Who has the power to decide the cancellation of outstanding tax, late payment interest, and fines in Vietnam?

Who has the power to decide the cancellation of outstanding tax, late payment interest, and fines in Vietnam?

Under the provisions of Article 87 of the Law on Tax Administration 2019, the power to decide the cancellation of outstanding tax, late payment interest and fines in Vietnam is stipulated as follows:

- Presidents of the People’s Committees of provinces shall decide cancellation of outstanding tax, late payment interest and fines in the following cases:

+ The cases specified in Clause 1 and Clause 2 Article 85 of the Law on Tax Administration 2019;

+ The households, household businesses, individual businesses and individuals in the cases specified in Clause 3 Article 85 of the Law on Tax Administration 2019;

+ The enterprises and cooperatives in the cases specified in Clause 3 Article 85 of the Law on Tax Administration 2019 whose outstanding tax, late payment interest and fines is below VND 5.000.000.000.

- The Director of the General Department of Taxation, the Director of the General Department of Customs shall decide cancellation of debts from VND 5.000.000.000 to under VND 10.000.000.000 owed by enterprises and cooperatives in the cases specified in Clause 3 Article 85 of the Law on Tax Administration 2019.

- The Minister of Finance shall decide cancellation of debts from VND 10.000.000.000 to under VND 15.000.000.000 owed by enterprises and cooperatives in the cases specified in Clause 3 Article 85 of the Law on Tax Administration 2019.

- The Prime Minister shall decide cancellation of debts from VND 15.000.000.000 and above owed by enterprises and cooperatives in the cases specified in Clause 3 Article 85 of the Law on Tax Administration 2019

- Presidents of the People’s Committees of provinces shall submit reports on cancellation of outstanding tax, late payment interest and fines to the People’s Committees of the same provinces during the first meeting of the year. The Minister of Finance shall submit consolidated reports on cancellation of outstanding tax, late payment interest and fines to the Government, which will report to the National Assembly when preparing the annual state budget statement.

Which entities are responsible for processing applications for cancellation of outstanding tax, late payment interest and fines in Vietnam?

Under Article 88 of the Law on Tax Administration 2019, the responsibility for processing applications for cancellation of outstanding tax, late payment interest and fines is specified as follows:

- If the application is incomplete, the competent authority or person that receives the application shall inform the sending authority within 10 working days from the date of receipt.

- The competent person shall decide whether to grant or reject the application within 60 days from the receipt of the application and send a notice to the sending authority.

Who has the power to decide the cancellation of debts of tax, late payment interests, and fines in Vietnam? (Image from the Internet)

What are the cases of cancellation of outstanding tax, late payment interest, and fines in Vietnam?

According to Article 85 of the Law on Tax Administration 2019, the cases of cancellation of outstanding tax, late payment interest, and fines in Vietnam include:

- An enterprise or cooperative is declared bankrupt and, after making the payments in accordance with bankruptcy laws, has no other assets to pay tax, late payment interest or fines. (1)

-  An individual is dead or declared dead or incapacitated by the court and does not have any assets, including inheritance, to pay the outstanding tax, late payment interest or fines. (2)

- The tax authority fails to collect the taxpayer’s outstanding tax, late payment interest in cases other than those specified in (1) and (2) within 10 years despite the implementation of enforcement measures specified in Point g Clause 1 Article 125 of the Law on Tax Administration 2019.

A taxpayer that is an individual, individual business, householder, household business owner, sole proprietor or owner of a single-member limited liability company has had the outstanding tax, late payment interest and fines cancelled before resuming the business operation or establishing a new business shall pay such debts must be paid to the State.

- In the force majeure events in which late payment interest is exempted according to Clause 8 Article 59 of this Law, the taxpayer’s business is still irrecoverable and thus tax, late payment interest and fines cannot be paid even after tax deferral is granted according to Point a Clause 1 Article 62 of the Law on Tax Administration 2019.

- The Government shall provide for cooperation between tax authorities, business registration authorities and local authorities in making sure cancelled tax, late payment interest and fines are paid to state budget in accordance with Clause 3 of Article 85 of the Law on Tax Administration 2019 before the certificate of business registration or certificate of enterprise registration is issued; elaborate Clause 4 of Article 85 of the Law on Tax Administration 2019.