Tax liability imposition authority, procedures and decision in Vietnam

Tax liability imposition authority, procedures and decision in Vietnam (Internet image)

1. Cases of tax liability imposition in Vietnam

According to Article 14 of Decree 126/2020/ND-CP, the tax liability will be imposed by the tax authority if the taxpayer:

- Fails to apply for taxpayer registration in accordance with Article 33 of the Law on Tax administration.

- Fails to declare or truthfully and accurately declare tax in accordance with Article 42 of the Law on Tax administration.

- Fails to submit supplementary tax documents or adequate and accurate supplementary tax documents as the basis for determination of tax payable as requested by the tax authority.

- Fails to provide or truthfully and accurately provide information in accounting books as the basis for determination of tax obligations.

- Fails to present accounting books, invoices and documents necessary as the basis for tax calculation by the deadline or within the time limit for tax audit or tax inspection at the taxpayer’s premises.

- Fails to implement the decision on tax audit within 10 working days from the day on which the decision is signed, unless the inspection date is delayed as per regulations.

- Fails to implement the decision on tax inspection within 15 working days from the day on which the decision is signed, unless the inspection date is delayed as per regulations.

- Sells, buys, exchanges goods with unusual values; records unusual value of goods.

- Buys, exchanges goods, services using illegal invoices; illegally uses invoices for actual goods and services as discovered by an investigating or inspecting authority while revenues and expenses as the basis for tax calculation have been declared.

- Is suspected absconding or liquidating assets to avoid tax obligations.

- Conducts misleading or false transactions to reduce tax obligations.

- Fails to declare values of related-party transactions (if any) or fails to provide information about related-party transactions (if any) in accordance with tax administration regulations.

2. Tax liability imposition authority, procedures and decision in Vietnam

Article 16 of Decree 126/2020/ND-CP stipulates the tax liability imposition authority, procedures and decision as follows:

- Authority for tax liability imposition

the Director of the General Department of Taxation, Directors of Provincial Departments of Taxation and Directors of District-level Departments of Taxation have the authority to impose tax liability.

- Procedures for tax liability imposition

= When imposing tax liability, the tax authority shall send a written notice to the taxpayer and issue the tax liability imposition decision, which must specify the reasons and basis for imposition, the tax amount payable and payment deadline.

= In case the tax authority imposes tax liability through tax audit or tax inspection, the reasons and basis for imposition, the tax amount payable and payment deadline shall  be written in the tax audit or tax inspection record and tax decision issued by the tax authority.

= In case tax liability is imposed due to the taxpayer’s violation, the tax authority shall impose administrative penalties and calculate late payment interest as prescribed by law.

- Decision on tax liability imposition

= When imposing tax liability, the tax authority shall issue a decision (Form No. 01/ADT in Appendix III of Decree 126/2020/ND-CP) and send it to the taxpayer within 03 working days from the day on which it is signed;

If the taxpayer has to pay tax under the tax authority’s notice, such a decision is not necessary.

= The taxpayer shall pay tax as imposed by the tax authority.

If the taxpayer does not concur with the tax liability imposed by the tax authority, the taxpayer still has to pay the tax and may request the tax authority to provide explanation or file a complaint or lawsuit against the tax authority’s decision.

Quoc Dat

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