Thông tư 77/2008/TT-BTC

CIRCULAR

GUIDING THE IMPLEMENTATION OF SEVERAL MEASURES TO HANDLE OUTSTANDING TAX DEBTS

Pursuant to Article 49 of the Law on Tax Administration and Article 24 of the Government's Decree No. 85/2007/ND-CP of May 25, 2007, detailing the implementation of a number of articles of the Law on Tax Administration;

Pursuant to the Prime Minister's Decision No. 172/2001/QD-TTg of November 5, 2001, on freezing, rescheduling and writing off of tax debts and state budget remittances for enterprises and production and business establishments facing difficulties due to objective causes;

Pursuant to the Government's Decree No. 77/ 2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

In implementing the Prime Minister's direction in the Government Office's Official Letter No. 7567/VPCP-KTTH of December 31, 2007;

The Ministry of Finance guides the implementation of several measures to handle outstanding tax debts and state budget remittances (below collectively referred to as tax debts) that arose before July 1, 2007, which have not yet been remitted into the state budget, as follows:

I. EXTENSION OF TAX DEBT PAYMENT DEADLINES

1. Cases eligible for extension of tax debt payment deadlines

Extension of tax debt payment deadlines may be granted to operating enterprises that owe tax debts due to financial difficulties and business losses for three consecutive years (2005-2007), including:

a/ Enterprises that were unable to fully pay arising tax amounts on time because they had to relocate their business places out of inner cities under the planning of the Government or provincial-level People's Committee and faced losses in production and business activities during the time of relocation to new business places.

b/ Enterprises that were unable to fully pay arising tax amounts on time because of business risks and financial difficulties, such as their business partners went bankrupt, debts could not be collected, the market was lost due to policy change in importing countries, losses were incurred due to natural disasters, accidents or other force majeure reasons.

c/ Enterprises that directly signed contracts with project owners or enterprises to implement projects or works funded with state budget or the Government's ODA funds but have not yet received payments or allocations from the state budget, so had no sources for paying debts, resulting in tax debts.

d/ Enterprises that implemented infrastructure or housing or land business investment projects but have not yet been allocated or leased land by the State, or land use rights auctions have not yet been held by the State, and therefore could not clear up grounds or receive land, resulting in no sources for making payments to the state budget. Their tax debts shall be handled as follows:

-  For projects which could not be started on schedule under Clause 1, Article 37 of the Government's Decree No. 84/2007/ND-CP of May 25, 2007, because grounds could not be cleared or land had been handed over (including partial hand-over according to the land allocation schedule) but projects were not executed and competent agencies have issued decisions to recover their land, provincial-level Tax Departments shall re-determine amounts payable to the state budget suitable to the actually allocated or leased land areas. Project-implementing enterprises shall immediately pay arising tax amounts according to the notices of tax agencies.

-  For projects which were implemented behind schedule and the land use deadline has been extended by management agencies competent to allocate or lease land under Clause 2. Article 37 of Decree No. 84/2007/ND-CP of May 25,2007, and have tax debts and state budget remittances that are related to land and the transfer of land use rights, houses or infrastructure on land, they shall be considered and permitted to extend the deadline for paying tax debts corresponding to their land areas for which the land use deadline has been extended.

2. Time of extension and tax amounts eligible for payment deadline extension

- Enterprises facing financial difficulties mentioned at Points a. b and c. Clause 1 of Section

I above may be considered for extension of me deadline for fully paying tax debts for not more than one year, counting from July 1. 2007.

- Enterprises defined at Point c, Clause 1 of Section I above may be considered for extension corresponding to the time and tax debts owed due to non-receipt of state budget payments, with the extended lime not exceeding one year, counting from Jury 1,2007.

During the extended time for tax debt payment in the above-mentioned cases, fines are not imposed for the late payment of tax amounts for which the payment deadline is extended. After the extended time, if enterprises fail to fully pay tax amounts for which the payment deadline has been extended, tax agencies or customs offices shall impose fines for late payment and take coercive measures to collect tax debts in accordance with law.

