Can fines and late payment interest be exempted in case of force majeure?

VCN - Bautex Vina Co., Ltd. proposed to Customs to consider exempting administrative fines and late payment interest in force majeure cases caused by the pandemic.

According to Binh Phuoc Customs Department, during post-clearance audit, the unit had conducted inspection for the yarn item of Bautex Vina Co., Ltd. With inspection results, Binh Phuoc Customs Department issued a notice to impose tax on yarn products due to the incorrect declaration of HS codes.

However, at the time of inspection, Bautex Vina Co., Ltd. said the Customs authority imposed tax on customs declarations registered after the issuance date of a document directing to conduct post-clearance audit for goods of type A12. Post-clearance audit within five years after the goods have been cleared for A12 business type will cause problems for enterprises because enterprises have calculated the profits after producing goods. Ff the customs authority conducts a post clearance audit after clearance and imposes tax on large amounts, the firm does not calculate this estimate.

Bautex Vina Co., Ltd emphasised that, due to the impact of the pandemic, the company has no orders, customers are making late payments and businesses are maintaining moderate operations.

Binh Phuoc Customs officials check vehicles on entry and exit. Photo: N.H
Binh Phuoc Customs officials check vehicles on entry and exit. Photo: N.H

Therefore, Bautex Vina Co., Ltd. agreed to pay the tax assessment but asked for an extension of the tax assessment until December 31, 2021. At the same time, Bautex Vina Co., Ltd. proposed the Customs authority consider exempting administrative fines and late payment interest. The reason Bautex Vina Co., Ltd. said that because of the impact of the pandemic, the operation of firms faced many difficulties.

Regarding this issue, according to General Department of Vietnam Customs, Point a, Clause 27, Article 3 of the Law on Tax Administration No. 38/2019/QH14 stipulates one of the force majeure cases: “a) The taxpayer suffers material damage due to experiencing natural disasters, catastrophes, epidemics, fires, unexpected accidents.”

Clause 8, Article 59 of the Law on Tax Administration No. 38/2019/QH14 stipulates: “8. Taxpayers who must pay late payment interest as prescribed in Clause 1 of this Article are exempted from late payment interest in case of force majeure specified in Clause 27, Article 3 of this Law.”

The time limit for extending deadline for tax payment is prescribed as follows: a) No more than trwo years from the date of expiration of time limit of tax payment for the case specified at Point a, Clause 1 of the article.

Clause 1, Article 140 of the Law on Tax Administration No. 38/2019/QH14 stipulates exemption from fines for tax administration violations: “1. Taxpayers who are fined for administrative violations of tax administration suffer damage in the event of force majeure specified in Clause 27, Article 3 of this Law shall be exempt from fines. The maximum total amount of fines shall not exceed the value of damaged property or goods. 2. Not exempting from fines for administrative violations on tax administration for cases where the decision on sanctioning administrative violations on tax administration has been completed by tax administration agencies or competent State agencies.”

Point a1, Clause 2, Article 11 of Circular 06/2021/TT-BTC dated January 22, 2021 of the Ministry of Finance stipulating: “2. Documents enclosed with the official letter requesting the extension of tax payment for the case specified at Point a, Clause 1, Article 62 of the Law on Tax Administration… a.1) A written certification from one of the following agencies or organisations: Police offices of communes, wards and townships; People's Committees, wards and townships; Management Board of Industrial Parks, Export Processing Zones, Economic Zones, Border Gate Management Boards, Airport Authorities, and Port Authorities where force majeure events have occurred causing natural disasters, catastrophes, epidemics, and unexpected accidents causing material damage, directly affecting production and business: 1 original paper.”

Compared to the above provisions, the case of Bautex Vina Co., Ltd. has been taxed and the enterprise is still operating so it must pay late payment interest and fines.

By Nụ Bùi/Thanh Thuy

Related News

Several real estate businesses were forced to pay taxes

Several real estate businesses were forced to pay taxes

VCN - Many real estate businesses with tens of billions of VND in tax debt have been forced by the Customs authority to stop customs procedures at the request of the Tax authority.
Customs collects about VND 1,000 billion from post clearance audit

Customs collects about VND 1,000 billion from post clearance audit

VCN – In 2023, the Customs industry collected about VND1,000 billion from the post clearance audit.
Customs creates maximum facilitation for agricultural exports

Customs creates maximum facilitation for agricultural exports

VCN - In addition to creating the most favorable conditions for export agricultural products, the Customs agency recommends businesses to establish a methodical foundation in the production stages, giving priority to the goal of improving quality, thereby increasing the quality of commodity competitiveness.
Two cars as means of administrative violations auctioned

Two cars as means of administrative violations auctioned

VCN- The Ministry of Finance has issued a decision on handling confiscated means of administrative violation. Accordingly, the Ministry approved theaction plan for two cars that are material evidence, means of administrativeviolation seized by Nghe An Customs Department.

