Regulations on handling of late tax payment in Vietnam

Regulations on handling of late tax payment in Vietnam (Internet image)

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

1. Regulations on handling of late tax payment in Vietnam

Regulations on handling of late tax payment in Vietnam under Article 59 of the Law on Tax Administration 2019 are as follows:

(1) Late payment interest shall be charged in the following cases:

- The taxpayer pays tax behind deadline, the extended deadline, the deadline written in the tax authority’s notice, tax liability imposition decision or handling decision;

- If the supplementation of the tax declaration dossier leads to an increase in the amount of tax payable, or the tax authority or inspecting authority finds that tax is understated, late payment interest shall be charged on the increase in tax over the period from the day succeeding the initial deadline or the deadline for tax payment of the initial customs declaration;

- If the supplementation of the tax declaration dossier leads to a decrease in the amount of refundable tax, or the tax authority or inspecting authority finds that refundable tax is smaller than the refunded tax, late payment interest shall be charged on the excessively refunded tax, which has to be paid back to state budget, over the period from the day on which tax is refunded;

- The cases in which outstanding debt may be paid by installments as prescribed in Clause 5 Article 124 of the Law on Tax Administration 2019;

- The cases in which administrative penalties are not imposed due to expiration of the time limit for penalty imposition but outstanding tax has to be collected as prescribed in Clause 3 Article 137 of the Law on Tax Administration 2019;

- The cases in which administrative penalties are not imposed specified in Clause 3 and Clause 4 Article 142 of the Law on Tax Administration 2019;

- The organization that is authorized by the tax authority to collect tax but fails to transfer the tax, late payment interest and fines paid by taxpayers to state budget in a timely manner shall pay an interest on such amount.

(2) Calculation of late payment interest:

- The rate of late payment interest is 0,03% per day on the overdue amount;

- The period over which late payment interest is charged is a continuous period from the day succeeding the day on which late payment interest is charged as specified in Clause 1 of Article 59 of the Law on Tax Administration 2019 to the day preceding the date of payment of the outstanding tax, refunded tax, increase in tax, imposed tax.

(3) Taxpayers shall calculate the late payment interest themselves in accordance with Clause 1 and Clause 2 of Article 59 of the Law on Tax Administration 2019 and pay it to state budget as prescribed. Overpaid tax, late payment interest and fines shall be handled in accordance with Clause 1 Article 60 of the Law on Tax Administration 2019.

(4) In case the taxpayer fails to pay tax, late payment interest and fines within 30 days from the deadline for making such payment, the tax authority shall inform the taxpayer of the amount payable and the number of days behind schedule.

(5)  Late payment interest shall not be charged in the following cases:

- The taxpayer provides goods/services which are covered by state budget, including sub-contractors in the contract with the investor, and are directly paid for by the investor. If such goods/services are not yet to be paid for, late payment interest will not be charged.

The outstanding tax exempt from late payment interest is the tax on the amount that is yet to be paid by state budget;

- In the cases specified in Point b Clause 4 Article 55 of the Law on Tax Administration 2019, late payment interest shall not be charged pending the analysis result, official price, actual payment or additional customs value.

(6) Late payment interest shall not be charged in case of chargeoff specified in Article 83 of the Law on Tax Administration 2019.

(7)  If the supplementation of the tax declaration dossier leads to a decrease the tax payable or the tax authority discovers a decrease in the tax payable, the late payment interest may be adjusted accordingly.

(8) Taxpayers may be exempt from paying the late payment interest specified in Clause 1 of Article 59 of the Law on Tax Administration 2019 in the force majeure events specified in Clause 27 Article 3 of the Law on Tax Administration 2019.

2. Regulations on handling of overpaid tax, late payment interest and fines in Vietnam

Regulations on handling of overpaid tax, late payment interest and fines in Vietnam under Article 60 of the Law on Tax Administration 2019 are as follows:

- If the tax, late payment interest or fine paid by a taxpayer is greater than the amount payable, the overpaid amount may be offset against the outstanding tax, late payment interest or fine, or against the tax, late payment interest or fine payable next time, or may be refunded if the taxpayer no longer has outstanding tax, late payment interest or fine.

In case the taxpayer wishes to have the overpaid amount be offset against the outstanding tax, late payment interest or fine, late payment interest shall not be charged over the period from the date on which the overpaid amount is paid to the day on which these amounts are offset by the tax authority.

- In case the taxpayer claims a refund, the tax authority shall issue a refund decision or, if the claim is rejected, provide explanation within 05 working days from the receipt of the.

- The overpaid tax, late payment interest or fine shall not be refunded in the following cases:

= In case the taxpayer fails to pay tax, late payment interest and fines within 30 days from the deadline for making such payment, the tax authority shall inform the taxpayer of the amount payable and the number of days behind schedule.

= The taxpayer no longer operates at the registered address, the overpaid amount has been announced through mass media and the taxpayer does not claim the refund within 01 years from the date of announcement.

= The overpaid amount has been paid for more than 10 years and the taxpayer does not request an offsetting or refund.

- In case the taxpayer no longer runs business at the address which has both overpaid and outstanding tax, late payment interest or fine, the tax authority shall offset the overpaid amount against the outstanding amount.

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