General Department of Taxation's guidance on tax deferral for taxpayers affected by No. 3 typhoon and subsequent floods in Vietnam

General Department of Taxation's guidance on tax deferral for taxpayers affected by No. 3 typhoon and subsequent floods in Vietnam

Following the direction of the Prime Minister of the Government of Vietnam in Official Telegram 92/CD-TTg dated September 10, 2024, on addressing the damage caused by No. 3 typhoon and post-storm floods, the General Department of Taxation requests Tax Departments in provinces and cities where organizations, individuals, and enterprises affected by No. 3 typhoon and post-storm floods to implement the following guidance on tax deferral for taxpayers in Vietnam :

Pursuant to Clause 27, Article 3 of the Law on Tax Administration 2019 stipulating cases of force majeure in Vietnam:

- Taxpayers suffering material damage due to natural disasters, catastrophes, epidemics, fires, unexpected accidents;- Other force majeure cases as stipulated by the Government of Vietnam.

Article 62 of the Law on Tax Administration 2019 stipulates tax payment extensions as follows:

- Tax payment extensions are considered upon the request of taxpayers in the following cases:

(i) Suffering material damage that directly affects production and business activities due to encountering force majeure cases as regulated in Clause 27, Article 3 of the Law on Tax Administration 2019;

(ii) Having to cease operations due to the relocation of production and business establishments as required by competent authorities, affecting production and business results.

- Taxpayers eligible for the above-mentioned tax deferrals are granted a tax payment extension for part or the entire tax due.

- The duration of tax payment extension is stipulated as follows:

+ Not exceeding 02 years from the tax payment deadline for cases specified in point (i);

+ Not exceeding 01 year from the tax payment deadline for cases specified in point (ii).

- Taxpayers are not penalized and are not required to pay late payment amounts based on the tax debt during the tax deferral period.

- Heads of directly managing tax authorities shall base on tax deferral dossiers to decide on the amount of tax to be extended and the duration of the tax payment extension.

According to the above regulations, taxpayers suffering material damage due to natural disasters fall into force majeure cases and are eligible for a tax payment extension for part or the entire tax due as regulated.

More details can be found in Official Dispatch 4062/TCT-CS issued on September 13, 2024.

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