In which case is the taxpayer not required to pay late tax payment interest in Vietnam? How to determine the period of late tax payment?
In which cases should taxpayers pay late payment interest in Vietnam?
According to the provisions of Clause 1, Article 59 of the 2019 Law on Tax Administration of Vietnam as follows:
Handling of late tax payment
1. Late payment interest shall be charged in the following cases:
a) The taxpayer pays tax behind deadline, the extended deadline, the deadline written in the tax authority’s notice, tax liability imposition decision or handling decision;
b) If the supplementation of the tax declaration dossier leads to an increase in the amount of tax payable, or the tax authority or inspecting authority finds that tax is understated, late payment interest shall be charged on the increase in tax over the period from the day succeeding the initial deadline or the deadline for tax payment of the initial customs declaration;
c) If the supplementation of the tax declaration dossier leads to a decrease in the amount of refundable tax, or the tax authority or inspecting authority finds that refundable tax is smaller than the refunded tax, late payment interest shall be charged on the excessively refunded tax, which has to be paid back to state budget, over the period from the day on which tax is refunded;
d) The cases in which outstanding debt may be paid by installments as prescribed in Clause 5 Article 124 of this Law;
dd) The cases in which administrative penalties are not imposed due to expiration of the time limit for penalty imposition but outstanding tax has to be collected as prescribed in Clause 3 Article 137 of this Law;
e) The cases in which administrative penalties are not imposed specified in Clause 3 and Clause 4 Article 142 of this Law;
g) The organization that is authorized by the tax authority to collect tax but fails to transfer the tax, late payment interest and fines paid by taxpayers to state budget in a timely manner shall pay an interest on such amount.
Thus, when falling into one of the cases specified above, the taxpayer must pay a late payment interest.
In which case is the taxpayer not required to pay late tax payment interest in Vietnam? How to determine the period of late tax payment?
In which case is the taxpayer not required to pay late tax payment interest in Vietnam?
According to the provisions of Clause 5, Article 59 of the 2019 Law on Tax Administration of Vietnam as follows:
Handling of late tax payment
…
5. Late payment interest shall not be charged in the following cases:
a) 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;
b) In the cases specified in Point b Clause 4 Article 55 of this Law, late payment interest shall not be charged pending the analysis result, official price, actual payment or additional customs value.
Thus, 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 2019 Law on Tax Administration of Vietnam, late payment interest shall not be charged pending the analysis result, official price, actual payment or additional customs value.
How to determine the period of late tax payment in Vietnam?
According to the provisions of Clause 2, Article 59 of the 2019 Law on Tax Administration of Vietnam, the determination of the period of late tax payment in Vietnam 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.
Thus, 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 to the day preceding the date of payment of the outstanding tax, refunded tax, increase in tax, imposed tax.
In addition, the rate of late payment interest is 0,03% per day on the overdue amount.
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