Adapting to electronic transactions in manufacturing businesses, on March 18th, 2021, the General Department of Taxation has issued ‘Circular No.19/2021/TT-BTC’ regulating electronic transactions in the field of tax. Besides, the ‘Official Letter No. 1194/TCT-KK’ introduced the new regulations issued through this circular on April 20th, 2021, with points that should be noted by enterprises.
1. Principles of electronic transactions in Tax
Taxpayers can now choose to make electronic tax transactions via: (i) National public service portal, the main web-portal of the Ministry of Finance which has been connected to the portal of the General Department of Taxation, (ii) the web portal of other competent state agencies (except for point (i)) which have been connected to the portal of the General Department of Taxation, (iii) The electronic payment service of an intermediary payment service provider which is connected to the Portal of the General Department of Taxation. (Point 02, Article 04, Circular No.19/2021/TT-BTC)
Taxpayers (TPRs) paying tax electronically must register for electronic tax transactions according to the regulations of each agency or organization that they choose. If a taxpayer chooses to make tax payments through the National Public Service Portal, the website of the Ministry of Finance, he/she will be granted an additional account for logging-in by the General Department of Taxation to perform transactions on the website of the General Department of Taxes. This will be provided based on the information which has been provided while registering through one of these portals, relieving taxpayers from additional registration.
2. Electronic documents
Additional regulations on electronic documents include (i) confirmation of the fulfillment of tax obligations, (ii) checking tax payment information, (iii) procedures for net-off tax, late payment interest, and fine overpaid, (iv) tax exemption and tax reduction (v) exemption of late payment interest, (vi) no late payment interest, (vii) freezing money for debt forgiveness, (viii) write off tax arrears, late payment interest and fines, (ix) tax payment extension, and (x) payment of tax debt in installments. (point (a), Clause 1, Article 6- Circular 19/2021/TT-BTC)
3. Electronic transactions in registration
Taxpayers who submitted the documents through the portal for obtaining Tax Registration Certificate or Code Notice, after registering to file taxes for the first time, are no longer required to submit hardcopy documents. The file is sent in electronic format by the tax authority to the personal mobile phone number of the taxpayer or the legal representative of taxpayers who are organizations.
4. Electronic transactions in Tax payment
The new regulation removes the conditions on the implementation of electronic tax payment for the banks facilitating electronic tax payments. According to this new regulation, instead of banks and organizations providing tax payment services, intermediary payment service providers that meet the technical standards published by the ‘General Department of Taxation’ will have to send a connection request to the ‘General Department of Taxation’ as prescribed in Article 38 of ‘Circular No. 19/2021/TT-BTC’.
5. Electronic refund of tax
Circular No.19 amended the time when the tax authorities send the Notice of receipt of electronic tax refund dossiers. The tax authority sends the Notice of acceptance of tax declaration dossiers in case the taxpayer requests a refund on the tax return.
6. Electronic transactions in tax exemption and reduction
Circular No. 19 adds new regulations to electronic tax exemption and reduction. Accordingly, taxpayers can send tax exemption or reduction applications to tax authorities by the following methods: applications sent directly to the tax authority, or electronic application submitted through the one-stop-shop interconnection at the same time as administrative dossier for land management and usage). The Circular specifically stipulates the process of receiving, processing, and returning results by electronic method for application for tax exemption or reduction.
Looking at the ‘Official Letter 1194/TCT-KK’, and ‘Circular No. 19/2021/TT-BTC’, the tax authorities have gradually amended the regulations to make it more business friendly. The regulations also clearly specify the processing time taken by the tax authorities upon receipt of dossiers. Simultaneously, flexibilities have been provided in registration, declaration, payment, refund, exemption, and reduction of tax for tax authorities, and other administrative and non-business agencies that facilitate electronic transactions to enterprises. Similar flexibilities have also been provided to intermediary organizations assisting businesses in fulfilling tax obligations.