Vietnam – Tax Administration Law Update.

On 13 June 2019, the National Assembly of Vietnam issued the Law on Tax Administration No. 38/2019/QH14 (the “TAL 2019”), which will replace the current laws on tax administration as from 1 July 2020, including Law No. 78/2006/QH11, Law No. 21/2012/QH13, Law No. 71/2014/QH13, and Law No. 106/2016/QH13. Remarkable changes under TAL 2019 are as follows:

1. Applying modern information technology application in tax administration, applying principles of tax administration based on international rule, including the principle of operational nature, transactions to determine tax obligations, principles of risk management and other principles;

2. Clarifying risk levels in the tax administration is conducted based on the level of compliance with laws by taxpayers. In the process of classifying risk levels, tax administration authorities will consider relevant contents, including information on signs of risk, violation activities in tax administration, information on results of professional operations of tax authority and other relevant authorities in accordance with TAL 2019;

3. Implementing measures to collect taxes based on international treaties of which Vietnam is a member including:

(a)  requesting offshore tax administration authorities and other competent authorities to collect tax debts arising in Vietnam; and

(b)  supporting the offshore tax administration authorities to collect tax debts arising overseas for taxpayers based in Vietnam.

1. Introduction of a new taxation regime for offshore service providers, including e-commerce business;

2. Supplementing some provisions to ensure rights of the taxpayers and support the transactions with the tax authority:

(a)  Deadline for individuals directly to file their annual personal income tax (PIT) return is extended by one month (the last day of the 4th month from the end of the calendar year);

(b)  After the filing deadline, if mistakes in submitted tax returns come to light, taxpayers are allowed to submit revised returns up to 10 years after the filing deadline, but this must be done before the tax authorities issue a decision to commence a tax audit of the years in question;

(c)  Taxpayers are entitled to request the tax authority to pay interest at 0,03% per day based on the overpaid amount paid by the taxpayer to the tax authority;