Conditions for cancellation of uncollectible tax debts incurred before July 1, 2007 in Vietnam

Regarding this matter, LawNet responds as follows:

1. Entities eligible for cancellation of uncollectible tax debts incurred before July 1, 2007 in Vietnam

According to Article 2 of Circular 179/2013/TT-BTC, the entities eligible for cancellation of uncollectible tax debts incurred before July 1, 2007 in Vietnam include:

- Households and individuals who still owe taxes and fines incurred before July 1, 2007.

- State enterprises that have been dissolved by competent authorities and still owe taxes and fines incurred before July 1, 2007 (including taxes and fines owed by dependent branches, dependent stores, and dependent mobile units of the enterprise).

- State enterprises that have completed equitization according to Decree 44/1998/ND-CP, Decree 64/2002/ND-CP, Decree 187/2004/ND-CP.

- State enterprises that have been handed over or sold according to Decree 103/1999/ND-CP and Decree 80/2005/ND-CP.

- State enterprises as defined in Clause 22, Article 4 of the Enterprise Law 2005.

2. Conditions for cancellation of uncollectible tax debts incurred before July 1, 2007 in Vietnam

Specifically, Article 3 of Circular 179/2013/TT-BTC stipulates the conditions for cancellation of uncollectible tax debts incurred before July 1, 2007 in Vietnam as follows:

- For households and individuals mentioned in Clause 1, Article 2 of Circular 179/2013/TT-BTC, the conditions are that they face difficulties, are unable to pay the tax debt, and have shut down their operations.

- For state enterprises dissolved as mentioned in Clause 2, Article 2 of Circular 179/2013/TT-BTC, the conditions are as follows:

+ The state enterprise operates independently.

+ The decision to dissolve has been made by a competent authority.

- For equitized enterprises mentioned in Clause 3, Article 2 of Circular 179/2013/TT-BTC, the conditions are that they have been equitized according to Decree 44/1998/ND-CP, Decree 64/2002/ND-CP, Decree 187/2004/ND-CP.

+ They have been granted a business registration certificate to establish a joint-stock company.

+ The tax debt and fines proposed for write-off have not been deducted from the state capital in the enterprise when determining the enterprise value for equitization or when the enterprise officially transforms into a joint-stock company.

- For state enterprises that have undergone ownership transformation via handing over or selling as mentioned in Clause 4, Article 2 of Circular 179/2013/TT-BTC, the conditions are as follows:

+ They have been handed over or sold according to Decree 103/1999/ND-CP and Decree 80/2005/ND-CP.

+ They have been granted a business registration certificate to establish an enterprise.

- The tax debt and fines proposed for write-off are not included in the enterprise value for handing over or selling.

3. Power to issue a decision on cancellation of uncollectible tax debts incurred before July 1, 2007 in Vietnam

- The Prime Minister of the Government of Vietnam shall issue a decision on the cancellation of tax debts for taxpayers who owe taxes, late payment interests, and fines of 10 billion VND or more.

- The Minister of Finance shall issue a decision on the cancellation of tax debts for taxpayers who owe taxes, late payment interests, and fines from 5 billion VND to less than 10 billion VND.

- The Director General of the General Department of Taxation in Vietnam and the Director General of the General Department of Vietnam Customs shall issue a decision on the cancellation of tax debts for taxpayers who owe taxes, late payment interests, and fines of less than 5 billion VND.

+ The Director General of the General Department of Taxation in Vietnam shall issue a decision on the cancellation of tax debts for files requesting the write-off of taxes, late payment interests, and fines from domestic production and operations; or applications for cancellation of tax, late payment interest, and fine debts from domestic operations and those of exported and imported goods.

+ The Director General of the General Department of Vietnam Customs shall issue a decision on the cancellation of tax debts for applications for cancellation of tax, late payment interest, and fine debts solely for exported and imported goods.

- The power to issue a decision on the cancellation of tax, late payment interest, and fine debts is based on the total amount of taxes, late payment interests, and fines in the document requesting the tax debt cancellation.

(Article 4 of Circular 179/2013/TT-BTC)

Thanh Rin

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