When is charging late payment interest in Vietnam suspended?

What is the formula for calculating late payment interest in Vietnam?

According to Clause 2,  Article 59 of the Tax Administration Law 2019, the regulation is as follows:

Handling of late tax payment

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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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The formula for calculating late payment interest per day is as follows:

Late payment interest per day = 0.03% x Overdue tax amount

When is charging late payment interest in Vietnam suspended? (Image from the Internet)

When is charging late payment interest in Vietnam suspended?

Under Clause 6, Article 59 of the Law on Tax Administration 2019, charging late payment interest in Vietnam is suspended in case of chargeoff according to the provisions of Article 83 of the Law on Tax Administration 2019:

- The taxpayer is dead or declared dead, missing or incapacitated by the court.

The chargeoff date is the issuance date of the death certificate or an equivalent document as prescribed by civil registration laws, or the court’s declaration that the taxpayer is dead, missing or incapacitated.

- The taxpayer submits a dissolution decision to the tax authority or business registration authority, the business registration authority has posted a notice on the national business registration portal but the taxpayer has not completed the dissolution procedures.

The chargeoff date is the day on which the business registration authority posts the aforementioned notice on the national business registration portal.

- The taxpayer has filed for bankruptcy or requested to file for bankruptcy in accordance with bankruptcy laws.

The chargeoff date is the day on which the court issues the notice of receipt of the bankruptcy filing or the day on which the taxpayer files for the bankruptcy to the tax authority in accordance with the Law on Bankruptcy.

- The taxpayer no longer does business at the registered address, the tax authority and the People’s Committee of the commune has confirmed that the taxpayer is no longer present in the area and made a nationwide announcement that the taxpayer or the taxpayer’s legal representative is not present at the registered address.

The chargeoff date is the day on which the aforesaid announcement is made.

- The taxpayer’s certificate of business registration, certificate of enterprise registration, certificate of cooperative registration, license for establishment and operation or practice certificates has been revoked by a competent authority, whether such revocation is requested by the tax authority or not.

The chargeoff date is the date on which the certificate of business registration, certificate of enterprise registration, certificate of cooperative registration, license for establishment and operation or practice certificates is revoked by a competent authority.

What are the cases where late payment interest shall not be charged in Vietnam?

Under Clause 5, Article 59 of the Law on Tax Administration 2019, late payment interest shall not be charged in the following cases:

- 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.