How is the procedure for cancellation of outstanding tax, late payment interest, fines for exports and imports? Thanks. Ms. Nguyen Thi Hoa in Hai Phong sent a question to LAWNET for support on April 01, 2020.
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LAWNET would like to answer Ms. Hoa’s question as follows:
According to Clause 4 Article 136 of Circular No. 38/2015/TT-BTC of the Ministry of Finance of Vietnam, cancellation of outstanding tax, late payment interest, fines are carried out as follows:
- The Director of the Customs Department shall verify the documents and requests for debt cancellation, and send them to a competent authority as prescribed;
- The Director of the General Department of Customs shall consider debt cancellation in the cases within his/her competence or receive, verify the documents and requests for debt cancellation, and send them to the Ministry of Finance in the cases within the competence of the Ministry of Finance, or request the Ministry of Finance to send them to the Prime Minister in the cases within the competence of the Prime Minister;
- Presidents of the People’s Committee of the same province with the Customs Department to which the enterprise owes tax debt shall consider debt cancellation in the case within his/her competence.
Within sixty days after receiving complete tax arrear or fine remission dossiers, competent persons shall issue decisions on debt remission or notify that the cases are ineligible for tax arrear or fine remission.
According to Clause 1 Article 136 of Circular No. 38/2015/TT-BTC, Article 65 of the Law on Tax Administration 2006 and Clause 20 Article 1 of the Law on Tax Administration amended in 2012 of Vietnam, entities eligible for cancellation of outstanding tax, late payment interest, and fines include:
- Enterprises that have been declared bankrupt and made payments according to the bankruptcy law and therefore have no assets to pay taxes or fines.
- Individuals who are deemed by law as dead, missing or having lost their civil act capacity and have no asset to pay tax arrears or fines.
- The tax debts, late payment interest, and fines of the taxpayer not falling in the above-mentioned cases that the tax authority have taken all measures for enforcing the implementation of the administrative decisions on tax and such tax debts, late payment interest, and fines have exceeded 10 years as from the deadline for paying tax, but are not able to be collected.
However, this provision is only valid until June 30, 2019. From July 01, 2020, when the Law on Tax Administration 2019 of Vietnam officially comes into force, cases of cancellation of outstanding tax, late payment interest and fines include:
1. An enterprise or cooperative is declared bankrupt and, after making the payments in accordance with bankruptcy laws, has no other assets to pay tax, late payment interest or fines.
2. An individual is dead or declared dead or incapacitated by the court and does not have any assets, including inheritance, to pay the outstanding tax, late payment interest or fines.
3. The tax debts, late payment interest, and fines of the taxpayer not falling in the above-mentioned cases that the tax authority have taken all measures for enforcing the implementation of the administrative decisions on tax and such tax debts, late payment interest, and fines have exceeded 10 years as from the deadline for paying tax, but are not able to be collected.
An taxpayer that is an individual, individual businesses, householder, household business owner, sole proprietor or owner of a single-member limited liability company has had the outstanding tax, late payment interest and fines canceled before resuming the business operation or establishing a new business shall pay such debts must be paid to the State.
The Government shall provide for cooperation between tax authorities, business registration authorities and local authorities in making sure canceled tax, late payment interest and fines are paid to state budget in accordance with Clause 3 of this Article before the certificate of business registration or certificate of enterprise registration is issued.
4. In the force majeure events in which late payment interest is exempted according to Clause 8 Article 59 of this Law, the taxpayer’s business is still irrecoverable and thus tax, late payment interest and fines cannot be paid even after tax deferral is granted according to Point a Clause 1 Article 62 of this Law.
View details of entitlement to debt cancellation for exports and imports HERE.
Nguyen Trinh
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