Procedures for offsetting overpaid tax, late payment interest and fines in Vietnam

Procedures for offsetting overpaid tax, late payment interest and fines in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Case of handling overpaid tax, late payment interest and fines in Vietnam

According to Clause 1, Article 25 of Circular 80/2021/TT-BTC, overpaid tax, late payment interest or fine (hereinafter referred to as "overpaid amount") specified in Clause 1 Article 60 of the Law on Tax Administration shall be handled as follows:

(1) Offsetting against the outstanding tax, late payment interest, fines (hereinafter referred to as "debts") or offset against tax, late payment interest, fines payable next time (hereinafter referred to as "new amounts payable") in the following cases:

(1.1) Offset against the taxpayer's debts that belong to the same category and area as those of the overpaid amount.

(1.2) Offset against the taxpayer's new amount payables that belong to the same category and area as those of the overpaid amount.

(1.3) The income payer that has the overpaid PIT shall offset it in accordance with (1.1) và (1.2) of this Item.

Overpaid PIT equals (+) overpaid PIT of the authorizing individual minus (-) PIT payable of the authorizing individual; the income payer shall return the overpaid PIT to the authorizing individual when it finalizes PIT.

(1.4) Offset against another taxpayer's debts or new amount payables that belong to the same category and area as those of the overpaid amount if the current taxpayer has no more debt.

(1.5) In case the taxpayer's overpaid amount is in a foreign currency as prescribed in Article 4 of Circular 80/2021/TT-BTC, it shall be converted into VND at the selling rate at the beginning of the day quoted by Vietcombank on the day on which overpaid tax is determined.

(2)  Refund, refund combined with budget offsetting

In case the overpaid amount cannot be completely offset according to Point a of this Clause or the taxpayer does not have any debt, the taxpayer may submit an application for refund or refund combined with state budget offsetting in accordance with Article 42 of Circular 80/2021/TT-BTC.

The overpaid amount will be refunded when the taxpayer has no debt.

(3) Date of determination of overpaid amount for offsetting or refund:

(3.1) If the taxpayer calculate, declare and pay the declared tax themselves, the date of determination of overpaid amount shall be the day on which tax is paid to state budget;

In case the taxpayer pays tax before submitting the tax declaration dossier, it shall be the day on which the tax declaration dossier is submitted. In case of supplementary declaration, it shall be the date the supplementary tax declaration dossier is submitted.

(3.2) If the taxpayer calculate, declare and pay the declared tax themselves, the date of determination of overpaid amount shall be the day on which tax is paid to state budget;

In case the taxpayer pays tax before submitting the tax declaration dossier, it shall be the day on which the tax declaration dossier is submitted. In case of supplementation of the tax declaration dossier, it shall be the date the supplementary documents are submitted.

(3.3) If the taxpayer pays tax according to a decision issued by the tax authority, a decision or document issued by a competent authority, the date of determination of overpaid amount shall be the day on which tax is paid to state budget;

In case the taxpayer pays tax before the decision or document is issued, it shall be the issuance date of the decision or document. In case of multiple decisions or documents, it shall be the issuance date of the last decision or document.

(3.4) In case the taxpayer has paid tax before having to implement a court's judgment or decision, the date of determination of overpaid amount shall be the effective date of the court's judgment or decision.

2. Procedures for offsetting overpaid tax, late payment interest and fines in Vietnam

Procedures for offsetting overpaid tax, late payment interest and fines in Vietnam under Clause 2, Article 25 of Circular 80/2021/TT-BTC are as follows:

- The taxpayer who has an overpaid amount to be offset against debts or new amounts payable according to (1.1), (1.2) and (1.3 of Item 1 is not required to submit the application for offsetting to the tax authority.

The tax authority shall automatically offset the overpaid amount on the tax administration system in the cases specified in (1.1), (1.2) item 1 and provide information for the taxpayer in accordance with Article 69 of Circular 80/2021/TT-BTC.

-  The taxpayer who has an overpaid amount to be offset against debts or new amounts payable according to (1.4) item 1 shall submit an application which shall contain:

The application form No. 01/DNXLNT in Appendix I of Circular 80/2021/TT-BTC and relevant documents to the tax authority specified in Clause 3 of Article 25 of Circular 80/2021/TT-BTC.

-  The tax authority shall receive and process the taxpayer's application for offsetting in accordance with Clause 3 of Article 25 of Circular 80/2021/TT-BTC.

Within 05 working days from the receipt of the satisfactory application, the tax authority shall compare the overpaid amount, debts and new amounts payable specified in the taxpayer's application with those on the tax administration system:

+  If the information matches, the tax authority shall offset the overpaid amount against the debts and new amounts payable as requested by the taxpayer and send a notification to the taxpayer according to Form No. 01/TB-XLBT in Appendix I of Circular 80/2021/TT-BTC.

+ If the taxpayer is not eligible for offsetting as prescribed in Clause 1 of this Article, the tax authority shall send a notification to the taxpayer according to Form No. 01/TB-XLBT in Appendix I of Circular 80/2021/TT-BTC and provide explanation.

If information in the taxpayer's application does match that on the tax administration system, the tax authority shall request the taxpayer to provide explanation and supplementary documents according to Form No. 01/TB-BSTT-NNT enclosed with Decree 126/2020/ND-CP and send it to the taxpayer.

The explanation and supplementation time shall be excluded from the application processing time. If the taxpayer's explanation and supplementary documents match information on the tax administration system, carry out the offsetting according to (3.1) of Item 1.

If the taxpayer fails to provide explanation or supplementary documents by the deadline imposed by the tax authority or information in the taxpayer's application does not match information on the tax administration system, the tax authority shall send the taxpayer a notification according to Form No. 01/TB-XLBT in Appendix I of Circular 80/2021/TT-BTC and provide explanation for not offsetting the overpaid amount.

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