Calculation method and handling of differences between fines in Vietnam

Calculation method and handling of differences between fines in Vietnam (Internet image) 

1. Calculation method and handling of differences between fines in Vietnam

According to Article 6 of Circular 18/2023/TT-BTC, the calculation method and handling of differences between fines are as follows:

* Method of calculation of a difference between fines

The difference between fines that arises with the coming of a decision on rectification, revision, cancellation or replacement of an existing administrative penalty decision is calculated according to the following formula:

The difference = A - B

Where:

- A denotes the amount of fine that a penalized person or entity has paid into the state budget under an administrative penalty decision issued by a competent authority.

- B denotes the amount of fine for which a penalized person or entity is liable upon receipt of a decision on rectification, revision, cancellation of an existing administrative penalty decision, or a new administrative penalty decision from a competent authority.

* Handling of a difference between fines

Where the amount of fine specified in the decision on rectification, revision or cancellation of an existing administrative penalty decision, or a new administrative penalty decision, is greater than the amount of fine that a violator has paid into the state budget (B>A), the violator is required to pay the outstanding balance according to the procedures for payment into the state budget defined in Article 4 in the Decree 11/2020/ND-CP.

Where the amount of fine specified in the decision on rectification, revision or cancellation of an existing administrative penalty decision, or a new administrative penalty decision, is less than the amount of fine that a violator has paid into the state budget (BCircular 18/2023/TT-BTC.

* Offsetting the aforesaid excess against an amount of tax, late payment interest or fine related to customs that a taxpayer owes shall be subject to Article 132 in the Circular 38/2015/TT-BTC; customs inspection and supervision; export, import duties and administration of taxes on exports and imports that is amended and supplemented by clause 65 of Article 1 in Circular 39/2018/TT-BTC

Offsetting the aforesaid excess against an outstanding amount of tax, late payment interest or fine, or an amount of tax, late payment interest or fine payable in the future related to tax shall be subject to the Circular 80/2021/TT-BTC.

2. Procedures for collection of interest on late payment of fines in Vietnam

Procedures for collection of interest on late payment of fines according to Article 5 of Circular 18/2023/TT-BTC are as follows:

* If a penalized entity or person has not paid the fine within the time limit for execution of an administrative penalty decision specified in clause 2 of Article 68 and clause 1 of Article 73 in the Law on Handling of Administrative Violations 2012, they shall suffer from enforcement of the administrative penalty decision, and shall have the duty to pay a surcharge accounting for 0.05% of the outstanding amount of fine per day late.

The number of days past due for payment of a fine shall include statutory public holidays or days-off, and shall start from the date succeeding the deadline for payment of the fine and end on the day preceding the date of the penalized entity or person’s payment of the fine into the state budget.

* Exemption from late payment interest may be granted:

- within the period of deferment of the administrative penalty decision;

- within the period of consideration and issuance of a decision on reduction or exemption of the remaining amount of fine, or grant of permission to pay the fine in instalments.

* A fines collecting agency defined in clause 1 of Article 3 of Circular 18/2023/TT-BTC shall refer to the administrative penalty decision and the number of days late for payment of a fine to calculate and collect the amount of late payment interest when the penalized entity or person pays the fine.

When paying the fine by the wire transfer method as provided in clause 2 of Article 3 of Circular 18/2023/TT-BTC, the payer of that fine shall consult the administrative penalty decision and the number of days late for payment of that fine to calculate and collect the amount of late payment interest.

* The time of calculation of late payment interest shall be determined as follows:

- For an administrative penalty decision that is sent directly, the late payment interest is calculated after the ten-day duration (including public holidays, statutory days-off) or the time limit for execution specified in that decision that follows the day on which that decision is received in accordance with the Law on Handling of Administrative Violations 2012;

- For an administrative penalty decision that is sent by registered post, the late payment interest is calculated after the ten-day duration (including public holidays, statutory days-off) or the time limit for execution specified in that decision that follows the day on which that decision is delivered validly in accordance with clause 3 of Article 11 in the Law on Post 2010 dated June 17, 2010;

- Where a penalized entity or person neither has a confirmation of the date of receipt of the administrative penalty decision, nor provides an evidence of the date of the valid delivery of the administrative penalty decision as respectively defined in point a and point b of clause 4 of Article 5 of Circular 18/2023/TT-BTC, except in case of willfully refusing to receive the administrative penalty decision as defined in point d of this clause, the late payment interest is calculated after the twelve-day duration (including public holidays, statutory days-off) with respect to the administrative penalty decision stating that the time limit for execution is 10 days following the date of issuance thereof, or after the third day following the time limit for execution specified in the administrative penalty decision with respect to the administrative penalty decision stating that the time limit for execution exceeds 10 days from the date of issuance thereof (including public holidays, statutory days-off).

Where the payer of the fine provides an evidence of the date of receipt of the administrative penalty decision which is justifiable, the fines collecting agency specified in clause 1 of Article 3 Circular 18/2023/TT-BTC may calculate the late payment interest after the ten-day duration or the time limit for execution specified in the administrative penalty decision that follows the day on which the foregoing is received;

- In case of willful refusal to receive the administrative penalty decision, Article 70 in the Law on Handling of Administrative Violations 2012 shall govern. The employer of the person having jurisdiction to issue the administrative penalty decision, or the competent enforcement agency notifies the fines collecting State Treasury of the date considered as the date of successful delivery of the administrative penalty decision in order for that State Treasury to calculate the late payment interest.

- If a penalized person or entity commits a willful act of defaulting on the late payment, the competent fines collecting agency defined in clause 1 of Article 3 Circular 18/2023/TT-BTC is entitled to collect the fine according to the administrative penalty decision; concurrently, calculate and clearly enter the amount of late payment interest that accrues prior to the day on which the penalized entity or person pays the fine in the receipt.

* The competent fines collecting agency specified in clause 1 of Article 3 Circular 18/2023/TT-BTC may use the receipt with unprinted face value, the receipt for the fine that is issued and printed by the state budget collection Application, or any other receipt prescribed by laws for use in collection of amounts of interest on late payment of fines.

* Late payment interest shall be paid into the state budget in accordance with clause 5 of Article 4 Circular 18/2023/TT-BTC.

* Amounts of late payment interest shall be accounted for according to the state budget index.

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