Vietnam's Tax Administration Law - 38_2019_QH14_425672

LAW

ON TAX ADMINISTRATION

Pursuant to the Constitution of the Socialist Republic of Vietnam;

The National Assembly promulgates the Law on Tax administration.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of amendments

This Law provides for administration of taxes and other amounts payable to the state budget.

Article 2. Regulated entities

1. Taxpayers include:
a) Organizations, households, household businesses and individuals paying taxes in compliance with provisions on taxation;
b) Organizations, households, household businesses, individuals paying other amounts to the state budget;
c) Organizations and individuals deducting tax from income.
2. Tax authorities, including:
a) General Department of Taxation, Departments of Taxation of provinces, and Sub-departments of Taxation of districts;
b) General Department of Vietnam Customs, Departments of Customs, Post Clearance Audit Departments, Sub-department of Customs.
3. Tax officials and customs officials (hereinafter referred to as “tax officials”).
4. Other relevant state agencies, organizations and individuals.

Article 3. Definitions

In this Law, the undermentioned terms shall be defined as follows:

1. “tax” means a compulsory amount payable to the state budget by organizations, households, household businesses, individuals as prescribed by tax laws.
2. Other amounts payable to the state budget collected by tax authorities include:
3. a) Fees and charges prescribed in the Law on Fees and charges;
4. b) Land levies payable to the state budget;
5. c) Rents for land and water surface;
6. d) Payment for the mining permit;
7. dd) Payment for the water resources exploitation permit;
8. e) Amounts payable to the state budget derived from revenue from sale of property on lands, transfer of land use rights as prescribed in the Law on Management and use of public property;
9. g) Fines for administrative tax offences and customs offences;
10. h) Late payment interest and other revenues as prescribed by law.
11. Other amounts payable to the state budget not collected by tax authorities include:
12. a) Payments for dumping at sea prescribed in the law on natural resources, environment of sea and islands;
13. b) Fees for protection and development of paddy soils in compliance with provisions on land;
14. c) Fines for administrative violations in accordance with provisions on imposition of penalties for administrative violations other than administrative tax offences and customs offences;
15. d) Amounts payable to the state budget in accordance with provisions on management, use of public property collected from the management, use, exploitation of public property for purposes of business, renting, joint venture, association, after completion of tax, fee and charge liabilities;
16. dd) Foreign aids;
17. e) Other revenues as prescribed by law.
18. “premises ” of the taxpayer means the location where the taxpayer partially or fully operate their business, including the headquarters, branches, stores, factories, goods storage, asset storage; residences or places where tax is incurred.
19. “tax identification number” or “TIN” means a series of 10 or 13 digits and other characters assigned by tax authorities to taxpayers to serve tax administration.
20. “tax period” means a period of time used to determine tax liabilities that must be paid towards the state budget in accordance with provisions on taxation.
21. “tax return” means a document stipulated by the Minister of Finance and used by taxpayers to declare information for the purpose of determining tax liabilities.
22. “customs declaration” means a document stipulated by the Minister of Finance and used as a tax return for imported or exported goods.
23. “tax dossier” is either an application for taxpayer registration, tax declaration, tax refund, tax exemption, tax reduction, late payment interest exemption, late payment interest cancellation, extension of tax payment deadline, tax payment by installments, tax cancellation; customs dossier; application for tax debt freezing; application for cancellation of tax debts, late payment interest, penalties.
24. “Tax statement” means the calculation of tax accrued in a tax year or over the period from the beginning of a tax year to the termination of taxable activities, or over the period during which taxable activities occur as prescribed by law.
25. “Tax year” is determined based on the Gregorian calendar, from January 01 to December 31; in case the fiscal year is different from the Gregorian year, the tax year will be the fiscal year.
26. “Tax liability fulfillment” means full payment of tax liabilities, late payment interest, penalties of tax violations and other amounts payable to the state budget.
27. “tax enforcement” means the application of measures specified in this Law and other relevant provisions to enforce taxpayers’ fulfillment of their tax liabilities.
28. “tax risk” means the risk of non-compliance from taxpayers leading to loss of the state budget revenue.
29. 15. “risk management in tax administration” means the systematic application of provisions and professional procedures to determine, evaluate and categorize the risks that may have negative impacts on the efficiency and validity of tax administration, providing a basis for tax authorities to reasonably allocate resources and apply effective management measures.
30. “advance pricing agreement” means a documented agreement between tax authorities and taxpayers or between tax authorities, taxpayers and tax authorities of foreign countries and territories with whom Vietnam signed and acceded to agreements on prevention of double taxation and tax evasion for income tax within a time limit. Taxing bases, methods of pricing or pricing based on market rate are specified in this agreement. Advance pricing agreement is established before taxpayers file their taxes.
31. “tax debt” means the tax and other amounts payable to the state budget that the taxpayer has yet to pay to the state budget by the deadline prescribed by law.
32. “commercial database” means a system of commercial information and data of enterprises that are organized, arranged and updated, and are provided to tax authorities by business organizations as prescribed by law.
33. “taxpayer information” means information on taxpayers and their tax liabilities provided by taxpayers or collected by tax authorities during the process of tax administration.
34. “tax administration information system” includes systems for tax statistical and accounting information and other information in service to tax administration.
35. “related parties” means parties directly or indirectly participating in the management, control, capital contribution of enterprises; parties under direct or indirect management, control of an organization or individual; parties whose capitals are contributed to by one organization or individual; enterprises managed, controlled by close-knit individuals of a family.
36. “related-party transaction” means a transaction between related parties.
37. “independent transaction” means a transaction between unrelated parties.
38. “regulations of independent transaction” means regulations implemented in tax declaration and pricing determination for taxpayers with related-party transactions so as to reflect the transaction conditions of related-party transactions equivalent to those of independent transactions.
39. “regulations of tax liabilities determined by nature of activities and transactions” means regulations implemented in tax administration to analyze business transactions and activities of taxpayers so as to determine tax liabilities corresponding to values generated by the nature of those business transactions and activities.
40. “supreme parent company” of a conglomerate means a legal entity with direct or indirect owner’s equity in other legal entities of a multinational conglomerate, not owned by any other legal entity, with its consolidated financial statements remaining separate from financial statements of other legal entities worldwide.
41. “Force majeure events” include:
42. a) Taxpayers suffering from physical damage caused by natural disasters, catastrophes, epidemics, fire, sudden accidents;
43. b) Other force majeure situations as prescribed by the Government.

