Penalties for late tax return submission when the return is rejected are a fairly common legal risk in practice, but accountants often overlook this during the tax settlement period, leading to rejected returns and late submissions. In reality, even if the documents are submitted on time, if the eTax system returns a "rejected" status, the business is still considered to have not fulfilled its obligations and may be penalized according to current regulations. This article, from a professional perspective and updated from relevant documents such as... Decree 125/2020/ND-CP and Circular 19/2021/TT-BTCThis will clarify the nature of the problem, the latest penalties, and provide guidance on handling, explaining, and preventing issues, helping accountants proactively control risks and protect the interests of the business.
The legal nature of a rejected declaration
To understand why penalties for late tax filing arise, accountants first need to thoroughly understand the process of receiving electronic tax returns according to Circular 19/2021/TT-BTC. A tax return file, when uploaded to the eTax portal, will go through two important filters:
Notification of application acceptance
This notification confirms that the General Department of Taxation's system has received the data file from the taxpayer. This notification only indicates the submission time, confirming that you interacted with the system within the deadline. However, this is not the final basis for confirming that you have fulfilled your tax obligations.
Notification of acceptance or rejection
Within 15 minutes to a few business days, the tax authorities will perform an automated check on:
- XML file structure format.
- Verify the accuracy of the tax identification number (TIN) and the tax period.
- The tax authority has jurisdiction to receive the application.
- Compatibility of the HTKK version being used.
If a "Not Accepted" notification is received, the application is legally considered unsubmitted. If this notification is received after the deadline for filing, the business will immediately face the risk of late tax filing penalties.
Updated penalties for late tax return filing.
In 2026, regulations on administrative penalties for tax violations will continue to be implemented according to Decree 125/2020/ND-CP with stricter controls through Big Data. Below is a summary table of penalties for late tax return submission applicable to organizations or businesses:
| Late submission period | Fine amount (VND) | Business Notes |
| Less than 5 days | Warning | Applicable when there are mitigating circumstances. |
| From 1 to 30 days | 2.000.000 – 5.000.000 | The average fine is 3,500,000 VND. |
| From 31 to 60 days | 5.000.000 – 8.000.000 | The average fine is 6,500,000 VND. |
| From 61 to 90 days | 8.000.000 – 15.000.000 | The average fine is 11,500,000 VND. |
| Over 90 days | 15.000.000 – 25.000.000 | There is an additional tax payable. |
Important Note: The penalty for individuals is half that for businesses. If tax returns are filed more than 90 days late and there is tax payable, this behavior may be considered tax evasion, increasing the penalty to 1 to 3 times the amount of tax evaded. Understanding these deadlines to avoid penalties for late tax filing is a crucial task for the chief accountant.
Reasons why the declaration was rejected, leading to a penalty.
Why do many experienced accountants still unfairly receive penalties for late tax filing? Below are common reasons compiled from tax audit experiences:
Structural errors (XML errors)
The eTax system is regularly updated to comply with guiding circulars. If an accountant submits a tax return generated from an older version of HTKK, or if the XML file has been manually tampered with, resulting in incorrect data tags, the system will return a rejection notice. By the time this is discovered, the submission deadline has passed, leading to penalties for late tax filing.
Incorrect tax authority code
Particularly for personal income tax finalization, individuals often submit their tax returns to the wrong tax authority due to incorrect identification of their place of residence or work. For businesses, when changing their registered address to a different district/province without completing the tax closing procedures or updating their tax identification number (TIN) on the national system, the submitted tax return will be immediately rejected. This is one of the main reasons why penalties for late tax finalization are issued most frequently.
The identification information does not match.
In 2026, tax data will be fully synchronized with the National Population Database. If the employee's Citizen Identification Card (CCCD) information on the personal income tax return does not match the data managed by the General Department of Taxation, the application will be suspended or rejected. Resolving this error is time-consuming and can easily lead to a period where higher penalties for late tax filing are applied.
Procedure for handling cases where a declaration is rejected after the deadline.
Accountants should follow these steps to minimize penalties for late filing of tax returns:
Step 1: Identify the cause of the "rejected" message.
