To: Provincial Departments of Taxation

Covid-19 pandemic is developing in an unpredictable manner. Enterprises affected by this disease are facing loss and difficulties in production and sale of their goods and services, thus unable to pay tax on schedule.

In order to assist taxpayers affected by Covid-19 in stabilizing their business operation and overcoming this difficult time, General Department of Taxation hereby request Directors of Provincial Departments of Taxation to consider granting tax deferral and exemption late payment interest for taxpayers in accordance with the Law on Tax administration and its instructional documents. To be specific:

1. Tax deferral

1.1. Cases of tax deferral

Clause 1 Article 31 of Circular no. 156/2013/TT-BTC dated 06/11/2013 of the Ministry of Finance (consolidated by document No. 14/VBHN-BTC dated 15/5/2017) specifies the cases of tax deferral as follows:

“a) Property damage caused by natural disasters, conflagrations, or accidents that affects the business operation.

Property damage means damage to the taxpayer’s property that can be measured by money, such as: machinery, equipment, supplies, goods, buildings, cash, and valuable papers.

Accidents are the unexpected incidents due to external causes that affect the taxpayer’s business operation and not violations of law. Accidents include: road accidents, occupational accidents; having a fatal disease; having a contagious disease during the time and in the area affected by an epidemic as declared by a competent authorities; other force majeure events;

1.2. Application and procedures for tax deferral

Clause 3 Article 31 of Circular 156/2013/TT-BTC:

In order to be granted tax deferral as prescribed in Point a Clause 1 of the Circular, the taxpayer shall submit an application to the supervisory tax authority. The application shall consist of:

“- Application form no. 01/GHAN enclosed with this Circular;

- A property damage assessment record prepared by the taxpayer or the taxpayer’s legal representative;

- A document confirming that the taxpayer incurs damage caused by the natural disaster, conflagration or accident and duration thereof issued by one of the following agencies: police authority; the People’s Committee of the commune; management board of the industrial zone, export processing zone or economic zone in which the natural disaster, conflagration or accident occurs, or a rescue organization;

- An authenticated copy of the indemnity claim approved by the insurer; an authenticated copy the documents specifying the responsibility to provide indemnity. If the taxpayer is a juridical person, the aforementioned documents shall be original copies or copies bearing the signature of the taxpayer’s legal representative."

1.3. Authority to decide tax deferral

Point a Clause 5 Article 31 of Circular 156/2013/TT-BTC:

“a) The supervisory tax authorities of taxpayers shall decide the amount of tax deferred and duration of tax deferral in the cases specified in Point a, Point b, Point c Clause 1 of this Article.”

2. Exemption of late payment interest

2.1. Cases of exemption of late payment interest

Clause 1 Article 35 of Circular 156/2013/TT-BTC:

“1. In case of a natural disaster, conflagration, accident, epidemic, fatal disease or force majeure event, a taxpayer that has to pay late payment interest as prescribed in Article 34 of this Circular may apply for exemption of late payment interest."

2.2. Application for exemption of late payment interest

Clause 3 Article 35 of Circular 156/2013/TT-BTC:

“a) A written request for exemption made by the taxpayer, specifying the name, TIN, address of the taxpayer, basis for exemption, and amount of late payment interest being exempt;

b) The following additional documents must be provided on a case-by-case basis:

b.1) In case of a natural disaster, conflagration, accident or epidemic:

- A property damage assessment record issued by a competent authorities such as the Valuation Council established by the Provincial Department of Finance, a professional valuation company that provides valuation services under contracts, or the Valuation Center of the Provincial Department of Finance;

- A written confirmation that the taxpayer suffers from damage caused by the natural disaster, conflagration or accident and the occurrence time issued by the police authority of the commune, the People’s Committee of the commune, the management board of the industrial zone, export-processing zone or economic zone where the natural disaster, accident or epidemic occurs, or a rescue service agency;

- The indemnity claim approved by the insurer (if any);

- Documents specifying the responsibilities of the entities responsible for providing indemnity (if any).”

2.3. Authority to decide exemption of late payment interest

Clause 4 Article 35 of Circular 156/2013/TT-BTC:

“4. The head of the tax authority that issued the late payment interest notice is entitled to issue a decision on exemption of late payment interest (form no. 01/MTCN enclosed herewith) in the said notice.”

3. General Department of Taxation hereby requests Provincial Departments of Taxation to:

3.1. Disseminate regulations of the Law on Tax administration on tax deferral and exemption of late payment interest in order for taxpayers in their provinces to prepare and submit applications to tax authorities in a timely manner.

3.2. Set up a system for assisting and instructing taxpayers affected by Covid-19 to prepare applications and follow procedures for tax deferral and exemption of late payment interest in accordance with the Law on Tax administration and its instructional documents.

3.3. Report the cases beyond their jurisdiction to General Department of Taxation or competent authorities.

For your reference and compliance./.