Legal basis:

– Law on Tax Administration 2019

In the process of fulfilling financial obligations to the state, taxpayers are responsible for fully paying taxes, late payment interest, and fines (if any) according to regulations. However, when the payment amount is not enough to pay off all financial obligations, the order of payment of these amounts is an important issue that must be followed to ensure fairness and transparency in tax administration. Vietnamese law clearly stipulates the order of payment priority to help related parties properly fulfill their obligations.

1. Definition

Payment order is a legal regulation on prioritizing the handling of taxes, late payment interest, and fines that taxpayers must pay in cases where the payment amount is not enough to pay off these debts. Determining the correct payment order is important in protecting the interests of the state and ensuring the legal responsibilities of taxpayers.

2. Order of payment of taxes, late payment interest, and fines

Specific payment order:

1. Taxes (VAT, Corporate Income Tax, Personal Income Tax, other taxes).
2. Late payment interest (Interest arising from late tax payment).
3. Fines (Administrative fine for violating tax or financial regulations).

The order of payment of taxes, late payment interest, and fines is prescribed as follows:

• Tax debt, fines, and overdue late payment interest are subject to enforcement measures;
• Overdue tax debt, fines, and late payment interest are not subject to enforcement measures;
• Taxes, fines, and late payment fees arise.

Reasons for such priority:

• Tax is the main financial obligation of businesses and individuals to the State, and should be paid first to ensure compliance with legal regulations.
• Late payment interest is a consequence of late tax payment and must be paid immediately after tax to avoid additional costs.
• A fine is usually an amount imposed when there is a violation, so it will be paid eventually.

3. Cases where late payment interest must be paid

– Taxpayers are late in paying tax compared to the prescribed deadline, the tax payment extension deadline, the deadline stated in the tax administration agency’s notice, the deadline in the tax assessment decision or the agency’s handling decision. tax administration;

– If the taxpayer declares an additional tax declaration dossier to increase the tax amount payable, or the tax administration agency or state agency with authority to check or inspect discovers an understatement of the tax amount payable, the tax must be paid. Late payment of increased tax payable;

– The taxpayer declares an additional tax declaration dossier that reduces the refunded tax amount, or the tax administration agency or state agency with authority to check or inspect discovers that the refunded tax amount is smaller than the amount. Refunded tax must pay late payment interest for the refunded tax amount that must be recovered;

– In case the tax debt is paid in installments;

– In case of not being sanctioned for administrative violations of tax administration due to the expiration of the statute of limitations for sanctioning but the outstanding tax amount is collected;

– In case of not being sanctioned for administrative violations of tax administration for the following acts:

• Taxpayers declare incorrectly, leading to a shortfall in the amount of tax payable or an increase in the amount of tax exempted, reduced, or refunded if they have made additional tax declaration documents and voluntarily overcome the consequences;
• For exported and imported goods, taxpayers are not subject to administrative penalties for tax administration violations but still have to pay the outstanding tax amount and late payment interest;

– Agencies and organizations authorized by tax administration agencies to collect taxes that are slow to transfer tax money, late payment interest, and fines from taxpayers to the state budget must pay late payment interest for the amount of late payment according to regulations. determined.

4. Late payment interest rate and time for calculating late payment interest

The late payment interest rate is 0.03%/day calculated on the late payment tax amount

The time to calculate late payment interest is calculated continuously from the day following the date of late payment interest to the day immediately preceding the date of tax debt, tax refund, additional tax, assessed tax, tax amount. delayed transfer has been paid into the state budget.

5. Conclusion

The order of payment of taxes, late payment interest, and fines is an important legal mechanism that helps effectively manage state budget revenue and ensure that taxpayers’ financial obligations are fulfilled in accordance with regulations. To avoid legal risks, taxpayers need to clearly understand and fully fulfill their financial obligations in the prescribed order of priority. This not only demonstrates the responsibility of businesses and individuals but also contributes to maintaining a stable and transparent economic environment.

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