Cases of Tax Debt Cancellation for Exported and Imported Goods

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LEGAL ASSISTANT has the following response to Mr. Nen's question:

According to the provisions in Clause 1, Article 136 of Circular 38/2015/TT-BTC, Article 65 of the Tax Management Law 2006, and Clause 20, Article 1 of the Revised Tax Management Law 2012, the cases eligible for tax debt, late payment interest, and penalty cancellation include:

- Businesses that have been declared bankrupt and have made payments according to bankruptcy laws, yet have no remaining assets to pay tax debt, late payment interest, and penalties;- Individuals considered deceased, missing, or incapacitated by law, with no assets to pay tax debt, late payment interest, and penalties;- Tax debts, late payment interest, and penalties of taxpayers which do not fall under the above cases but where the tax authority has applied all enforcement measures for the administrative tax decision, and these debts have exceeded ten years from the tax payment deadline but are uncollectible.

However, this regulation is only effective until June 30, 2019. From July 1, 2020, when the Tax Management Law 2019 officially takes effect, taxpayers will be eligible for tax debt, late payment interest, and penalty cancellation in the following cases:

1. Businesses or cooperatives declared bankrupt and having made payments according to bankruptcy laws but have no remaining assets to pay tax debt, late payment interest, and penalties.
2. Individuals who have died or been declared dead, incapacitated by a court, with no assets, including inherited assets, to pay tax debt, late payment interest, and penalties.
3. Tax debts, late payment interest, and penalties of taxpayers, which do not fall under the above cases, but where the tax authority has applied enforcement measures, and these debts have exceeded 10 years from the tax payment deadline but are uncollectible.

Taxpayers who are individuals, individual business owners, household owners, private business owners, and one-member limited liability company owners whose tax debt, late payment interest, and penalties have been cancelled as prescribed in this clause must repay the debt to the State before resuming production, business, or establishing a new production or business entity.

The Government of Vietnam mandates the coordination between tax authorities and business registration agencies, local authorities to ensure that canceled tax debts, late payment interests, and penalties are repaid to the state budget before issuing business registration certificates or enterprise registration certificates.

4. Tax debts, late payment interests, and penalties for cases affected by natural disasters, calamities, widespread epidemics, and disease outbreaks considered for exemption from late payment interest as prescribed in Clause 8, Article 59 of the Tax Management Law 2019 and granted tax deferment as prescribed in Point a, Clause 1, Article 62 of this Law but continue to incur damage, making recovery of production, business impossible, and incapable of paying tax debts, late payment interests, and penalties.

Thus, it can be seen that the Tax Management Law 2019 has added an additional case for tax debt, late payment interest, and penalty cancellation compared to the current regulations under the Tax Management Law 2006.

Nguyen Trinh

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