Circular No. 02/2004/TT-BTC guides the cancellation of tax debts for households and individual businesses with tax arrears due to objective reasons.

CIRCULAR

Guidelines for writing off tax debts for households and individuals engaged in business with tax debts due to objective reasons

business having tax arrears due to objective reasons

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Finance; implementing the guidance of the Prime Minister as stated in Official Letter No. 4474/VPCP-KTTH dated September 12, 2003 of the Office of the Government regarding the write-off of tax debts for households and individuals who have ceased business operations due to objective reasons. The Ministry of Finance hereby provides the following guidelines:

1- Implementation Scope:

1) Subjects eligible for tax debt write-off:

The subjects eligible for tax debt write-off are: Households and individuals engaged in business with tax debts from December 31, 2002 or earlier due to objective reasons such as natural disasters, unexpected accidents, relocation, demolition, illness, or engaging in prohibited industries, and who have ceased business operations since then.

Members of the household referred to above are those who share the same household registration, live together, and cohabit with the individual who has ceased business operations.

2) Types of taxes and other charges eligible for write-off:

The types of taxes and other charges eligible for write-off include:

Business Registration Tax

Value Added Tax (or Turnover Tax)

Corporate Income Tax (or Profit Tax)

Natural Resources Tax

Late payment penalties calculated on the amount of outstanding tax (if applicable)

II. Procedures for Write-off:

1) At Ward Tax Teams (hereinafter referred to as Ward Tax Teams):

Based on the subjects and scope of application for tax debt write-off as stipulated in Section I above and the records of outstanding tax debts up to December 31, 2002 of households and individuals engaged in business, the Ward Tax Teams shall conduct inspections and determine those households and individuals who meet the conditions for tax debt write-off, prepare a specific list (attached model) including: name (household or individual engaged in business), outstanding tax amount, reason for debt.

Coordinate with the Ward Tax Advisory Councils, market management boards to review again the list of households and individuals with tax debts, the amount of outstanding tax debts up to December 31, 2003, and the reasons for tax debts. For cases requiring further verification, coordinate with the Ward Tax Advisory Councils for verification.

After reviewing, the Ward Tax Teams and the Ward Tax Advisory Councils shall unify the list of households and individuals with tax debts within the scope proposed for write-off and the accompanying reasons and report to the People's Committee of the ward, commune, town for consideration and confirmation, and send to the District Tax Office for inspection and consolidation before reporting to the Provincial Tax Department.

2) At the District Tax Office:

The District Tax Office will only accept, examine, and resolve the list of proposed tax debt write-offs submitted by the Ward Tax Teams after ensuring compliance with the procedures specified in point 1 above.

Based on the list of proposed tax debt write-offs that comply with the prescribed procedures, the District Tax Office shall conduct inspections and reviews of households and individuals listed in the Ward Tax Teams' proposed write-off list. In cases where it is found that households and individuals, although no longer operating in the area of the ward, commune listed in the proposed write-off list, are currently operating in a new area within the same district, county, town, they shall be removed from the list established by the Ward Tax Teams and the number of households and the amount of tax requested to be written off for each Ward Tax Team shall be re-determined.

After reviewing, the District Tax Office shall compile a list of the number of households and individuals, the amount of tax proposed for write-off in the district, county, town (attached model) and prepare a report to be sent to the People's Committee of the district, county, town and simultaneously to the Provincial Tax Department. The report must clearly explain the number of households and individuals with tax debts up to December 31, 2002. Among them, classify the number of households and individuals with tax debts before 2000, in 2001, in 2002, and the corresponding tax amounts proposed for write-off up to each year.

3) At the Provincial Tax Department: Based on the request letter of the District Tax Office, the Provincial Tax Department shall compile and submit to the People's Committee of the province, centrally-administered city (attached model) for consideration and decision.

After the People's Committee has made a Decision, the Provincial Tax Department shall notify the results of the resolution to the District Tax Office so that the District Tax Office can implement the write-off of outstanding tax debts for households and individuals whose tax debts have been written off.

4) The write-off of tax debts for households and individuals engaged in business who have died or moved elsewhere without identifying the debt recovery subject shall still be implemented according to Clause 4, Section IV, Part B of Circular No. 32/2002/TT-BTC dated April 10, 2002 of the Ministry of Finance guiding the implementation of Decision No. 172/2001/QĐ-TTg dated November 5, 2001 of the Prime Minister on the handling of deferred tax payments, tax write-offs, and tax exemptions for enterprises and production and business establishments facing difficulties due to objective reasons.

III. Authority to Process Tax Debt Write-off:

The processing of tax debt write-off for households and individuals engaged in business as stipulated in Sections I and II above shall be decided by the People's Committee of the province, centrally-administered city.

After receiving the Decision of the People's Committee of the province, centrally-administered city, the District Tax Office and Ward Tax Teams shall be responsible for publicly announcing to inform households and individuals whose tax debts have been written off about the decision and its implementation.

IV. Implementation Organization:

Writing off tax debts for households and individuals engaged in business facing difficulties due to objective reasons demonstrates the State's concern for a portion of the population, aiming to help them improve and stabilize their lives. During the process of compiling lists and considering tax debt write-offs according to these guidelines, tax authorities at all levels must ensure close coordination with relevant agencies, organizations, and associations to ensure transparency, democracy, fair treatment, and correct policy implementation.

This Circular takes effect fifteen days after its publication in the Official Gazette. During the implementation period, if there are any issues, please reflect them to the Ministry of Finance (General Department of Taxation) for consideration and resolution.