3. Procedures and dossiers for extension of tax debt payment deadlines and competence to decide on such extension

a/ Procedures and dossiers for extension. including;

- A written request for extension of the deadline for paying tax debts and fines, made according to form No. 02/NOPT, issued together with the Finance Ministry's Circular No. 60/2007/TT-BTC of June 14. 200". guiding the implementation of a number of articles of the Law on Tax Administration and the Government's Decree No. 85/2007/ND-CP of May 25,2007, which details the implementation of a number of articles of the Law on Tax Administration. This written request must clearly state the reason for requesting extension, the tax and fine amounts for which extension of the payment deadline is requested, the requested extension time, the plan for tax debt payment, and a commitment to pay tax and fine amounts according to this plan.

- Documents proving the reason for requesting extension. Specifically in the following cases:

+ The financial statement of the nearest fiscal year ending before July 1, 2007 and a table of data on the tax debt as of July 1, 2007.

+ In case of meeting business risks: If business risks are caused by natural disaster, fire or accident, a written record of the extent or value of property damage made by a competent body such as the valuation council set up by the provincial-level Finance Service or a professional valuation company providing valuation services under contracts or the valuation center of the provincial-level Finance Service, is required. If business risks are caused by a bankrupt partner or a policy change in the importing country, the enterprise shall produce a proof or give explanations.

+ In case of relocation of business places at the request of a competent state agency, the decision of the competent state agency on the relocation of the enterprise's business place is required.

+ For business establishments with turnover from the implementation of projects paid from the state budget which have not yet received such payments, the evidence documents include the economic contract, a debt comparison statement and the certification of the completed work volume for which payment is accepted, made by the investor or principal contractor; documents and vouchers proving the realized turnover and the turnover amount already paid from the state budget, and documents showing the payable tax amount based on the realized turnover or completed work volume, and the tax debt.

+ For enterprises implementing investment projects to build infrastructure or houses for commercial purposes which faced difficulties: vouchers and documents showing the payable, paid and owed tax amounts; document permitting the extension of the land use deadline issued by an agency competent to allocate or lease land; and a declaration of the sale of houses and the transfer of land use rights (turnover and area), are required.

The above documents must be notarized copies or copies appended with a true copy stamp and the signature of a competent person of the enterprise.

Tax debtors shall send dossiers of request for extension of tax debt payment deadlines to tax administration agencies that directly manage them.

b/ Competence to settle and time limit for settling requests for extension of tax debt payment deadlines

Tax administration agencies that directly manage tax-owing enterprises, business establishments or individuals (below collectively referred to as tax debtors) shall receive and process dossiers of request for extension of tax debt payment deadlines according to their competence, current law and the guidance in this Circular.

Within 10 days after receiving complete dossiers, tax administration agencies shall issue replies to tax debtors. For incomplete dossiers of request for extension of tax debt payment deadlines, they shall, within 3 working days after receiving the dossiers, notify such to the tax debtors for completing the dossiers.

For tax debtors eligible for extension of tax debt payment deadlines, the head of the tax administration agencies directly managing the tax debtors shall issue a document approving the request for extension of the tax debt payment deadline (according to form No. 03/NOPT issued together with Circular No. 60/2007/TT-BTC of. June 14, 2007). If rejecting a request, the tax administration agency shall issue a written reply stating its rejection to the tax debtor (according to form No. 04/NOPT issued together wilh Circular No. 60/2007/TT-BTC of June 14,2007;

Particularly for tax debts of exports or imports for which customs declarations were registered on or before January 1, 2007, which fall into the cases guided at Point 1 of this Section, dossiers of request for extension of tax debt payment deadlines and the competence to grant such extension comply with the guidance in the Finance Ministry's Circular No. 59/2007/TT-BTC of June 14, 2007, guiding the application of import and export taxes and the tax administration of imports and exports, and documents amending, supplementing and replacing this Circular (if any).

