Penalties for Late Submission of Taxes in 2022

Both organizations and individuals are obligated to pay taxes and contribute according to state regulations. If taxes are not paid on time, organizations and individuals will be required to pay additional late tax payment penalties.

The Latest Penalties for Late Tax Payment in 2022

1. Basis for determining late tax payment

- According to Article 17, Clause 3 of the 2019 Tax Administration Law, it is the responsibility of taxpayers to pay taxes in full, on time, and at the correct location. Therefore, violations of tax payment deadlines as prescribed will be penalized.

- Therefore, determining late tax payment is based on:

+ Specified deadlines;
+ Extension deadline for tax payment;
+ Deadline indicated in the tax authority's notice;
+ Deadline in tax assessment or handling decisions by the tax authority.

2. Late tax payment penalties

According to Article 59 of the 2019 Tax Administration Law, in case of late tax payment, taxpayers will be penalized by having to pay a 'late payment fee'. The late payment fee is calculated at 0.03% per day based on the overdue tax amount.

Late tax payment penalty = Overdue tax amount x 0.03% x number of days late

Herein:

- Duration (number of days) for late payment calculation:

+ Continuous calculation from the day following the occurrence of late payment until the day immediately preceding the day the taxpayer pays the tax debt to the state budget (Article 21 Circular 80/2021/TT-BTC).
+ According to Official Letter 4384/TCT-CS dated 12/11/2021, this is also a new point regarding the determination of the late payment calculation period. The previous regulation calculated the time from the day immediately following the last day of the tax payment deadline to the day the taxpayer paid the tax amount to the state budget. Therefore, under the current regulations, the late payment calculation period is reduced by 02 days.

- Late tax payment amount: Taxpayers self-determine and pay into the state budget.

3. Example

Company X declared value-added tax (VAT) for January 2022, with an accrued tax amount of 60 million dong. The tax deadline is February 20, 2022. However, the company only paid the tax amount on February 25, 2022. Thus, the company was late in tax payment.

We see:

- Tax deadline: 20/2/2022.
- Date of late tax payment occurrence: 21/2/2022.
- The following day after the date of late tax payment occurrence is 22/2/2022 (This is the penalty day, must pay the late tax payment)
- Tax payment date is 25/2/2022 => The preceding day is 24/2/2022 (Late payment penalty is calculated up to this date)

=> Therefore, in this case, company X must pay the late tax payment penalty for 03 days (22nd, 23rd, 24th of February).

- Amount of overdue tax: 60 million dong.

=> The penalty is: 60 million x 0.03% x 3 = 54,000 dong.

4. Cases exempt from late tax payment penalties

According to Article 5 of the 2019 Tax Administration Law, in the following cases, taxpayers will not be subject to late tax payment penalties:

- Taxpayers provide goods or services paid with state budget funds but not yet paid.

The amount of tax debt not subject to late payment penalties is the total amount of tax owed to the state budget by the taxpayer but not exceeding the amount of state budget funds unpaid.

- For goods requiring analysis or appraisal, goods without prices at the time of customs declaration, late payment is not counted during the waiting period for analysis or appraisal results, or during the period without official prices.

5. Frequently Asked Questions

5.1 Which cases are exempt from late tax payment penalties?

- According to Clause 8, Article 59 of the 2019 Tax Administration Law, the following force majeure cases will be exempt from late tax payment penalties (late payment exemption):

Taxpayers suffering material damage from natural disasters, calamities, epidemics, fires, or unexpected accidents are eligible for late payment exemption.

Other force majeure cases as stipulated by the Government.

Note that these cases must prepare exemption request documents and submit them to the tax authority directly managing or the tax authority managing the state budget revenue, as regulated in Article 23 of Circular 80/2021/TT-BTC.

5.2 When will taxpayers be notified of late payment fees?

As per Article 21, Clause 2 of Circular 80/2021/TT-BTC, taxpayers with tax debts overdue for more than 30 days will receive monthly notifications from the tax authority regarding the late payment amount along with the tax debt notification.

Here is the information about late tax payment penalties that we provide to our readers. Readers are encouraged to follow and fulfill their tax obligations according to legal regulations.