How long is the prescriptive periods for the tax enforcement by drawing money from the delinquent taxpayer’s account in Vietnam?

How long is the prescriptive periods for the tax enforcement by drawing money from the delinquent taxpayer’s account in Vietnam?

Based on Clause 1, Article 9 of Circular 215/2013/TT-BTC, the provisions are as follows:

Prescriptive periods for implementation of decision on enforcement

1. A coercive decision is effective for 01 (one) year from the date stated in the coercive decision. The prescriptive periods for coercion is indicated in the coercive decision.

Specifically, the coercive decision to debit money from the account of the coerced entity is effective for 30 (thirty) days from the date stated in the coercive decision. The prescriptive periods for coercion of 30 (thirty) days is indicated in the coercive decision.

2. During the prescriptive periods prescribed in Clause 1 of this Article, if an organization or individual subjected to coercion deliberately evades, delays, obstructs the coercion, or does not fulfill their responsibilities such as: not receiving the coercive decision, obstructing the tax authority from implementing coercive measures as specified in Article 3 of this Circular, the prescriptive periods for enforcement will be recalculated from the time these actions cease.

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Thus, the prescriptive periods for the tax enforcement by drawing money from the delinquent taxpayer’s account is 30 days from the date indicated in the coercive decision.

Prescriptive periods for the tax enforcement by drawing money from the delinquent taxpayer’s account in Vietnam (Image from the Internet)

Subjects applicable to the tax enforcement measure by drawing money from the delinquent taxpayer’s account in Vietnam?

Based on Clause 1, Article 31 of Decree 126/2020/ND-CP, the subjects applicable to the tax enforcement measure by drawing money from the delinquent taxpayer’s account are taxpayers being coerced to execute administrative decisions on tax management who have accounts at the State Treasury, commercial banks, and other credit institutions.

Thus:

- Administrative decisions on tax management include: decisions on administrative penalties for tax management violations; tax imposition notices, tax imposition decisions; tax debt notices; decisions on refund recovery; extension decisions; installment payment decisions; termination of the effectiveness of decisions on tax debt rescheduling; decisions on applying remedial measures according to the law on handling administrative violations on tax management; compensation decisions; other administrative decisions on tax management as prescribed by law.

- Subjects being coerced to implement administrative decisions on tax management include:

+ Taxpayers who fall into the cases specified in Clauses 1, 2, 3, and 4, Article 124 of The Law on Tax Administration 2019.

Where taxpayers owe state budget debts with outstanding tax amounts for which the tax authorities have issued decisions to allow installment payments, extension decisions, tax debt rescheduling decisions, or notifications on non-imposition of late payment interests, coercion is not enacted for the outstanding tax amounts during the time allowed for installment payments, extension, rescheduling, or non-imposition of late payment interests, or while the State Audit, the State Inspectorate are verifying the exact tax liabilities of the taxpayers based on the taxpayers' proposals.

+ Credit institutions failing to comply with decisions on administrative penalties for tax management violations as prescribed by The Law on Tax Administration 2019.

+ Organizations guaranteeing tax payment for taxpayers: If 90 days after the expiration of the tax debt payment period as per the acceptance document from the tax management authority, the taxpayer has not fully paid the state budget, the guarantor is coerced as prescribed by The Law on Tax Administration 2019.

+ The State Treasury, provincial State Treasury, district State Treasury (hereinafter referred to as the State Treasury) failing to debit and transfer money from the coerced taxpayer’s account opened at the State Treasury to pay the state budget according to the administrative penalty decisions on tax management by the competent authorities.

+ Related organizations and individuals failing to comply with administrative penalty decisions on tax management by competent authorities.

In cases where the coerced taxpayer is the owner of an ODA project, the account holder of ODA funds, and concessional loans at the State Treasury, credit institutions, this coercive measure is not applied.

What is the time limit for issuing a decision on tax enforcement by drawing money from the delinquent taxpayer’s account in Vietnam?

Based on Point b, Clause 3, Article 31 of Decree 126/2020/ND-CP, a tax coercion decision by drawing money from the delinquent taxpayer’s account must be issued at the following times:

- After the 90th day from the deadline for tax payment;

- Immediately after the tax payment extension period expires;

- Immediately after the taxpayer fails to comply with the decision on administrative penalties for tax management violations within the time frame specified in the penalty decision (unless a deferment or suspension of the administrative penalty decision on tax management is granted);

- On the day the taxpayer is discovered to be dispersing assets or absconding.

The behavior of dispersing assets or absconding is based on information such as: the coerced taxpayer performing procedures for transferring, giving, selling assets, releasing, dispersing account balances unusually unrelated to regular business transactions before the tax authority issues the coercion decision or leaving the registered business address.