Implementation of resolution on handling tax debt ensures efficiency and tightness

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The resolution is valid for three years. Photo: T.L

Strict and specific regulations

According to Doan Xuan Toan, Deputy Director of Department of Debt Management and Tax Enforcement (under the General Department of Taxation), to effectively implement the resolution in the practice, there are two key issues that must be specified, including freezing tax debts and clearing tax debts. Freezing tax debts will be applied from July 1 for tax payers who died, went missing or lost civil act capacity; taxpayers who decided to dissolve; bankrupt taxpayers, taxpayers no longer do business at the registered address; taxpayers who have had their business registration certificate revoked.

In addition, conditions for tax debt clearing for each different taxpayer will be specified. Accordingly, tax payers who died, went missing or lost civil act capacity, must have a death certificate, a death notice or a court decision stating they are dead, missing or have lost civil act capacity.

If tax payers dissolve, a dissolution decision or notice issued by a business registration agency on the dissolution in process on the national information system on enterprise registration is required.

For bankrupt tax payers, an application for opening bankruptcy proceedings or a notice of acceptance of the bankruptcy application issued by the court is required.

If the tax payer no longer does business at the registered address or has had their business registration certificate revoked, the tax authority must accurately determine the tax payer has no longer done business in reality and written certification between the local tax administration agency and the People's Committee of the commune, ward or town (where the taxpayer headquarters or contact address is registered) is required.

A representative of the General Department of Taxation said that for writing off debts for late payment fines and late payment interest before July 1, 2020 for taxpayers who have suffered material losses due to natural disasters, disasters or epidemics, fire, unexpected accidents, the tax payer must submit a confirmation by authorities on these problems, a written certification of the damage value by an independent auditing organisation or valuation agency, or insurance agency. Late payment fines and late payment interest shall be written off based on the amount of tax debt arising beyond the value of damaged properties or goods after deducting compensation and insurance.

Also according to Toan, remission of late payment fines and late payment interest for debts before July 1, 2020, for taxpayers who provide goods and services paid directly by the State budget but not yet paid, must satisfy the following conditions: There is a written certification by a State budget user on non-payment; economic contracts signed with a State budget user and work acceptance records. The amount of late payment fines and late payment interest shall be written off based on tax debts but tax debts shall not exceed the late payment amount.

The guidance circular will be issued in May

According to Toan, the resolution on handling tax debts is valid for three years from July 1. This is a key legal framework for handling tax debts. To promptly deploy and ensure feasible and strict implementation in accordance with the law, there is a need for a system of guiding documents.

The General Department of Taxation has drafted a guidance circular on procedures for freezing tax debts and remission of tax debts; processes for handling tax debts to check and control tax debts, consulted relevant units. The General Department of Taxation has developed a draft directive of the Minister of Finance on the establishment of steering committees for the implementation of the resolution at central and local levels; draft documents sent to People's Committees of provinces and cities to direct the implementation of the resolution in each locality.

Toan said after being consulted by relevant agencies and local tax departments, the guidance circular on the implementation of the resolution on handling tax debts will be issued in May.

For tax payers to grasp the contents of handling tax debts, the General Department of Taxation has requested tax departments strengthen providing information; coordinated with the press to publicise to people and businesses. After guidance documents are issued, the General Department of Taxation will train and instruct tax departments and tax officers for unified compliance. At the same time, it will also publicise procedures for organisations and individuals to know, monitor and supervise.

To handle tax debts after the effective date of resolution, the General Department of Vietnam Customs has directed Tax authorities to review and classify tax debts according to each area, each subject to ensure accurate handling; work with local government and agencies to check and verify taxpayers' information and publicise the list of tax payers subject to be frozen and cleared tax debts nationwide. Prepare procedures and dossiers to submit them to agencies for consideration.

The General Department of Taxation has also developed management software, closely controlled the handling of tax debts and supported tax authorities in supervising tax debt handling.