Shall taxpayers faling to fulfill their tax liability be imposed a exit suspension from Vietnam?

Shall taxpayers faling to fulfill their tax liability be imposed a exit suspension from Vietnam?

Based on Article 66 of the 2019 Law on Tax Administration, the provisions are as follows:

Fulfillment of tax liability upon taxpayer’s exit

1. Taxpayers who are subject to coercive enforcement of administrative decisions on tax management, Vietnamese citizens exiting to reside abroad, Vietnamese citizens residing abroad, and foreigners before exiting from Vietnam must complete their tax obligations. In case of faling to fulfill tax liability, they are subject to temporary exit suspension in accordance with the laws on exit and entry.

2. Tax authorities are responsible for notifying the exit and entry management authorities about the individuals and taxpayers specified in Clause 1 of this Article.

3. The Government of Vietnam specifies the details of this Article.

Thus, in cases where taxpayers are coerced to enforce administrative decisions on tax management and fail to fulfill or inadequately fulfill their tax obligations, they will face temporary exit suspension rather than an exit ban.

Shall taxpayers faling to fulfill their tax liability be imposed a exit suspension from Vietnam? What are cases of exit suspension for faling to fulfill tax liability? (Image from the Internet)

What are cases of exit suspension for faling to fulfill tax liability in Vietnam?

According to Clause 1, Article 21 of Decree 126/2020/ND-CP, the Cases of exit suspension include:

- Individuals, or individuals who are legal representatives of taxpayers that are enterprises subject to coercive enforcement of administrative decisions on tax management, with faling to fulfill tax liability.- Vietnamese citizens exiting to reside abroad with faling to fulfill tax liability.- Vietnamese citizens residing abroad before exiting with faling to fulfill tax liability.- Foreigners before exiting from Vietnam with faling to fulfill tax liability.

Authority and procedure for imposing, extending and cancelling exit suspension for faling to fulfill tax liability in Vietnam

According to Clause 2 and Clause 3, Article 21 of Decree 126/2020/ND-CP:

* Authority to Decide on Temporary Exit Suspension, Extension, or Cancellation:

- The head of the tax authority directly managing the taxpayer is authorized to decide on temporary exit suspension based on actual conditions and tax management on the area concerning taxpayers specified in Clause 1, Article 21 of Decree 126/2020/ND-CP.- The individual authorized to decide on temporary exit suspension also has the authority to decide on extension and cancellation of temporary exit suspension.- The individual authorized to decide on temporary exit suspension is responsible for canceling the temporary exit suspension no later than 24 working hours from the time the taxpayer completes their tax obligations.

* Procedure for Implementing Temporary Exit Suspension, Extension, or Cancellation:

Step 1: After reviewing and accurately determining the tax obligations of the taxpayer, the directly managing tax authority compiles a list of individuals or individuals as legal representatives of enterprises subject to temporary exit suspension. A document is created according to Form 01/XC in Appendix 3 issued with Decree 126/2020/ND-CP and sent to the exit and entry management authority, and notified to the taxpayer for fulfilling tax obligations before exiting.

Step 2: On the same day the exit and entry management authority receives the temporary exit suspension document from the tax authority, they must implement the suspension as per regulations and post it on the electronic information portal of the exit and entry management authority.

Step 3: In case the taxpayer completes their tax obligations, the tax authority must issue a cancellation document of the temporary exit suspension within 24 working hours according to Form 02/XC in Appendix 3 issued with Decree 126/2020/ND-CP and send it to the exit and entry management authority for implementing the cancellation as per regulations.

If the taxpayer fails to fulfill their tax obligations within 30 days before the end of the temporary exit suspension period, the tax authority must send an extension document according to Form 02/XC in Appendix 3 issued with Decree 126/2020/ND-CP to the exit and entry management authority and notify the taxpayer.

* The temporary exit suspension, extension, or cancellation documents must be sent via postal service or electronically if conditions for electronic transactions are met and posted on the tax authority's electronic information portal.

If the document sent to the taxpayer via postal service is returned, and the document has been posted on the tax authority's electronic information portal, it is considered as having been sent.