Access your email or the eTax portal to download the notification "Electronic tax return rejected". Read the reason carefully. If the reason is "Tax authority infrastructure error", you have the opportunity to explain to avoid penalties for late tax filing.
Step 2: Correct and resubmit the application.
As soon as you realize there's an error in your tax return, correct it and resubmit it immediately. Based on practical experience, if the resubmission is only 1-3 days before the deadline and the business provides a reasonable explanation for the technical error, the tax authorities may consider applying the lightest penalty (warning) instead of a fine. However, if the delay is too long, a penalty for late tax filing is unavoidable.
Step 3: Prepare the explanatory document.
According to the Law on Handling Administrative Violations, if the error is due to objective factors or force majeure (such as a wide-area network failure confirmed by the provider), the business has the right to submit a letter of explanation to the managing Tax Department to request exemption or reduction of the penalty for late payment of tax returns.
Step 4: Handle late payment penalties for taxes (if any).
In addition to administrative penalties for documentation issues, accountants must calculate and pay late payment penalties for any outstanding taxes (if applicable). The formula for calculating late payment penalties applicable for 2026 is as follows:
|
Late payment penalty = Additional tax payable x 0.03% x Number of days |
The number of days of late payment is calculated continuously from the day following the last day of the tax payment deadline until the day the taxpayer pays the tax amount into the State budget.
Consequences of late tax filing.
In practice, accountants in businesses often face immense pressure from management whenever penalties for late tax filing arise. However, the actual cost to the business is far greater than the amount shown on the penalty notice, as it triggers a series of cascading consequences:
- Non-deductible expenses: The penalty for late filing of tax returns and the late payment interest of 0.03% are both expenses disallowed when settling corporate income tax. The business loses both the penalty and has to pay tax on that amount.
- Lowering business reputation score: On the General Department of Taxation's risk management system, businesses that are frequently penalized for late tax settlement will be placed on a higher-level list for periodic inspections and audits.
- Cash flow risk: Unexpected penalties can disrupt the accounting department's approved financial plan.
Risk mitigation strategy for penalties in the 2026 settlement period.
To avoid ever receiving administrative penalties for tax-related offenses, the accounting department needs to establish a rigorous internal control process:
The rule requires submitting 10 days in advance.
Accountants should aim to complete and submit corporate income tax returns before March 20th and personal income tax returns before April 20th each year. This extra 10 days is an extremely valuable buffer to handle any rejection notices from the eTax system, absolutely avoiding the risk of penalties for late tax filing.
Check your profile status after 24 hours.
After submitting and receiving notification of step 1, accountants should make it a habit to check the file status every 24 hours. Never assume that submitting the file means everything is done. Only when the file changes to the status "Tax authority has accepted the file" will the risk of late tax filing penalties be avoided.
Stay up-to-date with policy changes.
In 2026, the guiding circulars on forms and templates may change to comply with the new Personal Income Tax Law (if any). Accountants should attend training sessions organized by the tax authorities or monitor reputable specialized websites to update their knowledge of forms and templates, avoiding formatting errors that could lead to rejected applications and penalties for late tax settlement.
Conduct periodic reviews of human resources data.
Before the tax settlement period, request the HR department to provide the latest list of employees' national ID card numbers, review and update tax registration information promptly. Having clean data from the start will help tax settlement documents pass through the eTax system's filters smoothly, eliminating the risk of penalties for late tax settlement due to incorrect identification information.
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Conclude
In the context of increasingly stringent electronic tax administration, the rejection of tax returns is no longer a mere technical error but a real legal risk. Even a small mistake in format, data, or process can lead to penalties for late tax filing, resulting in unnecessary costs and damage to compliance reputation.
Therefore, instead of dealing with issues after they have occurred, accountants need to proactively take control from the outset: Submitting documents early, monitoring their status until they are accepted, and establishing a rigorous data review process. This is not only a way to minimize risk, but also a mandatory standard of a professional accounting system.
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Content is moderated by: Mr. Le Hoang Tuyen – Founder & CEO of Man, CPA Vietnam Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
