Key provisions of the Law on Tax Administration 2019 (Law No. 38/2019/QH14)

Key Provisions of the Law on Tax Administration 2019 (Law No. 38/2019/QH14) That Enterprises Should Take Note Of

On June 13, 2019, the National Assembly officially passed the Law on Tax Administration No. 38/2019/QH14, which replaces the Law on Tax Administration 2006 and its previous amendments and supplements. The Law took effect on July 1, 2020, marking a significant transformation in Vietnam’s tax administration practices toward greater transparency, digitalization, and enhanced taxpayer accountability.

In this article, AACC will provide a detailed analysis of the core provisions and practical implications of this Law for business operations and the accounting – tax departments.

I. Scope of Regulation and Applicable Entities

The Law on Tax Administration 2019 broadens its scope of regulation to cover not only taxes under the state budget but also other types of revenues such as fees, charges, state budget revenues from natural resources, and other payments as prescribed by law.

Applicable Entities:

• Taxpayers: Individuals, business households, and organizations—both domestic and foreign—that incur tax obligations in Vietnam.

• Tax Authorities: The General Department of Taxation, Department-level Tax Offices, and Sub-department-level Tax Offices.

• Related Organizations and Individuals: Tax agents, credit institutions, income-paying organizations, providers of e-commerce transaction platforms, and others.

II.Key Aspects of Tax Administration

1. Standardized Tax Administration Procedures

The Law provides a comprehensive framework with 10 core components of tax administration, including:

• Tax registration

• Tax declaration and tax calculation

• Tax payment and tax refund

• Tax exemption, reduction, and non-collection

• Tax debt management

• Enforcement of tax obligations

• Tax inspection and audit

• Handling of violations and resolution of complaints and denunciations

• Management of invoices and supporting documents

• Application of information technology in tax administration

A noteworthy highlight is the complete digitalization of the tax administration process through the e-Tax portal and the mandatory adoption of e-invoices starting from 2022.

2. Tax Declaration and Filing Deadlines

Failure to comply with the deadlines will be subject to penalties in accordance with Decree No. 125/2020/ND-CP.

3. Electronic Invoices and Document Management

The law mandates the use of tax authority-verified electronic invoices for most businesses and large-scale business households. This requires:

• Businesses need to standardize the invoice issuance process, register for the use of tax authority codes, and integrate compatible accounting software – ERP systems.

• Increased transparency and the ability to trace invoices during tax inspections and audits.

4. Regulations on Tax Refunds, Tax Exemption and Reduction, and Tax Debt Enforcement

The law specifies in detail the following cases:

• Tax Refunds (e.g., VAT refund for exported goods, investments, ODA projects, etc.)

• Tax Exemption/Reduction in situations of force majeure (natural disasters, epidemics, fires, etc.)

• Tax Debt Enforcement through measures such as: account deduction, asset seizure, suspension of customs procedures, etc.

This requires the accounting and tax departments to closely monitor and update promptly to avoid unnecessary costs.

III. Key Highlights to Note

• Responsibilities of Income-Paying Organizations: They must correctly withhold and declare Personal Income Tax (PIT) and are jointly liable for any errors made in the process.

• Digital Transformation: The use of digital signatures, electronic accounting software, and electronic invoices is a mandatory trend, no longer optional.

• The Law’s Preventive and Transparency Nature: The tax authority has the right to collect data from banks and intermediaries to verify tax risks.

IV. What Should Businesses Do to Comply with the 2019 Tax Administration Law?

1. Train the accounting and tax team to understand the new regulations clearly.

2. Apply accounting software and electronic invoices in compliance with the required standards.

3. Develop an annual tax plan and manage tax risks clearly.

4. Proactively review and audit tax records on a regular basis.

5. Collaborate with professional tax advisory firms to stay updated and handle complex situations.

📞 Contact Tax Advisory Experts at AACC

With a team of tax and finance professionals holding CPA, APC, Tax Agent certifications, and over 22 years of experience, AACC Accounting Services proudly offers:

• Tax strategy consulting & tax planning

• Tax declaration, finalization, and refund services

• Tax and accounting record review and audit support

• Establishment of accounting systems and electronic invoices