Latest News

It is necessary to build a national database on cross-border trade and transport

It is necessary to build a national database on cross-border trade and transport

VCN - Build a national database on cross-border trade and transport to store and share information to facilitate cross-border trade and transport as well as improve the efficiency and effectiveness of state management.
Removing difficulties in tax exemption and refund policies for export processing enterprises

Removing difficulties in tax exemption and refund policies for export processing enterprises

VCN - The Customs agency has received many proposals from businesses about answering and guiding policies on tax exemption, import tax and VAT refund for export processing enterprises. The General Department of Customs has responded and provided instructions for each specific case.
Reviewing the list of scrap that is temporarily suspended from temporary import and re-export business

Reviewing the list of scrap that is temporarily suspended from temporary import and re-export business

VCN - Scrap is a sensitive item with many potential risks of environmental pollution, directly affecting human health and the ecosystem. Therefore, strict management measures are needed to avoid the risk that Vietnam become a scrap gathering country in the world.
New law expected to boost financial leasing

New law expected to boost financial leasing

The law, which will take effect from July 1 this year, allows financial leasing companies to establish subsidiaries to handle and exploit bad debt assets. It also states that small financial leasing deals with value under VNĐ100 million do not need to control the purpose of capital use.

More News

5% VAT on fertilisers to create fairer market: domestic producers

5% VAT on fertilisers to create fairer market: domestic producers

The absence of VAT on fertilisers has prevented domestic producers from declaring and deducting input VAT, which leads to higher cost of domestically produced fertilisers, by an estimated 5-8 per cent, and makes them vulnerable in competition from imported fertilisers.
Why not reduce export tax on fertilizer products to 0%?

Why not reduce export tax on fertilizer products to 0%?

VCN - Clarifying a number of contents related to the draft Decree amending and supplementing a number of articles of Decree No. 26/2023/ND-CP on Preferential Export Tariffs, Import Tariffs, List of Goods and Rates Absolute tax, mixed tax, import tax outside the tariff quota regarding the export tax rate for some types of fertilizers, the Ministry of Finance has clarified the reason why it does not adjust the export tax rate for this product.
Ho Chi Minh City Customs proposed to reduce VAT

Ho Chi Minh City Customs proposed to reduce VAT

VCN - Ho Chi Minh City Customs Department proposed that the Ministry of Finance advise the Government to apply a reduction in the Value Added Tax (VAT) rate of 2% for all groups of goods and services which currently subject to the 10% VAT rate, uniform at the stages of import, production and consumption.
Limiting the "power" of major shareholders under the Law on Credit Institutions (amended)

Limiting the "power" of major shareholders under the Law on Credit Institutions (amended)

VCN - The Law on Credit Institutions (amended) has tightened the maximum ownership ratio and lending ratio to limit the influence of shareholder groups as well as minimize risks from credit concentration for banks.
VCCI proposes zero tax rate to be maintained for exported services

VCCI proposes zero tax rate to be maintained for exported services

The Vietnam Chamber of Commerce and Industry (VCCI) has proposed a zero-value added tax (VAT) rate to be maintained for exported services, over worries that tax hikes would undermine the competitiveness of Vietnamese providers against foreign rivals.
Ministry of Finance anwser voters about on-spot imports and exports

Ministry of Finance anwser voters about on-spot imports and exports

VCN - The Ministry of Finance has been collecting comments from related ministries and branches to aggregate and submit options to the government for abolishing Article 35 of Decree 08/2015/NĐ-CP. It aims to ensure the consistency and synchronism between the legal system and the reality.
Customs instructs C/O submission for imported cane sugar products

Customs instructs C/O submission for imported cane sugar products

VCN – Sugar products are allowed to apply tariff quotas when joining the WTO. The sugar products imported from ASEAN member states under Circular No. 23/2019/TT-BCT dated November 13, 2019, are required the Certificate of Origin form D.
SBV drafts regulations on a testing mechanism for Fintech

SBV drafts regulations on a testing mechanism for Fintech

VCN - To prevent risks and promote new products, services, and business models, the State Bank of Vietnam (SBV) has developed a draft Government decree stipulating a controlled testing mechanism in the banking sector.
Finance sector abolishes 40 administrative procedures

Finance sector abolishes 40 administrative procedures

VCN - The Ministry of Finance said that in the first two months of 2024, the Ministry of Finance issued four decisions announcing amendments and supplements and replacement of 21 administrative procedures; abolishing of 40 administrative procedures and issuing 10 new administrative procedures in the fields of tax and insurance.
Read More

Your care

Latest Most read
It is necessary to build a national database on cross-border trade and transport

It is necessary to build a national database on cross-border trade and transport

Build a national database on cross-border trade and transport to store and share information to facilitate cross-border trade and transport as well as improve the efficiency and effectiveness of state management.
Removing difficulties in tax exemption and refund policies for export processing enterprises

Removing difficulties in tax exemption and refund policies for export processing enterprises

VCN - The Customs agency has received many proposals from businesses about answering and guiding policies on tax exemption, import tax and VAT refund for export processing enterprises. The General Department of Customs has responded and provided instructi
Reviewing the list of scrap that is temporarily suspended from temporary import and re-export business

Reviewing the list of scrap that is temporarily suspended from temporary import and re-export business

VCN - Scrap is a sensitive item with many potential risks of environmental pollution, directly affecting human health and the ecosystem. Therefore, strict management measures are needed to avoid the risk that Vietnam become a scrap gathering country in th
New law expected to boost financial leasing

New law expected to boost financial leasing

The law, which will take effect from July 1 this year, allows financial leasing companies to establish subsidiaries to handle and exploit bad debt assets. It also states that small financial leasing deals with value under VNĐ100 million do not need to control the purpose of capital use.
5% VAT on fertilisers to create fairer market: domestic producers

5% VAT on fertilisers to create fairer market: domestic producers

The absence of VAT on fertilisers has prevented domestic producers from declaring and deducting input VAT, which leads to higher cost of domestically produced fertilisers, by an estimated 5-8 per cent, and makes them vulnerable in competition from imported fertilisers.
Mobile Version