On March 3rd, the General Department of Taxation issued document No. 897/TCT-QLN regarding the extension of tax payment deadlines and exemption from late payment penalties due to the impact of the Covid-19 pandemic.
Accordingly, the tax authorities have provided full and detailed guidance on cases eligible for extensions, waivers of late payment penalties, as well as the required documents, procedures, and authority, creating the most favorable conditions for taxpayers to comply.
1. In what cases is an extension for tax payment granted?
Clause 1, Article 31 of Circular 156/2013/TT-BTC dated November 6, 2013, of the Ministry of Finance (consolidated document 14/VBHN-BTC dated May 15, 2017) stipulates the cases eligible for tax payment extension as follows:
“a) Suffering material damage that directly affects production and business due to natural disasters, fires, or unexpected accidents.
Material damage refers to losses to the taxpayer's assets, quantifiable in monetary terms, such as machinery, equipment, vehicles, materials, goods, factories, offices, money, and valuable documents equivalent to money.
An unforeseen accident is an unfortunate event that occurs suddenly and unexpectedly, caused by external factors, directly affecting the taxpayer's production and business activities, and not due to any violation of the law. Cases considered unforeseen accidents include: traffic accidents; work accidents; serious illnesses; infectious diseases occurring at times and in areas where competent authorities have declared outbreaks; and other force majeure events.
2. Application for extension of tax payment deadline
Clause 3, Article 31 of Circular 156/2013/TT-BTC dated November 6, 2013, issued by the Ministry of Finance, stipulates:
To be granted an extension for tax payment as stipulated in point a, clause 1 of this Article, the taxpayer must prepare and submit an application for tax payment extension to the tax authority directly managing the taxpayer. The application includes:
"- The taxpayer's request for an extension of the tax payment deadline must be in the form No. 01/GHAN issued together with this Circular;
– A record of inventory and assessment of the material damage value prepared by the taxpayer or their legal representative;
– A document confirming that the taxpayer suffered damage at the location of the natural disaster, fire, or unexpected accident, and the time of the natural disaster, fire, or unexpected accident, issued by one of the following agencies or organizations: the police; the People's Committee of the commune or ward; the Management Board of the Industrial Park, Export Processing Zone, or Economic Zone where the natural disaster, fire, or unexpected accident occurred; or a rescue and relief organization;
– Documents proving the insurance company has accepted compensation claims (notarized or certified copies, if applicable); documents specifying the responsibility of the organization or individual liable for compensation (notarized or certified copies, if applicable). For taxpayers who are legal entities, the above documents must be originals or copies signed by the legal representative and stamped with the entity's seal.
3. Authority to extend tax payment deadlines
Point a, Clause 5, Article 31 of Circular 156/2013/TT-BTC dated November 6, 2013, issued by the Ministry of Finance, stipulates:
“a) For cases stipulated in points a, b, and c of Clause 1 of this Article: The head of the tax authority directly managing the taxpayer shall decide the amount of tax to be extended and the extension period for tax payment.”
3.1. Regarding cases where late payment penalties for taxes are waived.
Clause 1, Article 35 of Circular 156/2013/TT-BTC dated November 6, 2013, issued by the Ministry of Finance, stipulates:
“1. Taxpayers who are required to pay late payment penalties as stipulated in Article 34 of this Circular have the right to request exemption from late payment penalties in cases of natural disasters, fires, unexpected accidents, epidemics, serious illnesses, or other force majeure circumstances.”
3.2. Application for waiver of late payment penalty
Clause 3, Article 35 of Circular 156/2013/TT-BTC dated November 6, 2013, issued by the Ministry of Finance, stipulates:
“a) A written request for exemption from late payment penalties from the taxpayer, including the following main contents: name, tax identification number, and address of the taxpayer; basis for requesting exemption from late payment penalties; and the amount of late payment penalties requested to be exempted;
b) Depending on the specific case, the application for exemption from late payment penalties must include the following additional documents:
b.1) In cases of natural disasters, fires, unexpected accidents, or epidemics, the following must be provided:
– A report determining the extent and value of property damage issued by a competent authority such as a Valuation Council established by the Department of Finance, or professional valuation companies providing valuation services under contract, or the Valuation Center of the Department of Finance;
– A document confirming that the taxpayer suffered damage at the location of the natural disaster, fire, unexpected accident, or epidemic, and specifying the time of the natural disaster, fire, unexpected accident, or epidemic, issued by one of the following agencies or organizations: the commune/ward police or People's Committee, the Management Board of the Industrial Park, Export Processing Zone, or Economic Zone where the natural disaster, fire, or unexpected accident occurred, or a rescue and relief organization;
– Documents proving that the insurance company has accepted the claim for compensation (if any);
– The file specifies the responsibility of the organization or individual to provide compensation (if any).
3.3. Authority to waive late payment penalties
Clause 4, Article 35 of Circular 156/2013/TT-BTC dated November 6, 2013, issued by the Ministry of Finance, stipulates:
4. The head of the tax authority who issued the notice of late payment penalty has the right to issue a decision to waive the late payment penalty according to form No. 01/MTCN (issued together with this Circular) for the notice that he/she has issued.
