Banks are relieved of difficulties in collecting tax on letters of credit

The Tax Department (Ministry of Finance) has just sent a document to regional Tax Departments, large enterprise Tax Departments, commercial banks, and foreign bank branches in Vietnam regarding handling administrative violations and late payment of value added tax (VAT) for letters of credit (L/C).

Accordingly, the Tax Department said that it will not impose administrative penalties on cases where commercial banks self-declare and voluntarily pay the full amount of VAT payable to the state budget (NSNN) after the conclusion of the Deputy Prime Minister in Notice No. 324/VPCP-KTTH dated August 12, 2023 of the Government Office, according to the provisions of Clause 3, Article 9 of Decree No. 125/2020/ND-CP dated October 19, 2020 of the Government. Commercial banks pay late tax payment fees according to regulations.

In case commercial banks declare and pay additional VAT after the tax authority announces the decision to conduct a tax audit or tax inspection at the taxpayer's headquarters or after the tax authority discovers that the tax audit or tax inspection at the taxpayer's headquarters has not been conducted or after another competent authority discovers, no administrative penalty will be imposed for violations of the law on administrative violations in cases where the statute of limitations for administrative penalties has expired. Commercial banks must pay the full amount of tax arrears and late tax payment fees to the State budget according to regulations.

In case the statute of limitations for administrative violations is still in effect, administrative violations will be handled centrally at the Head Office. There will be no penalties for false declaration of VAT for branches of commercial banks because branches of commercial banks commit administrative violations under the authorization or under the direction and management of the Head Office.

Commercial banks must pay the full amount of tax arrears and late tax payments to the State budget as prescribed in Clause 4, Article 3 of Decree No. 118/2021/ND-CP dated December 23, 2021 of the Government regulating subjects subject to administrative sanctions.

Regarding the procedures for declaring and paying additional VAT and the statute of limitations for handling administrative violations, the Tax Department said: On November 8, 2024, the General Department of Taxation (now the Tax Department) issued Official Dispatch No. 5092/TCT-DNL guiding the collection of VAT for letter of credit activities.

The Tax Department requests that regional Tax Departments and large enterprise Tax Departments base on the provisions of tax law and Official Dispatch No. 5092/TCT-DNL mentioned above to guide and create favorable conditions for commercial banks and foreign bank branches in Vietnam to fully perform their obligations to the state budget.

Previously, on November 30, 2023, the General Department of Taxation sent an official dispatch to commercial banks and foreign bank branches in Vietnam requesting that banks have the obligation to declare and pay VAT for L/C transactions in accordance with the provisions of the Law on VAT, the Law on Credit Institutions 2010 and related laws... Accordingly, the deadline for additional declaration according to the guidance of the General Department of Taxation is understood to be from the effective date of the Law on Credit Institutions 2010 (January 2011).

According to the Banking Association, such tax declaration and payment causes many difficulties for banks. Recently, the Banking Association has sent many documents reflecting and recommending to competent authorities, requesting consideration of not collecting or imposing administrative penalties on taxes and late payment of VAT for L/C activities from 2011 to present.

(According to ANTĐ)

Source: https://baoyenbai.com.vn/12/348606/Cac-ngan-hang-duoc-go-kho-ve-viec-truy-thu-thue-thu-tin-dung.aspx