Regulations on handling of late tax payment in Vietnam

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

1. Regulations on handling of late tax payment in Vietnam

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

- 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.

- 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.

- 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.

- 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.

- 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.

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

- 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.

- 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.

- The Minister of Finance shall provide for handling of late tax payment.

2. Regulations on the order for payment of tax, late payment interest and fines in Vietnam

The order for payment of tax, late payment interest and fines under Article 57 of the Law on Tax Administration 2019 are as follows:

- Tax, late payment interest and fines shall be paid in chronological order and in the order specified in Clause 2 of Article 57 of the Law on Tax Administration 2019.

- Order for payment of tax, late payment interest and fines:

+ Overdue tax, fines and late payment interest subject to enforcement;

+ Overdue tax, fines and late payment interest that are yet to subject to enforcement;

+ Recently incurred tax, late payment interest and fines.

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