Is it possible to apply for tax deferral when requesting late payment of tax due to warehouse fire in Vietnam?

Is it possible to apply for tax deferral when requesting late payment of tax due to warehouse fire in Vietnam?

Pursuant to Article 62 of the Law on Tax Administration 2019 stipulates the tax deferral as follows:

1. A taxpayer may apply for tax deferral in one of the following cases:

a) The taxpayer’s business suffers damage due to a force majeure events specified in Clause 27 Article 3 of this Law;

b) The taxpayer has to relocate the business location as requested by a competent authority and such relocation affects the business performance.

2. A taxpayer eligible for tax deferral mentioned in Clause 1 of this Article may have part or all of the tax deferred.

3. Tax may be deferred:

a) For up to 02 years in the cases specified in Point a Clause 1 of this Article;

b) For up to 01 year in the cases specified in Point b Clause 1 of this Article.

4. The taxpayer will not incur fines and late payment interest on the outstanding tax during the deferral period.

5. In consideration of the application for tax deferral, the head of the tax authority shall decide the amount of tax deferred and the deferral period.

According to Clause 27, Article 3 of the Law on Tax Administration 2019, force majeure cases include:

27. “Force majeure events” include:

a) Taxpayers suffering from physical damage caused by natural disasters, catastrophes, epidemics, fire, sudden accidents;

b) Other force majeure situations as prescribed by the Government.

Thus, compared with the above provisions in Vietnam, if your company has an application for tax deferral with the reason that the warehouse is on fire in the event of force majeure, tax deferral will be extended. The time limit for tax deferral is not more than 02 years.

What is included in the application for tax deferral in Vietnam? 

Pursuant to Article 64 of the 2019 Tax Administration Law, application for tax deferral is as follows:

1. A taxpayer eligible for tax deferral as prescribed in this Law shall prepare and send an application for tax deferral to the supervisory tax authority.

2. An application for tax deferral consists of:

a) An application form specifying the reasons for deferral, the amount of tax and the deferral period;

b) Documents supporting the reasons for deferral.

3. The Minister of Finance shall specify the composition of the application for tax deferral.

Pursuant to Article 11 of Circular 06/2021/TT-BTC providing guidance on Clause 3, Article 64 of the Law on Tax Administration, on application for tax deferral as follows:

A dossier of tax payment extension shall comply with the provisions of Clause 2, Article 64 of the Law on Tax Administration, including:

1. Official letter requesting tax deferral, made according to Form No. 02/TXNK, Appendix I issued together with this Circular: 01 original;

2. Documents enclosed with the official letter requesting the tax deferral in the case specified at Point a, Clause 1, Article 62 of the Law on Tax Administration:

a) Written certification of damage caused by the competent authority in the locality where the damage occurs:

a.1) A written certification of one of the following agencies or organizations: Police offices of communes, wards and townships; People's Committees of communes, wards and townships; Management Boards of Industrial Parks, Export Processing Zones, Economic Zones, Border Gate Management Boards, Airport Authorities, and Maritime Port Authorities where force majeure events occur, such as natural disasters, catastrophes, epidemics, or natural disasters, unexpected accident causing material damage, directly affecting production and business: 01 original;

a.2) Minutes of certification of the fire of the local fire prevention and fighting police agency where the fire occurred: 01 original.

b) In case of facing force majeure difficulties due to war, riots, strikes, production and business must be stopped or stopped or risks are not subject to the causes and subjective responsibilities of taxpayers specified in Clause 1 of this Article 3 Decree 126/2020/ND-CP, taxpayers submit documents proving the cause of force majeure difficulties leading to inability to pay tax, late payment interest, and fines on time: 01 copy with the certification stamp of the agency requesting tax payment extension;

c) Insurance contract, notice of payment of compensation from the insurance receiving organization (if any), in case the insurance contract does not include tax compensation, the certification of the insurance organization is required; contract or written agreement on compensation of the carrier in case of loss caused by the carrier (if any); 01 photocopy with the certification stamp of the agency requesting the tax payment extension.

3. Documents enclosed with the official letter requesting tax payment extension for the case specified at Point b, Clause 1, Article 62 of the Law on Tax Administration:

a) The decision of a competent state agency to withdraw the production and business location of the old production location of the enterprise (except for the case of relocation of the production and business location for the purposes requested by the enterprise): 01 photocopy bearing the certification of the agency requesting the tax deferral;

b) A written certification of the local government that the enterprise has to stop production and business due to relocation: 01 original;

c) Documents proving the extent of direct damage caused by having to move the business location. The value of damage is determined on the residual value of the damaged goods. The residual value of damaged goods is determined based on dossiers and documents and directly related provisions of law to determine: The factory, warehouse, machinery and equipment are destroyed (original cost after deducting amortized costs), costs of dismantling equipment and workshops at the old establishment, transportation and installation costs at the new facility (after deducting expenses for recovery fees), costs of paying wages to employees due to stoppage of work (if any). Complicated cases related to economic and technical majors must be certified in writing by specialized agencies: 01 original.

And based on Clause 2, Article 24 of Circular 80/2021/TT-BTC stipulating the application for tax deferral as follows:

2. Composition of an application for tax deferral

a) In case of a natural disaster, epidemic, conflagration or accident specified in Point a Clause 27 Article 3 of the Law on Tax Administration, the application shall contain:

a.1) The application form No. 01/GHAN in Appendix I hereof;

a.2) Documents issued by competent authorities confirming the time, location of the natural disaster, epidemic, conflagration or accident (original copies or copies certified by the taxpayer);

a.3) Documents about physical damage determined by the taxpayer or the taxpayer's legal representative, who is responsible for the accuracy of the physical damage determined;

a.4) Documents (original copies or copies certified by the taxpayer) attributing responsibility of specific organizations and individuals for paying compensation (if any);

a.5) Documents (original copies or copies certified by the taxpayer) relevant to payment of compensation (if any).

b) In other force majeure events specified in Clause 1 Article 3 of Decree No. 126/2020/ND-CP, the application shall contain:

a.1) The application form No. 01/GHAN in Appendix I hereof;

a.2) Documents about physical damage determined by the taxpayer or the taxpayer's legal representative, who is responsible for the accuracy of the physical damage determined;

b.3) Documents confirming the time and location of the force majeure event issued by competent authorities; documents proving that business suspension or shutdown is caused by the war, riot, strike (original copies or copies certified by the taxpayer);

b.4) Documents proving that the risk is not subjectively caused by the taxpayer and that the taxpayer is not financially capable of making payment to state budget if that is the case (original copies or certified true copies).

b.5) Documents (original copies or copies certified by the taxpayer) relevant to insurance payout provided by the insurer (if any).

c) In case of relocation of the business establishment specified in Point b Clause 1 Article 62 of the Law on Tax Administration, the application shall contain:

a.1) The application form No. 01/GHAN in Appendix I hereof;

c.2) The decision on relocation of the business establishment issued by a competent authority (original copy or copy certified by the taxpayer);

c.3) The relocation scheme or plan which specifies the taxpayer's plan and schedule for relocation (original copy or copy certified by the taxpayer);

Best Regards!