Vietnam: 04 cases of late tax payment interest exempted

Taxpayers who are late in paying tax on time due to objective reasons have to pay an additional late payment interest of 0.03%/day of that late payment tax amount. However, if falling into the following cases, taxpayers are exempt from this late payment interest and will not be penalized for administrative violations:

- The taxpayer suffers from a natural disaster, conflagration, accident, or epidemic;

- The taxpayer suffers from a fatal disease;

- The taxpayer suffers from another force majeure event;

- Taxpayers providing goods and services are paid with state budget funds but have not yet been paid, so they do not promptly pay taxes resulting in tax debt, the late payment interest is not required, calculated on the outstanding tax amount but not exceeding the unpaid state budget amount arising during the unpaid state budget period.

Circular No. 26/2015/TT-BTC of the Ministry of Finance of Vietnam guides the determination of late payment interest exempted as follows:

- Where the taxpayer suffers from a natural disaster, conflagration, accident, or epidemic, the late payment interest on tax debt at the time of such event shall be exempt. Nevertheless, the amount of exempted interest must not exceed the value of property or assets being damaged.

- Where the taxpayer suffers from a fatal disease, the late payment interest on tax debt at the time of catching the disease shall be exempt. Nevertheless, the amount of exempted interest must not exceed the medical examination and treatment cost.

- Where the taxpayer suffers from another force majeure event, the late payment interest on tax debt at the time of such event shall be exempt. Nevertheless, the amount of exempted interest must not exceed the value of property or assets being damaged.

Taxpayers must have the following documents as a basis for the application for exemption from late payment of tax:

* The following documents must be provided if the damage is caused by a natural disaster, conflagration, accident, or epidemic:

- A damage assessment report issued by a competent authority such as Valuation Council established by the Service of Finance or a valuation organization that provide valuation services under contracts, or Valuation Center of the Service of Finance;

- A written certification that the taxpayer suffers from damage caused by a natural disaster, conflagration, accident, or epidemic and the occurrence time made by the police station of the commune, the People’s Committee of the commune, the management board of the industrial zone, export-processing zone, or economic zone where the natural disaster, accident, or epidemic occurs, or a rescue service agency;

- A claim for compensation approved by the insurer (if any);

- The documents specifying the responsibilities of the entities responsible for paying compensation (if any).

* If the individual suffers from a fatal disease:

- A certification of medical treatment issued by a legitimate medical facility, which contains the certification time;

- Documents proving the cost of medical examination and treatment;

- Receipts for payment for the cost of medical examination and treatment by the insurer (if any).

Within 60 days from the occurrence date of the natural disaster, conflagration, accident, epidemic, fatal disease, or another force majeure event, the taxpayer shall make and submit an application for exemption of late payment interest to the supervisory tax authority.

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