Article 4. Contents of tax administration

1. Taxpayer registration, tax declaration, tax payment, tax liability imposition.
2. Tax refund, tax exemption, tax reduction, tax cancellation.
3. Tax debt charge off; cancellation of tax debts, late payment interest, penalties; late payment interest and penalty exemption; late payment interest cancellation; extension of tax payment deadline; tax payment by installments.
4. Administration of taxpayer information.
5. Administration of invoices and records.
6. Tax audit, tax document examination and implementation of preventive measures against tax violations.
7. Tax enforcement.
8. Actions against tax-related administrative violations.
9. Settlement of tax-related complaints, denunciations.
10. Tax-related international cooperation.
11. Propagation and assistance for taxpayers.

Article 5. Rules for tax administration

1. All organizations, households, household businesses, individuals shall pay their taxes in compliance with the law.
2. Tax authorities and other State agencies tasked with revenue administration shall implement tax administration as prescribed in this Law and other relevant provisions, ensuring publicity, transparency, equality and ensuring legitimate rights and benefits of taxpayers.
3. Agencies, organizations, individuals are responsible for participating in tax administration as prescribed by law.
4. Implement reform of administrative procedures and application of modern information technology to tax administration; apply tax administration rules in accordance with international practice, including regulations of tax liabilities determined by nature of activities and transactions, regulations of risk management in tax administration and other regulations suitable with Vietnamese conditions.
5. Take priority measures when carrying out tax-related procedures for imported and exported goods in compliance with provisions on customs and Governmental provisions.