How to calculate late tax payment interest in Vietnam?

How to calculate late tax payment interest in Vietnam?

Pursuant to Clause 2 Article 59 of the Law on Tax Administration in 2019 stipulating handling of late tax payment 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.

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Therefore, the late payment interest rate for tax is 0.03%/day on the late tax amount.

Note: The period for calculating late payment interest is calculated continuously from the day following the day on which late payment interest is incurred to the day immediately preceding the day on which the amount of tax debt, the amount of tax refund recovery, the amount of additional tax, the amount of tax imposed, and the amount of late transfer tax has been paid to the state budget.

How to calculate late tax payment interest in Vietnam? - Source: Internet

07 cases in which late tax payment interest shall be charged in Vietnam

Pursuant to Clause 1 Article 59 of the Law on Tax Administration in 2019 stipulating 07 cases in which late tax payment interest shall be charged in Vietnam as follows:

(1) 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;

(2) 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;

(3) 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;

(4) The cases in which outstanding debt may be paid by installments as prescribed in Clause 5 Article 124 of the Law on Tax Administration in 2019;

(5) 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 the Law on Tax Administration in 2019;

(6) The cases in which administrative penalties are not imposed specified in Clause 3 and Clause 4 Article 142 of the Law on Tax Administration in 2019;

(7) 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.

In which cases shall late tax payment interest in Vietnam not be charged?

Pursuant to Clause 5 Article 59 of the Law on Tax Administration in 2019 stipulating handling of late tax payment as follows:

Handling of late tax payment

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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.

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As regulations above, 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.

In addition, late payment interest will not be charged during the waiting period for the results of analysis and appraisal; during the period when there is no official price; during the period when the actual payment amount and the adjustment items added to the customs value cannot be determined for the following cases:

- Goods must be analyzed and appraised to determine the exact amount of tax to be paid;

- Goods do not have an official price at the time of customs declaration;

- Goods with actual payment amounts, goods with adjustment items added to the customs value that cannot be determined at the time of customs declaration are carried out according to the regulations of the Minister of Finance.

Best regards!