信息

The Law on Tax Administration No. 38/2019/QH14

On the 13th of June 2019, the Vietnamese National Assembly adopted the amended Tax Administration Law No. 38/2019/QH14 ("2019 Tax Administration Law"), which shall take effect from the 1st of July 2020, and it replaces Law. No. 21/2012/QH13 dated on the 20th of November 2012. Nonetheless this Law also contains regulations on electronic invoices and documents that shall take effect only from the 1st of July 2022. Nonetheless this Law constitutes only general expression of the policy makers intentions, and it will require precise guidelines (Decrees and Circulars) in order to ensure its implementation in a near future.

This Law will bring about several changes for tax payers:

Tax authorities shall have more power:

Tax authorities shall get more authority to be able to deem tax, especially in cases where individuals or companies make illegal use of invoices for the purchase and exchange of goods, even where there is a real underlying transaction and the associated tax has been declared; where individuals or companies enter into transactions without a business rationale in order to avoid tax; where individuals or companies fail to comply with regulations on declaration of related party transactions.

The National Assembly also introduced new regulations on tax declaration obligations, tightening the tax administration of transfer pricing activities, specifically, prohibited acts including collusion, connection, and connivance between taxpayers and tax officers, tax authorities for transfer pricing and tax evasion. The amended Tax Administration Law also clearly states that the Ministry of Planning and Investment is responsible for directing and guiding relevant authorities to enhance the valuation of investment projects to prevent transfer pricing and tax avoidance.

And finally this new Laws will help to ensure tax compliance through increased cooperation between Vietnamese tax authorities and their foreign counterparts through broadened information exchanges and technical cooperation.

Quicker issuance of a tax code:

After this new Law takes effect, the process issuance of a tax registration registration (tax code) shall take only three days, compared to the current 10 days.

More flexible filing personal income tax:

Individuals will be allowed to submit their tax finalisation dossier by the last day of the 4th month from the end of calendar year (April) for PIT finalisation dossier of individuals filing directly to the tax authorities of their locality. Consequently the deadline shall be extended by 1 month compared to the actual 90 days deadline (end of March) for individuals who do their own PIT finalisation with the tax authorities. This deadline extension will provide individuals with additional time to prepare and submit their final return and reduce the number of dossiers that the tax authorities must receive during the peak season of tax finalisation.

Taxpayers will be able to make supplementary declarations of erroneous tax dossiers within 10 years from the date of expiration of the submission deadline of the erroneous tax declaration but before the announcement of the tax or other competent authorities on tax audit or inspection.

Taxpayers will still be entitled to supplement their tax declaration dossiers after the tax authorities have announced the audit or inspection decisions at taxpayers’ offices.

Legal representatives:

Legal representatives of an entity in Vietnam will need to ensure their companies are tax compliant. Under the new law, authorities will have the authority to prevent legal representatives from leaving the country if the entity they are in charge of has not paid due taxes.

Audits:

The new Law will bring about changes in the already existing two types of tax audit, that is tax inspection and tax examination. The former is longer and more specific issue focused, while the latter is shorter and has a wider coverage. Under the new law, the maximum tax examination period shall be increased from 5 to 10 working days.

Tax refunds after a tax case:

Taxpayers that want to appeal a decision are required to pay the full tax amount as well as any penalties and late payment interest first. This Law broadens taxpayers' rights and ensure their interests in the case if the taxpayer wins a tax case, in addition to being entitled to the refund of the collected taxes, penalties and interest, the taxpayers shall have the right to request the tax authorities to pay an interest of 0.03% per day based on the refunded amount.

E-commerce activities:

The new Law stipulates that tax rules related to e-commerce activities will be come into force the 1st of July 2022. Regulations on e-commerce activities still require clarification in the present state; however, some notable highlights include:

The State Bank will play a role in the taxation of e-commerce activities, including the building and development of a nationwide payment system to facilitate the collection of taxes from e-commerce activities.
Commercial banks will be responsible for the collection of tax on behalf of on behalf of overseas parties who conduct and derive income in Vietnam from e-commerce activities.
Non-resident suppliers doing business in Vietnam via e-commerce, digital base and other services who do not have a permanent establishment in Vietnam, are obliged to register, declare and pay tax in Vietnam, or authorise other parties to do so on their behalf.
The Vietnamese party, when making payment to foreign organisations and individuals who are not present in Vietnam but carrying out business based on a digital intermediary platform, has the obligation to withhold tax on behalf of the foreign party according to the tax code granted to these organisations and individuals.
E-invoices will be mandatory for all businesses from November 2020.