Shall persons with tax debts over 10 million VND be suspended from exiting from Vietnam from January 1, 2025?

Which subjects will have their exit and entry suspended for failing to fulfill tax liability in Vietnam from January 1, 2025?

According to Official Dispatch 13210/BTC-TCT Download dated December 4, 2024, regarding the draft decree detailing amendments to the Law on Tax Administration from the Ministry of Finance, Clause 9, Article 6 of the amended Law on Tax Administration (referred to as Amendment Law 09) amends Clause 1, Article 66 of the Law on Tax Administration 2019 as follows:

1. Individual businesspersons, heads of household businesses, individuals who are legal representatives of enterprises, cooperatives, alliances of cooperatives facing coercive enforcement of administrative decisions regarding tax management, Vietnamese individuals leaving to settle abroad, Vietnamese settled abroad, and foreigners before exiting Vietnam must fulfill tax obligations. If the tax obligation is not fulfilled concerning the tax debt amount and debt duration beyond the threshold prescribed by the Government, they will be suspended from exiting as stipulated by the law on exit and entry. The tax management authority will notify taxpayers in advance regarding the application of exit suspension measures.

Additionally, Clause 1, Article 10 of Amendment Law 09 stipulates as follows:

1. This law takes effect from January 1, 2025, except in cases specified in Clauses 2, 3, 4, and 5 of this Article.

Thus, according to Amendment Law 09, the subjects who will be suspended from exit and entry when not fulfilling tax obligations from January 1, 2025, are:

- Individual businesspersons, heads of household businesses, individuals who are legal representatives of enterprises, cooperatives, alliances of cooperatives under coercive enforcement of administrative decisions regarding tax management.

- Individuals are Vietnamese leaving to settle abroad, Vietnamese settled abroad, and foreigners before exiting Vietnam must fulfill tax obligations.

Shall persons with tax debts over 10 million VND be suspended from exiting from Vietnam from January 1, 2025? (Image from the Internet)

Shall persons with tax debts over 10 million VND be suspended from exiting from Vietnam from January 1, 2025?

Based on Clause 1, Article 1 of the Draft Decree stipulating Clause 9, Article 6 of the amended law on securities; accounting law; independent audit law, state budget law; law on management and utilization of public assets; tax management law; personal income tax law; national reserve law; administrative violation handling law (Amendment Law 09) (hereinafter referred to as the Draft Decree) provides as follows:

Download Draft Decree

Application of debt thresholds and periods for cases of exit suspension:

1. Individual businesspersons, heads of household businesses with overdue tax debts exceeding 120 days from 10 million VND or more.

2. Individuals who are legal representatives of taxpayers who are enterprises, cooperatives, alliances of cooperatives facing coercive enforcement of administrative decisions regarding tax management with overdue tax debts exceeding 120 days from 100 million VND or more.

3. Individual businesspersons; heads of household businesses; individuals who are legal representatives of enterprises, cooperatives, alliances of cooperatives no longer operating at the registered address have not completed their tax obligations.

Thus, according to the Draft Decree, individual businesspersons, and heads of household businesses with overdue tax debts exceeding 120 days from 10 million VND or more will be suspended from exiting from January 1, 2025.

Note: The proposal that individual businesspersons with overdue tax debts exceeding 120 days from 10 million VND or more will be suspended from exiting is currently being solicited for comments by the Ministry of Finance in the Draft Decree and has not yet been officially enacted.

What are regulations on notification of exit suspension in Vietnam?

Based on Article 2 of the Draft Decree, the notification of exit suspension is expected to be implemented as follows:

- The tax management authority will notify the taxpayer as provided in Clause 1 and Clause 2, Article 1 of the Draft Decree about applying the exit suspension measure via electronic means when the taxpayer is subject to coercive enforcement of tax administrative decisions. If the electronic notification cannot be sent, the tax management authority will announce it on the tax management authority's electronic information portal.

- For taxpayers specified in Clause 3, Article 1 of the Draft Decree, the tax management authority directly managing the taxpayer will announce on the tax management authority's electronic information portal about applying the exit suspension measure.

- After 30 days from the date of notification to the taxpayer about applying the exit suspension measure via electronic means or announcement on the tax management authority's electronic information portal, if the taxpayer has not fulfilled tax obligations, the tax management authority directly managing the taxpayer will issue a document on exit suspension (Form No. 01/XC issued with Decree 126/2020/ND-CP) to the exit and entry management authority for implementing the exit suspension.