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Late tax payment is a significant issue in tax administration in Vietnam, directly affecting the state budget and potentially leading to serious legal consequences for taxpayers. To maintain the integrity and efficiency of the tax system, Vietnamese law clearly stipulates measures for handling late tax payments.
This article will explore the current regulations regarding the handling of late tax payments, including penalties, interest rates, and enforcement measures that tax authorities may apply. Additionally, it will cover exemptions and reductions in late payment penalties and the steps taxpayers need to take to manage late tax payments effectively and in accordance with the law. This understanding will help taxpayers fulfill their obligations while avoiding unnecessary risks and losses.
Handling Late Tax Payments
1. Circumstances Requiring Late Payment Penalties:
a) Taxpayers who are late in paying taxes beyond the stipulated deadline, extended deadline, notification deadline from tax authorities, or the deadline in tax assessment or treatment decisions from tax authorities.
b) Taxpayers who submit supplementary tax declarations increasing the payable tax amount or if tax authorities or competent state agencies discover under-declared payable tax amounts during inspections or audits. The late payment penalty is applied to the additional payable tax from the day following the original tax deadline of the erroneous tax period or the initial customs declaration deadline.
c) Taxpayers who submit supplementary tax declarations reducing the refundable tax amount or if tax authorities or competent state agencies discover that the refunded tax amount exceeds the correct refundable amount. The late payment penalty is applied to the recovered refundable tax from the date the refund was received from the state budget.
d) Cases where taxpayers are allowed to pay overdue taxes in installments as prescribed in Clause 5, Article 124 of the Law on Tax Administration.
e) Cases where no administrative penalties are imposed for tax management violations due to the expiration of the statute of limitations, but tax arrears are collected as prescribed in Clause 3, Article 137 of the Law on Tax Administration.
f) Cases where no administrative penalties are imposed for tax management violations as prescribed in Clauses 3 and 4, Article 142 of the Law on Tax Administration.
g) Organizations authorized by tax authorities to collect taxes that delay transferring tax, late payment penalties, or fines to the state budget must pay late payment penalties on the delayed amounts.
2. Calculation and Duration of Late Payment Penalties:
a) The late payment penalty rate is 0.03% per day on the late tax amount.
b) The late payment penalty duration is continuously calculated from the day following the occurrence of late payment as specified in Clause 1 until the day before the tax debt, recovered tax refund, additional payable tax, assessed tax, or delayed transferred tax is fully paid into the state budget.
3. Self-Assessment and Payment by Taxpayers:
Taxpayers must self-assess the late payment penalties as specified in Clauses 1 and 2 and pay them into the state budget accordingly. If taxpayers have overpaid taxes, late payment penalties, or fines, they must follow the provisions of Clause 1, Article 60 of the Law on Tax Administration.
4. Tax Authority Notification:
If taxpayers have not paid taxes, late payment penalties, or fines within 30 days of the deadline, tax authorities must notify them of the outstanding amounts and the days of late payment.
5. Exemptions from Late Payment Penalties:
a) Taxpayers providing goods or services paid for by state budget funds, including subcontractors specified in contracts with investors and directly paid by the investors, are exempt from late payment penalties for amounts up to the unpaid state budget funds.
b) Cases specified in point b, Clause 4, Article 55 of the Law on Tax Administration, including awaiting analysis, verification results, official price determination, or final payment amounts, are exempt from late payment penalties.
6. Postponement of Late Payment Penalties:
Late payment penalties are postponed for cases specified in Article 83 of the Law on Tax Administration.
7. Adjustment for Reduced Tax Obligations:
Taxpayers who submit supplementary tax declarations reducing payable taxes or if tax authorities or competent state agencies discover reduced payable tax amounts are entitled to adjust the calculated late payment penalties accordingly.
8. Exemption in Force Majeure Cases:
Taxpayers subject to late payment penalties under Clause 1 are exempt from penalties in force majeure cases as defined in Clause 27, Article 3 of the Law on Tax Administration.
9. Minister of Finance Regulations:
The Minister of Finance shall specify the procedures for handling late tax payments.
Handling Overpaid Taxes, Late Payment Penalties, and Fines
1. Offsetting Overpayments:
Taxpayers with overpaid taxes, late payment penalties, or fines may offset these amounts against outstanding tax debts, late payment penalties, or fines or apply them to future tax payments. If no outstanding debts exist, they can request a refund of the overpaid amounts. No late payment penalties are calculated on the offset amount from the overpayment date to the date the tax authorities process the offset.
2. Refund Requests:
Upon receiving a taxpayer’s request for a refund of overpaid amounts, tax authorities must issue a refund decision or provide a written explanation for denial within five working days.
3. Non-refundable Overpayments:
Tax authorities shall handle overpayments in accounting records and electronic data systems in the following cases:
a) Taxpayers refuse the overpayment refund in writing.
b) Taxpayers are inactive at their registered address, have been notified of the overpayment via public media, and have not requested a refund within one year of notification.
c) Overpayments remain unclaimed for over ten years, during which taxpayers neither offset nor claim refunds.
4. Offsetting for Inactive Taxpayers:
Tax authorities shall offset overpayments against outstanding tax debts, late payment penalties, or fines for taxpayers inactive at their registered business address.
By understanding and complying with these regulations, taxpayers can manage their tax obligations effectively and avoid unnecessary penalties and legal complications.
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