Latest regulations on tax deferral in Vietnam

Latest regulations on tax deferral in Vietnam (Internet image)

1. Latest regulations on tax deferral in Vietnam

Article 62 of the Law on Tax Administration 2019 stipulates tax deferral in Vietnam as follows:

- A taxpayer may apply for tax deferral in one of the following cases:

+ The taxpayer’s business suffers damage due to a force majeure events specified in Clause 27 Article 3 of the Law on Tax Administration 2019;

+ The taxpayer has to relocate the business location as requested by a competent authority and such relocation affects the business performance.

- A taxpayer eligible for tax deferral mentioned in Clause 1 of Article 62 of the Law on Tax Administration 2019 may have part or all of the tax deferred.

- Tax may be deferred:

+ For up to 02 years in the cases specified in Point a Clause 1 of Article 62 of the Law on Tax Administration 2019;

+ For up to 01 year in the cases specified in Point b Clause 1 of Article 62 of the Law on Tax Administration 2019.

- The taxpayer will not incur fines and late payment interest on the outstanding tax during the deferral period.

- In consideration of the application for tax deferral, the head of the tax authority shall decide the amount of tax deferred and the deferral period.

2. Regulations on special cases of tax deferral in Vietnam

According to Article 19 of Decree 126/2020/ND-CP, at certain times when certain groups of taxpayers, industries or businesses are facing difficulties, the Ministry of Finance shall take charge and cooperate with relevant ministries and central authorities in proposing groups of taxpayers, taxes and other amounts eligible for deferral to the Government. Tax deferral shall not affect state budget revenue estimate approved by the National Assembly.

3. Application for tax deferral in Vietnam

According to Article 11 of Circular 06/2021/TT-BTC, the tax payment extension dossier is prescribed in Clause 2, Article 64 of the Law on Tax Administration 2019, including:

- Official Dispatch requesting tax deferral according to Form 02/TXNK Appendix I issued with Circular 06/2021/TT-BTC: 01 original copy;

Form No. 02

- Documents attached to the letter requesting tax deferral in cases specified in point a clause 1 Article 62 of the Law on Tax Administration 2019:

+ Document, minutes confirming the cause of damage from the competent authority in the locality where the damage occurred:

++ Confirmation document from one of the following agencies or organizations: Commune, ward, town police; Commune, ward, town People's Committee; Industrial Park Management Board, Export Processing Zone Management Board, Economic Zone Management Board, Border Gate Management Board, Civil Aviation Authority, Maritime Port Authority where the event of force majeure regarding natural disasters, epidemics, sudden accidents causing direct impact on production, business occurred: 01 original copy;

++ Fire incident confirmation minutes from the local fire fighting and prevention police agency where the fire occurred: 01 original copy.

+ In case of force majeure difficulties due to war, unrest, strikes resulting in the suspension or cessation of production, business, or risks not attributable to subjective reasons of the taxpayer as specified in clause 1 Article 3 of Decree 126/2020/ND-CP, the taxpayer submits documents and evidence proving the force majeure difficulties leading to the inability to pay taxes, late payment, or timely fines: 01 certified copy with the seal of the requesting tax authority;

+ Insurance contract, compensation payment notice from the insurance recipient organization (if any), in case the insurance contract does not include compensation for taxes, there must be confirmation from the insurance organization; contract or agreement for compensation from the transportation company for losses caused by the transportation company (if any); 01 certified copy with the seal of the requesting tax authority.

- Documents attached to the Official Dispatch requesting tax deferral in cases specified in point b clause 1 Article 62 of the Law on Tax Administration 2019:

+ Decision on revoking the production, business location by the competent state agency for the former production location of the enterprise (except for cases of relocation of production locations according to the enterprise's requirements): 01 certified copy with the seal of the requesting tax authority;

+ Confirmation document from the local authorities regarding the need for the enterprise to suspend production, business due to relocation: 01 original copy;

+ Documents proving the direct extent of damage caused by the need to relocate the business location. The value of the damage is determined based on the remaining value of the damaged goods. The remaining value of the damaged goods is determined based on the records, documents, and relevant laws directly related to determine: Demolished workshop, warehouse, machinery, equipment that cannot be recovered (net book value after depreciation expenses), dismantling costs for equipment, old premises, transportation and installation costs at the new premises (after deducting recovery costs), wage costs for workers due to work stoppage (if any). In complex cases related to technical and economic fields, a confirmation document from the specialized agency is required: 01 original copy.

To Quoc Trinh

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE