04 Cases eligible for extension of tax debt payment deadlines in Vietnam

04 Cases eligible for extension of tax debt payment deadlines in Vietnam (Internet image)

Circular 77/2008/TT-BTC stipulates that the extension of tax debt payment deadlines in Vietnam may be granted to operating enterprises that owe tax debts due to financial difficulties and business losses for three consecutive years (2005-2007), including:

- Enterprises that were unable to fully pay arising tax amounts on time because they had to relocate their business places out of inner cities under the planning of the Government or provincial-level People's Committee and faced losses in production and business activities during the time of relocation to new business places.

- Enterprises that were unable to fully pay arising tax amounts on time because of business risks and financial difficulties, such as their business partners went bankrupt, debts could not be collected, the market was lost due to policy change in importing countries, losses were incurred due to natural disasters, accidents or other force majeure reasons.

- Enterprises that directly signed contracts with project owners or enterprises to implement projects or works funded with state budget or the Government's ODA funds but have not yet received payments or allocations from the state budget, so had no sources for paying debts, resulting in tax debts.

- Enterprises that implemented infrastructure or housing or land business investment projects but have not yet been allocated or leased land by the State, or land use rights auctions have not yet been held by the State, and therefore could not clear up grounds or receive land, resulting in no sources for making payments to the state budget. Their tax debts shall be handled as follows:

• For projects which could not be started on schedule under Clause 1, Article 37 of the Government's Decree No. 84/2007/ND-CP of May 25, 2007, because grounds could not be cleared or land had been handed over (including partial hand-over according to the land allocation schedule) but projects were not executed and competent agencies have issued decisions to recover their land, provincial-level Tax Departments shall re-determine amounts payable to the state budget suitable to the actually allocated or leased land areas. Project-implementing enterprises shall immediately pay arising tax amounts according to the notices of tax agencies.

• For projects which were implemented behind schedule and the land use deadline has been extended by management agencies competent to allocate or lease land under Clause 2. Article 37 of Decree No. 84/2007/ND-CP of May 25,2007, and have tax debts and state budget remittances that are related to land and the transfer of land use rights, houses or infrastructure on land, they shall be considered and permitted to extend the deadline for paying tax debts corresponding to their land areas for which the land use deadline has been extended.

More details can be found in Circular 77/2008/TT-BTC, which comes into force from October 17, 2008.

Ngoc Tai

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