On the 30th of July, the Ministry of Finance issued the new Draft of the Law on Tax Administration for comments. Subsequent seminars have been held, including one on the 3rd of August 2018 hosted by the General Department of Taxation together with the Vietnam Tax Consultants’ Association to solicit comments and recommendations from enterprises and business associations regarding the Draft Law. The significant changes in the draft law are discussed below.
Favorable adjustments for taxpayers
At the seminar, Mr. Cao Anh Tuan, head of the Tax Revision committee, said that taxpayers would benefit from the regulations added to the draft of the Tax Administration Law. To be more specific, taxpayers will be provided with the time limit for the tax refund, the amount of tax not refunded, and upon which legal base is those amounts are non-refundable.
In addition, to facilitate the tax declaration and payment processes, the draft has added regulations on the time limit for the submission of tax documents and electronic tax payment in case of technical problems, the deadline for the submission of lump-sum tax declarations, as well as the deadline for additional tax declared and paid, and how the penalties for the delayed payment of the additional tax amount is calculated. As a result, the amended law is expected to promote transparency between taxpayers and the tax authorities.
The draft also made amendments to the personal income tax finalization deadline, for which the time limit would be 120 days from the last day of the fiscal year, which is extended one month compared to the corporate income tax finalization deadline.
Additional regulations on electronic invoices and vouchers
Followed Resolution 19/NQ-CP dated the 15th May 2018, the Government has moved forward on actions and solutions to improve the business environment and enhance economic competitiveness, and Resolution 35/NQ-CP dated the 6th June 2017 on which the Government commits itself to creating a favorable economic environment for the development of enterprises, the Ministry of Finance has drafted the Decree on electronic invoices and has been reviewed by the Government.
Based on this, the draft revision on the Tax Administration Law has added the regulations on electronic invoices and vouchers. In chapter 10 of the Draft Revision, from articles 89 to 92, detailed rules on the characteristics, creation, management, usage, applications, and database of electronic invoices and documents have been presented. It is expected that these rules will help enterprises to be less confused when they apply electronic invoices and documents in their businesses, as the current law on Tax Administration was constructed for paper-based documents only.
Regulations on e-commerce tax management
The Tax Revision committee believes that e-commerce is growing at an exponential rate globally. In Vietnam, this business model continues to develop at an accelerated rate making it a highly attractive investment opportunity for investors.
To support e-commerce activities in respect of not only facilitating taxpayers but also preventing the negative outcome of online transactions, specific rules on this new type of business must be prepared. The draft added regulations on e-commerce concerning data centres and the deployment of electronic tax declarations, electronic invoices, and online tax payments. Responsibilities of related parties of e-commerce business activities such as commercial banks, the Ministry of Industry and Trade, the Ministry of Information and Communication, the Ministry of Public Security, … with the tax authorities have also been clarified.
It is anticipated that the draft law will be submitted to the National Assembly for comment at its year-end session in October, and that the amended Law on Tax Administration will come into force on January 1, 2020.
