THE PENALTY FOR LATE PAYMENT OF TAX IN 2022 - TAX AGENT TASCO

1. 7 cases of late payment of tax

Clause 1, Article 59 of the Law on Tax Administration 2019 stipulates cases in which late payment interest is required, including:

🍂 Taxpayers are late to pay tax compared with the prescribed deadline, the deadline for a tax payment extension, the deadline stated in the notice of the tax authority, the deadline stated in the decision on tax imposition, or the decision on handling of tax authorities.

🍂 Taxpayers who make additional declarations to tax declaration documents that increase the payable tax amount or tax administration agencies or other competent state agencies that have the authority to inspect and detect understatement of payable tax amounts must pay late payment interest for the additional tax payable.

The time for calculating late payment interest is counted from the day following the last day of the tax payment deadline of the tax period with errors or omissions or from the date of expiration of the tax payment deadline of the original customs declaration.

🍂 The case of tax debt is gradually paid as prescribed in Clause 5, Article 124 of the Law on Tax Administration 2019.

🍂 The taxpayer makes additional declarations to the tax declaration documents that reduce the refunded tax amount, or the tax administration agency or other competent state agency has the authority to inspect and detect that the amount of tax refunded is less than the tax amount that has been refunded, a late payment interest must be paid with the refunded tax amount which must be recovered from the date of receipt of the refund from the state budget.

🍂  In case the taxpayer is not sanctioned for an administrative violation on tax administration due to the expiration of the statute of limitations for sanctioning but has arrears in the tax amount as prescribed in Clause 3, Article 137 of the Law on Tax Administration 2019.

🍂 In case the taxpayer is not sanctioned for an administrative violation of tax administration specified in Clauses 3 and 4, Article 142 of the Law on Tax Administration 2019.

🍂  Agencies or organizations authorized to collect the tax by tax administration agencies that are late in transferring taxpayers' tax money, late payment interest, or fines to the state budget must pay late payment interest with the amount of late transfer according to regulations.

2. How to calculate late payment tax

Clause 2, Article 59 of the Law on Tax Administration 2019 stipulates the rate of late payment tax and time for late payment interest as follows:

“a) The late payment interest rate is 0.03%/day calculated on the late payment tax amount;

b) The time for calculating late payment interest is calculated continuously from the day following the day on which the late payment interest is incurred specified in Clause 1 of this Article to the day immediately preceding the day on which the tax debt, tax refund, or tax increases, the fixed tax amount and the late-transfer tax have been remitted into the state budget.”.

Thus, the one-day late payment interest is calculated as follows:

1 day late payment rate = 0.03% x Tax amount for late payment

3. 4 cases where late payment interest is not charged

Clause 5 of the Law on Tax Administration 2019 stipulates cases in which no late payment interest is charged, specifically:

⭐ Taxpayers providing services and goods are paid by the state budget, including subcontractors specified in the contract signed with the investor, and are directly paid by the investor but not yet paid.

The amount of tax arrears, excluding late payment, is the total amount of tax owed to the taxpayer's budget but not exceeding the unpaid budget amount.

⭐ Goods subject to assessment and analysis to determine the exact amount of tax payable shall not be charged late payment interest while waiting for assessment and analysis results.

⭐ Goods that do not have an official price at the time of registration of the customs declaration will not be charged late payment fees during the time when the official price is not available.

⭐  Goods with actual payments, goods with adjustments added to the customs value that has not been determined at the time of customs declaration registration, are not required to pay late payment interest during the time when the amount has not been determined the actual payment, the adjustments added to the customs value have not been determined.

Note: Late payment interest has not been charged for cases where debt is frozen according to the provisions of Article 83 of the Law on Tax Administration 2019.

4. When is the late payment fee exempted?

According to Clause 8, Article 59 of the Law on Tax Administration 2019, in principle, taxpayers must pay late payment interest but will be exempted from tax late payment of tax in case of force majeure, specifically:

🍀 Taxpayers suffer material damage due to natural disasters, epidemics, catastrophes, fires, unexpected accidents.

🍀 Other force majeure cases according to the Government's regulations.

5. Distinguishing late tax payment with a late tax fine

◾ Tax-related late payment interest includes two types: Late payment of tax and late payment fines for tax administrative violations.

◾ Both are late payments, but these two types are different in nature and level of payment, specifically:

📎 There are the regulations on the cases that must be paid, exempted, and not paid and how to calculate the late payment of tax. If you have any questions about the above issue, please contact TASCO at 085.4862.446 for answers.

Contact TASCO Tax Agent immediately in the following ways for a completely free consultation!!!

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