Is the taxpayer subjected to tax enforcement if the tax authority has deferred the tax debt within the debt deferral period in Vietnam?

Is the taxpayer subjected to tax enforcement if the tax authority has deferred the tax debt within the debt deferral period in Vietnam?

Based on the provisions of Clause 5, Article 124 of the Law on Tax Administration 2019 regarding cases subject to tax enforcement on tax management as follows:

Cases subject to tax enforcement on tax management

1. Taxpayers with tax debts exceeding 90 days from the deadline for payment as stipulated.

2. Taxpayers with tax debts beyond the extension period of tax payment.

3. Taxpayers with tax debts who have dispersed assets or fled.

4. Taxpayers who do not comply with administrative penalties for tax management within the time limit stated in the administrative penalty decision for tax management, except in cases where execution is postponed or suspended.

5. No tax enforcement measures will be executed for cases where the taxpayer is granted a deferral by the tax authority; no late payment interest will be calculated as per the provisions of this Law; the tax debt can be paid in installments within the period, but not exceeding 12 months from the start of the tax enforcement period.

The installment payment of tax debt is considered by the head of the direct management agency of the taxpayer based on the taxpayer's proposal and must be guaranteed by a credit institution. The Minister of Finance stipulates the number of installments and the dossier, procedures for installment payment of tax debt.

6. No enforcement measures will be applied to taxpayers with overdue customs fees and transit vehicle charges.

7. Individuals who are legal representatives of the taxpayer must fulfill the tax obligations of enterprises subject to tax enforcement on tax management before leaving the country, and may have their exit delayed according to the laws on exit and entry.

Thus, in cases where the taxpayer is granted a deferral by the tax authority, no tax enforcement measures will be executed during the debt deferral period.

Is the taxpayer subjected to tax enforcement if the tax authority has deferred the tax debt within the debt deferral period in Vietnam? (Image from the Internet)

What happens if tax administrative offences are liable to criminal prosecution in Vietnam?

Pursuant to Article 136 of the Law on Tax Administration 2019, there are 7 principles for administrative penalties for tax administrative offences:

[1] Administrative penalties for tax administrative offences are implemented according to legal provisions on tax management and administrative violation handling laws.

[2] Administrative violations regarding illegal use of invoices, non-compliant use of invoices, leading to tax deficiency or evasion, will not be penalized for invoice violations but for tax administrative offences.

[3] The maximum monetary fine for acts of incorrect declaration leading to deficiency in payable tax amounts, or increase in exempt, reduced, refunded, or not collected tax is regulated by this Law.

[4] For the same administrative violation on tax management, the monetary fine for organizations is twice that for individuals, except for incorrect declaration acts leading to tax deficiencies or increased exempt, reduced, refunded, not collected tax, or tax evasion.

[5] In cases where taxpayers are tax assessed under Articles 50 and 52 of this Law, depending on the nature and severity of the act, administrative penalties on tax management may apply as per this Law.

[6] Authorized officials discovering administrative violations on tax management must document the violations as required.

In cases where taxpayers submit taxpayer registration, tax declaration documents, or electronic tax settlement, if electronic reception notices clearly identify tax management administrative violations, such notices serve as administrative violation documentation for penalty decision-making.

[7] If tax administrative offences warrant criminal prosecution, actions will proceed according to criminal law provisions.

Thus, there are 7 principles for handling administrative penalties for tax administrative offences, including cases where violations warrant criminal prosecution, which will follow criminal law provisions.

What is the time limit for imposition of penalties on tax administrative offences in Vietnam?

Based on Article 137 of the Law on Tax Administration 2019, the time limit for imposition of administrative penalties on tax management is defined as follows:

- For violations of tax procedures, the time limit for imposition of penalties is 2 years from the date of the violation.

- For tax evasion acts that do not warrant criminal prosecution, incorrect declarations leading to a deficiency in payable tax amounts, or increased exempt, reduced, refunded, not collected tax, the statute of limitations is 5 years from the date of the violation.

- Beyond the time limit for imposition of administrative penalties, taxpayers are not fined but must pay the deficient tax amount, evaded tax, incorrectly exempt, reduced, refunded, not collected tax, and late payment interest to the state budget for up to 10 years retrospectively from the date of violation discovery.

For taxpayers failing to register, the obligation is to pay the full deficient tax amount, evaded tax, and late payment interest retrospectively for the entire period from the date of violation discovery.

Thus, according to regulations, the time limit for imposition of penalties on tax administrative offences is 2 years from the date of the violation.