II. HANDLING OF TAX DEBTS AND FINES OF IMPORT AND EXPORT BUSINESS ENTERPRISES

1. Exemption from retrospective collection of tax and exemption from payment of fines for late payment of tax amounts subject to retrospective collection

a/ Cases eligible and conditions for consideration of exemption from retrospective collection of tax and payment of fines:

- Tax amounts subject to retrospective collection and fines of goods lots for which customs declarations were registered with customs offices on or before October 15. 1998.

- Tax debts due to one of the following objective causes will be considered for exemption from retrospective collection and payment of fines for late payment of tax amounts subject to retrospective collection. Specifically:

+ Tax policy change (related to taxable prices and tax rates): A new tax policy was introduced after the date of registration of import declarations and had a retrospective effect; enterprises had paid tax according to customs offices' tax notices before the effective date of the new tax policy but they were later ordered by customs offices to pay tax retrospectively.

+ Customs offices' previous documents guiding the application of commodity headings and taxable prices which were unclear and untrue to the actual state of goods or were incompliant with the law on import and export taxes, and were later replaced by other documents or were adjusted. Accordingly). if recalculated, payable tax amounts were higher than those notified by customs offices and, therefore, were retrospectively collected.

+ A Commodity item with divergent assessment results or difficult to categorize. The customs office could not accurately categorize it and determine its beading when carrying out customs procedures. The enterprise was later ordered to pay tax retrospectively.

b/ A dossier of request for exemption from retrospective collection of tax and payment of fines on late payment, to be compiled by an enterprise, comprises:

+ The enterprise's written request for exemption from retrospective collection of tax and payment of fines, clearly stating the reason for exemption, and the tax amount subject to retrospective collection;

+ The declaration of the imported or exported goods subject to retrospective collection of tax;

+ The customs office's first-time tax notice;

+ The receipt of the tax amount paid according to the customs office's first-time tax notice;

+ The customs office's decision on or notice of retrospective collection of tax;

+The receipt of the tax amount retrospectively paid according to the decision on or notice of retrospective collection of tax (in case the tax amount subject to retrospective collection was paid but a fine for late payment was not yet paid);

+ The decision imposing a fine on late payment of the tax amount subject to retrospective collection;

+ The commercial contract;

+ The commercial invoice, bill of lading:

+ The assessment certificate of the assessment agency (if any).

The above papers, except the written request being the original, are copies appended with a true-copy stamp and signed by a competent representative of the enterprise.

c/ Order of and procedures for handling requests for exemption from retrospective collection of tax and payment of fines for late payment, and competence to handle these requests:

Enterprises shall send dossiers of request for exemption from retrospective collection of tax and payment of fines to provincial-level Customs Departments which carried out customs procedures for the goods lots subject to retrospective collection of tax, for examination and certification of the truthfulness of these dossiers.

Provincial-level Customs Departments shall examine dossiers against the provisions of Point la of this Section and handle them as follows:

- For cases eligible for exemption from retrospective collection of tax and payment of fines for late payment, provincial-level Customs Departments shall send official letters reporting and stating their proposals on handling these cases, together with the enterprises' dossiers, to the General Department of Customs. Such an official letter must indicate:

+ Subjective and objective causes (as mentioned above), circumstances and facts of the wrong calculation (or notification) of the payable tax amount, resulting in the retrospective collection of tax;

+ The tax amount according to the first-time notice;

+ The tax amount subject to retrospective collection:

+ The tax amount subject to retrospective collection and fines requested for exemption.

- If an enterprise's dossier is ineligible for consideration of exemption from retrospective collection of tax and payment of fines according to regulations, provincial-level Customs Departments shall issue a written reply to the enterprise, requesting the enterprise to fully pay the tax amount subject to retrospective collection and the fine for late payment of this tax amount according to regulations.

The General Department of Customs shall examine dossiers and reports sent by provincial Customs Departments before submitting them to the Ministry of Finance for decision to exempt enterprises from paying tax amounts subject to retrospective collection and related fines.

