Vietnam: Tax authorities must adjust, and reduce the amount of late payment calculated in case the request for extension is sent after the accounting books close?
- How to handle the adjustment of late payment of tax and land rent after the tax authority has closed the accounting books in Vietnam?
- In which case is the late payment interest not charged for tax or land rent in Vietnam?
- How is late payment tax adjusted according to Vietnamese regulations?
- 07 cases where taxpayers have to pay late payment interest according to Vietnamese regulations?
How to handle the adjustment of late payment of tax and land rent after the tax authority has closed the accounting books in Vietnam?
Pursuant to the guidance in subsection 4.2, Section 4, Official Dispatch 2194/TCT-KK in 2022, dealing with the adjustment of late payment interest, tax authorities have calculated:
- In case the request for extension is sent after the tax authority closes the monthly tax accounting book and before September 30, 2022, the tax authority has calculated the late payment interest for the tax and land rent. During the extended period as prescribed in Decree No. 34/2022/ND-CP, the tax authority shall adjust and reduce the calculated amount of late payment.
Thus, in case the extension request is sent after the tax authority closes the accounting books and before September 30, 2022, the tax authority will adjust and reduce the calculated late payment amount.
In which case is the late payment interest not charged for tax or land rent in Vietnam?
Pursuant to the provisions of Clause 4, Article 5 of Decree 34/2022/ND-CP, which stipulates that late payment interest will not be charged for tax and land rent amounts
“ Article 5. Deferral procedures
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4. Late payment interest shall not be charged on deferred tax and land rents during the deferral period (including the cases in which the taxpayer sends the deferral application to the tax authority after submission of the tax declaration dossier as prescribed in Clause 1 of this Article, and the cases in which a competent authority, through inspection, discovers an increase in tax payable by the taxpayer that is eligible for a deferral during the tax periods eligible for deferral). In case the tax authority has charged late payment interest (if any) but the taxpayer's deferral application is granted in accordance with this Decree, the tax authority shall cancel the late payment interest.”
Thus, late payment interest shall not be charged for the extended tax and land rent amount during the extended payment deadline as prescribed above
Vietnam: Tax authorities must adjust, and reduce the amount of late payment calculated in case the request for extension is sent after the accounting books close?
How is late payment tax adjusted according to Vietnamese regulations?
Pursuant to Clause 3, Article 21 of Circular 80/2021/TT-BTC stipulates:
“Article 21. Settlement of late tax payment
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3. Decreasing late payment interest
a) In case the taxpayer makes a supplementary declaration that decreases tax obligations, the taxpayer shall determine the decreased late payment interest on the supplementary declaration. The tax authority shall determine the decreased late payment interest on the basis of information about the taxpayer's obligations and send a notification to the taxpayer according to Form No. 03/TTN in Appendix I hereof.
b) In case the tax authority or a competent authority, upon inspection, discovers that the tax payable is decreased or issues a decision on or notification of decrease in tax payable, the tax authority shall decrease the late payment interest in proportion to the decrease in tax payable and send a notification to the taxpayer according to Form No. 03/TTN in Appendix I hereof.”
07 cases where taxpayers have to pay late payment interest according to Vietnamese regulations?
Pursuant to the provisions of Clause 1, Article 59 of the Law on Tax Administration 2019, the handling of late payment of tax is:
“Article 59. 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, the cases where late payment interest must be paid are specified as above.
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