration certificates, establishment, and operation licenses, or practice licenses by the tax authority.

- These outstanding tax have been outstanding for over 10 years from the due date without recovery ability.

When are household businesses eligible for cancellation of outstanding tax in Vietnam? (Image from the Internet)

What does the application for cancellation of outstanding tax for household businesses in Vietnam?

According to clause 2 Article 86 of the Law on Tax Administration 2019, the documents required for cancellation of outstanding tax are as follows:

Documents for Tax Debt, Late Payment Interests, and Fines Cancellation

...

2. The documents for tax debt, late payment interests, and fines cancellation include:

a) A proposal document requesting tax debt, late payment interests, and fines cancellation from the tax authority directly managing the taxpayer eligible for cancellation;

b) Declaration of bankruptcy decision for enterprises and cooperatives declared bankrupt;

c) Related documents to request tax debt, late payment interests, and fines cancellation.

...

Thus, the documents for cancellation of outstanding tax for household businesses include:

- A proposal document requesting cancellation of outstanding tax from the tax authority directly managing the taxpayer eligible for cancellation of outstanding tax.

- Related documents to request cancellation of outstanding tax.

What is the authority to cancel outstanding tax for household businesses in Vietnam?

According to Article 87 of the Law on Tax Administration 2019, the authority to cancel outstanding tax, late payment interests, and fines is defined as follows:

Authority to cancel outstanding tax, Late Payment Interests, and Fines

1. Chairpersons of provincial People's Committees are authorized to cancel outstanding tax, late payment interests, and fines for the following cases:

a) Cases prescribed in clause 1 and clause 2 Article 85 of this Law;

b) Households, household businesses, business individuals, and individuals prescribed in clause 3 Article 85 of this Law;

c) Enterprises and cooperatives prescribed in clause 3 Article 85 of this Law with outstanding tax, late payment interests, and fines under 5,000,000,000 VND.

2. Director General of the General Department of Taxation, Director General of the General Department of Customs are authorized to cancel debts for enterprises and cooperatives prescribed in clause 3 Article 85 of this Law with outstanding tax, late payment interests, and fines from 5,000,000,000 VND to under 10,000,000,000 VND.

3. Minister of Finance decides to cancel debts for enterprises and cooperatives prescribed in clause 3 Article 85 of this Law with outstanding tax, late payment interests, and fines from 10,000,000,000 VND to under 15,000,000,000 VND.

4. Prime Minister the Government of Vietnam decides to cancel debts for enterprises and cooperatives prescribed in clause 3 Article 85 of this Law with outstanding tax, late payment interests, and fines from 15,000,000,000 VND and above.

5. Chairpersons of provincial People's Committees report the cancellation of outstanding tax situation and results to the People's Councils of the same level at the first session of the year. Minister of Finance consolidates the cancellation of outstanding tax situation to report to the National Assembly during the state budget settlement.

Thus, the authority to cancel outstanding tax for household businesses is vested in the Chairperson of the provincial People's Committee.