When is an enterprise entitled to cancel late payment interest in Vietnam?

In today’s complex business landscape, understanding when your enterprise can legally cancel late payment interest is crucial for maintaining healthy cash flow and vendor relationships. With increasing regulatory scrutiny and evolving commercial practices, companies must navigate the fine line between exercising their rights to waive interest charges and complying with applicable payment legislation that often aims to protect smaller businesses from unfair payment practices. Cancellation of late tax payment interest is a humane policy, in accordance with international practices. So when can businesses write off late tax payment interest? Let’s follow the article below of Viet An tax agent to better understand this issue.

Find out tax debt cancellation

According to the provisions of Vietnam’s tax administration law, tax debt cancellation is the tax administration agency’s cancellation of taxes that taxpayers should have paid but fall into a situation where they are unable to pay that debt. These cases are generally due to the death of the taxpayer, loss of credit, deprivation of citizenship, loss of civil act capacity, enterprise or cooperative declaring bankruptcy.

When is an enterprise entitled to cancel late payment interest

When will businesses be able to write off late tax payment interest is a question that many businesses and individuals are interested in. Here, Viet An tax agent will disseminate the cases of tax debt cancellation:

• Enterprises and cooperatives are declared bankrupt after making payments in accordance with the bankruptcy law but no longer have enough assets to pay taxes, late payment interest, and fines.
• An individual dies or is declared dead or incapable of civil acts without having enough assets (including property entitled to inheritance) to pay taxes.
• Tax debts and fines for late tax payment of taxpayers other than those specified in Clauses 1 and 2, Article 85 of the Law on Tax Administration 2019 for which the tax authority has sent a notice of the compulsory tax amount payable under the provisions of Clause 1, Article 125 of this Law and tax debts, fines that have exceeded 10 years from the expiration date of tax payment.
• Persons who are obliged to pay tax are business individuals, heads of households, business households, owners of private enterprises, and one-member limited liability companies that have been discharged from tax debts as prescribed. However, after a period of time when they return to production and business or establish a new business establishment, they must be obliged to refund to the State the previously payable and late tax amount that has been deleted.
• Tax, late payment interest and fines shall be eliminated for cases severely affected by natural disasters, epidemics or disasters and the tax payment deadline is extended but still suffers damage, production and business capacity has not yet been restored and the ability to pay fines has not yet been restored. late payment interest.

The Government shall provide for close coordination between tax administration agencies and business registration agencies to ensure that the tax amounts, late payment interest and fines that have been cleared for the above-mentioned subjects must be refunded into the state budget according to the provisions of Clause 3 of this Article before the issuance of business registration certificates.  business registration.

What does a tax payment cancellation dossier include?

When an enterprise is eligible for late payment interest debt cancellation, it is necessary to prepare a complete set of tax debt cancellation dossiers:

• A written request for cancellation of tax arrears, late payment interest and fines of the tax administration agency directly managing the taxpayer eligible for cancellation of tax arrears, late payment interest and fines;
• Decision to declare bankruptcy in case the enterprise or cooperative is declared bankrupt;
• Documents related to the request for cancellation of tax arrears, late payment interest, and fines according to the regulations of the Ministry of Finance.

When is an enterprise eligible for tax late payment interest debt cancellation – Answering related issues

How long is the time limit for processing tax debt cancellation dossiers

Article 88 of the Law on Tax Administration 2019 stipulates the responsibilities and time for processing dossiers of tax debt cancellation, late payment interest, and fines as follows:

• Immediately after the application for debt cancellation is received by the competent authority, there will be a notice of completion of the application within 10 working days if the application is not in accordance with regulations.
• After that, the competent person must issue a decision on tax debt cancellation or notify the dossier submitter if he or she is not eligible for tax debt cancellation, late payment interest, and fines within 60 days from the date of receipt of a complete dossier.

When can a cooperative declared bankrupt have its tax debt canceled?

Cooperatives declared bankrupt after having fulfilled their payment obligations as prescribed by law but are unable to pay tax debts and late payment interest may have their tax debts written off.

Can the owner of a single-member limited liability company establish a new company after being cleared of tax debts?

The owner of a single-member limited liability company is allowed to establish a new company after the tax debt is canceled. However, it is necessary to fulfill the obligation to pay tax debts that have been written off before establishing a new business establishment.

Above is the answer to the question of when can businesses get tax late payment interest debt written off from Viet An tax agent – Please contact us for more detailed answers!