Executive summaryOn 16 October 2013, in conjunction with the new amended law on Tax Administration, Vietnam released the new Decree (Decree) on penalties pertaining to tax administrative procedures. This Decree becomes effective on 15 December 2013 and applies to any violations occurring on or after the effective date, including the violations of any periodic or estimated tax payment obligations.

The Decree amends penalty amounts and periods of statute of limitations (SOL) but otherwise retains the basic concepts and framework of the prior regulations.

Detailed discussion

Applicability of the Decree
The Decree applies to the administrative violations pertaining to various taxation regimes, including Value Added Tax except for those related to exported and imported goods.

Statute of limitations
The SOL for tax procedural violations still remains at two years and five years for underpayment of tax liabilities and excess tax refund claim. These SOL periods are counted from the date the violation is committed, and are defined either as a day following the tax filing due date or the date the tax refund is issued.
In terms of the collection of the outstanding tax liabilities, a tenyear SOL will apply, counting from the date the act of violation is detected; whereas the prior regulations provided no SOL. No guidance is provided in this Decree on how to determine the date that the violation is detected, leaving some uncertainties. For taxpayers not applying for a tax registration, the SOL to collect outstanding tax liabilities is open.

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