2. Writing-off of tax debts and fines for late payment of tax debts

a/ Cases eligible and conditions for consideration of writing-off of tax debts:

- Tax and fine debts of goods lots for which customs declarations were registered after October 15,1998, and through June 30,2007, which were not yet remitted to the state budget.

- Availability of objective causes, such as policy change or unclear and unspecific guidance, specifically as follows:

+ New tax policy (relating to taxable prices and tax rates) was introduced after the date of registration of import declarations and had a retrospective effect, according to which, if recalculated, payable tax amounts were lower than those notified by customs offices to enterprises.

+ Customs offices' previous documents guiding the application of commodity headings and taxable prices were unclear and untrue to the actual state of goods or were incompliant with the law on import and export taxes, then were replaced by others or adjusted according to which, if recalculated, enterprises had to pay tax retrospectively.

b/ A dossier of request for writing-off of tax debts and fines on late payment, to be compiled by an enterprise, comprises:

+ The enterprise's written request for writing-off of tax debt and fine, clearly stating the reason for the request, the reason for the wrong calculation of the payable tax amount, the notified tax amount (and fine), the accurate payable tax amount, and the tax amount and fine requested for writing-off;

+ The declaration of the imported or exported goods for which writing-off of tax debt is requested;

+ The customs office's tax notice;

+The tax administration agency's decision on retrospective collection of tax (if any):

+The decision imposing a fine on late payment of tax (if any);

+ The commercial contract;

+ The commercial invoice;

+ The assessment certificate of the assessment agency (if any);

+ A written description of the characteristics, nature and composition of the goods, supplied by the manufacturer (if any).

The above papers, except the written request being the original, are copies appended with a true-copy stamp.

c/ Order of and procedures and competence for writing off tax and fine debts:

Enterprises shall send dossiers of request for writing-off of tax debts and fines to provincial-level Customs Departments which carried out customs procedures for the goods lots for which tax is owed, for examination and certification of the truthfulness of these dossiers.

Provincial-level Customs Departments shall examine enterprises' dossiers against the provisions of Point 2a of this Section and handle them as follows:

- For enterprises eligible for writing-off of tax and fine debts according to regulations, provincial-level Customs Departments shall send official letters reporting and stating their proposals on writing-off of tax and fine debts for the enterprises, together with the enterprises' dossiers, to the General Department of Customs. Such an official letter must indicate:

+ Causes of the wrong calculation of the payable tax amount and the reason for recalculation of the tax;

+ The notified tax amount (and fine);

+ The recalculated payable tax amount:

+ The tax amount and fine requested for writing-off;

+ A certification that the enterprise is eligible for debt writing-off under the guidance at Point 2a of this Section and a commitment to take responsibility for the proposed writing-off of tax and fine debts.

- If an enterprise's dossier is ineligible for writing-off of tax and fine debts according to regulations, provincial-level Customs Departments shall issue a written reply to the enterprise.

The General Department of Customs shall examine dossiers and reports sent by provincial-level Customs Departments before submitting them to the Ministry of Finance for decision to write off debts for enterprises.

3. For eligible enterprises under Point la or 2a, which, however, submit an incomplete dossier as required at Point lb or 2b of this Section, provincial-level Customs Departments may guide them in collecting any available documents, report and propose settlement measures to the General Department of Customs for reporting to the Ministry of Finance for consideration on a case-by-case basis.

IV. ORGANIZATION OF IMPLEMENTATION

This Circular takes effect 15 days after its publication in "CONG BAO."

Other tax debts not falling into the above-guided cases shall be handled under the Law on Tax Administration and current guiding documents of the Ministry of Finance.

The General Department of Taxation, the General Department of Customs and provincial-level Tax Departments and Customs Departments shall guide, examine and handle tax debts under the guidance of this Circular.

Any problems arising in the course of implementation of this Circular should be reported to the Ministry of Finance for study and settlement.