Can VAT payment in 2022 be extended in Vietnam?

Can VAT payment in 2022 be extended in Vietnam?

Pursuant to Point a, Clause 1, Article 4 of Decree 34/2022/ND-CP (expires from January 1, 2023), there are regulations on deferral of tax and land rents as follows:

1. VAT (except VAT during importation)

a) Deferral is granted to VAT (including VAT distributed to provinces other than the province in which the taxpayer is headquartered, separately incurred VAT) incurred during the period from March to August 2022 (for monthly declared VAT) and tax periods of the first quarter (Q1) and second quarter (Q2) of 2022 (for quarterly declared VAT) payable by the enterprises and organizations mentioned in Article 3 of this Decree. Deferral period shall be 06 months for VAT incurred during the period from March to May, 2022 and Q1 2022; 05 months for VAT incurred during June 2022 and Q2 2022; 04 months for VAT incurred during July 2022; 03 months for VAT incurred during August 2022. These deferral periods begin from the deadline for payment of VAT prescribed by regulations of law on tax administration.

In case the taxpayer's supplementation of the tax declaration dossier of the period in which tax is deferred leads to increase in the amount of VAT payable and the dossier is sent to the tax authority before expiration of the deferral period, the deferred tax shall also include the increase in tax payable.

Enterprises and organizations that are eligible for deferral shall complete and submit the monthly/quarterly VAT return in accordance with applicable laws but are not required to pay the VAT specified in the VAT return. Deadlines for payment of monthly/quarterly VAT:

- The deadline for payment of VAT of March 2022 is October 20, 2022.

- The deadline for payment of VAT of April 2022 is November 20, 2022.

- The deadline for payment of VAT of May 2022 is December 20, 2022.

- The deadline for payment of VAT of June 2022 is December 20, 2022.

- The deadline for payment of VAT of July 2022 is December 20, 2022.

- The deadline for payment of VAT of August 2022 is December 20, 2022.

- The deadline for payment of VAT of Q1 2022 is October 30, 2022.

- The deadline for payment of VAT of Q2 2022 is December 31, 2022.

Thus, according to the above regulations in Vietnam, the value-added tax extension period in 2022 is extended depending on the case of monthly or quarterly tax declaration. In your case, the extension period is 04 months for the value-added tax amount of July 2022 and the time to pay value-added tax for the July 2022 tax period is December 20, 2022 at the latest.

What are procedures for extending VAT payment in 2022 in Vietnam?

In Article 5 of Decree 34/2022/ND-CP (expires from January 1, 2023), deferral procedures are as follows:

1. The taxpayer that directly declares and pays tax to the tax authority and is eligible for deferral shall send the application for deferral of tax and land rents (electronically, in person or by post) using the form provided in the Appendix hereof to the supervisory tax authority (hereinafter referred to as "deferral application"). An application may be used for the entire amount of tax, land rent incurred in the tax periods eligible for deferral. The application shall be sent at the same time as the monthly or quarterly tax declaration dossier. In case the deferral application is not submitted together with the monthly or quarterly tax declaration dossier, it must be submitted not later than September 30, 2022 and the tax authority still grants deferral to tax, land rents incurred in the periods eligible for deferral before the application is submitted.

In case the taxpayer has deferred amounts in multiple areas under the management of different tax authorities, the taxpayer's supervisory tax authority shall send information about the deferral application to relevant tax authorities.

2. Taxpayers shall determine and take responsibility for their eligibility for deferral in accordance with this Decree. Deferral applications sent to the tax authority after September 30, 2022 will not be granted.

3. The tax authority shall notify the taxpayer of whether the deferral application is granted. In case during the deferral period the tax authority is able to prove that the taxpayer is not eligible for deferral, the tax authority shall send a written notification to the taxpayer of the ineligibility for deferral and the taxpayer shall fully pay the tax, land rents and late payment interest that accrue over the elapsed period. In case a competent authority discovers through inspection that the taxpayer is not eligible for deferral after expiration of the deferral period, the taxpayer shall pay the arrears, fines and late payment interest to state budget.

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 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.

5. When following procedures for payment with State Treasury, investors in capital construction works, work items funded by state budget, payments from state budget for capital construction works of projects funded by ODA that are subject to VAT shall provide the notification that the tax authority has received the deferral application or the deferral application bearing the tax authority's confirmation of receipt of the contractors. The documents sent by the investors shall be the basis for State Treasury to defer VAT deduction during the deferral period. Upon expiration of the deferral period, the contractors shall fully pay the deferred tax as per regulations.

Best regards!