When a taxpayer fails to accurately declare tax, will he/she be subject tax liability imposition by tax authorities in Vietnam?
What are the rules for tax declaration in Vietnam?
According to the provisions of Article 42 of the 2019 Law on Tax Administration of Vietnam on the rules for tax declaration as follows:
Rules for tax declaration and tax calculation
1. Taxpayers shall fully and accurately provide information on the tax return provided by the Minister of Finance and submit adequate documents to the tax authority.
2. Taxpayers shall calculate the tax payable themselves, except for the cases in which tax has to be calculated by the tax authority as specified by the Government.
3. Taxpayers shall declare tax at the local tax authority in charge of the area in which their headquarters are based. A taxpayer that does accounting mainly at the headquarters and has dependant units in other provinces shall declare tax in the province in which the headquarters are based and distribute tax incurred in each province. The Minister of Finance shall elaborate this Clause.
Thus, taxpayers shall fully and accurately provide information on the tax return provided by the Minister of Finance and submit adequate documents to the tax authority.
When a taxpayer fails to accurately declare tax, will he/she be subject tax liability imposition by tax authorities in Vietnam?
When a taxpayer fails to accurately declare tax, will he/she be subject tax liability imposition by tax authorities in Vietnam?
According to the provisions of Clause 1, Article 47 of the 2019 Law on Tax Administration of Vietnam as follows:
Tax dossier supplementation
1. In case the tax declaration dossier submitted to the tax authority is erroneous or inadequate, supplementary documents may be provided within 10 years from the deadline for submission of the erroneous or inadequate tax declaration dossier but before the tax authority or a competent authority announces a decision on tax document examination.
Thus, in case the tax declaration dossier submitted to the tax authority is erroneous or inadequate, supplementary documents may be provided as prescribed.
However, in Article 14 of Decree No. 126/2020/ND-CP, when a taxpayer fails to declare or truthfully and accurately declare tax, or violates the rules for tax declaration, the tax authority shall impose the payable tax amount.
Cases of tax liability imposition
Tax liability will be imposed by the tax authority if the taxpayer:
1. Fails to apply for taxpayer registration in accordance with Article 33 of the Law on Tax administration.
2. Fails to declare or truthfully and accurately declare tax in accordance with Article 42 of the Law on Tax administration.
3. Fails to submit supplementary tax documents or adequate and accurate supplementary tax documents as the basis for determination of tax payable as requested by the tax authority.
4. Fails to provide or truthfully and accurately provide information in accounting books as the basis for determination of tax obligations.
Which agency has the authority and procedures for tax liability imposition?
Pursuant to the provisions in Article 16 of Decree No. 126/2020/ND-CP, the Director of the General Department of Taxation, Directors of Provincial Departments of Taxation and Directors of District-level Departments of Taxation have the authority to impose tax liability.
Tax liability imposition authority, procedures and decision
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2. Procedures for tax liability imposition
a) When imposing tax liability, the tax authority shall send a written notice to the taxpayer and issue the tax liability imposition decision, which must specify the reasons and basis for imposition, the tax amount payable and payment deadline.
b) In case the tax authority imposes tax liability through tax audit or tax inspection, the reasons and basis for imposition, the tax amount payable and payment deadline shall be written in the tax audit or tax inspection record and tax decision issued by the tax authority.
c) In case tax liability is imposed due to the taxpayer’s violation, the tax authority shall impose administrative penalties and calculate late payment interest as prescribed by law.
3. Decision on tax liability imposition
a) When imposing tax liability, the tax authority shall issue a decision (Form No. 01/ADT in Appendix III hereof) and send it to the taxpayer within 03 working days from the day on which it is signed;
If the taxpayer has to pay tax under the tax authority’s notice, such a decision is not necessary.
b) The taxpayer shall pay tax as imposed by the tax authority. If the taxpayer does not concur with the tax liability imposed by the tax authority, the taxpayer still has to pay the tax and may request the tax authority to provide explanation or file a complaint or lawsuit against the tax authority’s decision.
Thus, when imposing tax liability, the tax authority shall send a written notice to the taxpayer and issue the tax liability imposition decision.
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