Corporate income tax (CIT) finalization is a required process to ensure clear financial records and compliance with the law. Missing the deadlines can lead to serious consequences, such as fines, late payment interest, and legal enforcement actions.
1. CIT Declaration and Payment Deadlines:
According to Article 44 of the 2019 Law on Tax Administration:
– Quarterly CIT payments: Due on the last day of the first month in the following quarter.
– Annual CIT finalization: Due on the last day of the third month after the fiscal year ends.
Under Decree 91/2022/ND-CP, tax authorities extend the deadline to the next working day if the tax filing deadline falls on a public holiday.
2. Enforcement Measures for Late Tax Payments:
2.1 Cases Subject to Enforcement:
According to Article 124 of the 2019 Law on Tax Administration, enterprises may face enforcement if they:
- Have tax debts exceeding 90 days.
- Have overdue tax despite an extension.
- Attempt to evade tax by transferring assets or fleeing.
- Fail to comply with tax penalties.
2.2 Enforcement Measures:
Under Article 125 of the 2019 Law on Tax Administration, measures include:
- Bank account garnishment: The tax authority can deduct unpaid taxes directly from an enterprise’s bank account.
- Salary or income deduction: A portion of an enterprise’s revenue may be withheld to cover outstanding tax liabilities.
- Customs clearance suspension: Companies may be temporarily barred from importing or exporting goods.
- Invoice usage suspension: Businesses may be prohibited from issuing invoices, disrupting commercial transactions.
- Asset seizure and auction: Authorities can seize and auction off assets to recover tax debts.
- License revocation: Enterprises may lose business licenses, leading to potential shutdowns.
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Tax authorities lift these enforcement measures once the taxpayer fully settles their tax obligations.
3. Late Payment Interest Calculation:
Under Article 59 of the 2019 Law on Tax Administration:
Formula: Late payment interest = Overdue tax * (Days overdue * Interest rate)
For example, if a company owes VND 150 million in CIT for Q3/2023 and pays 25 days late, tax authorities calculate the interest as:
VND 150,000,000 × (25 × 0.03%) = VND 1,125,000
4. CIT Late Payment Penalties:
According to Decree 125/2020/ND-CP, penalties for late tax declarations are as follows:
| Late duration | Penalty |
| 1-5 days late | Warning or fine of VND 2-5 million |
| 6-30 days late | Fine of VND 5-8 million |
| 31-60 days late | A fine of VND 5-8 million |
| 61+ days late | A fine of VND 8-15 million |
| Over 90 days late | A fine of up to VND 25 million |
Paying taxes on time is important to keep finances stable and follow the law.
The information provided is for reference only. For detailed advice on corporate income tax (CIT) finalization and other legal matters, please contact DNP Viet Nam Law Firm.
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