Vietnam: When is the enforcement by seizure of the taxpayer’s assets and sell them at auction not applied?

Vietnam: When is the enforcement by seizure of the taxpayer’s assets and sell them at auction not applied?

According to Article 133 of the Law on Tax Administration 2019, regulations on enforcement through the seizure of assets, auctioning seized assets are as follows:

Enforcement by the measure of asset seizure, sale of seized assets by auction

1. The measure of asset seizure is not applied in cases where the taxpayer is an individual undergoing medical treatment at a healthcare facility established under legal regulations.

2. The value of the seized assets of the subject being enforced is equivalent to the amount of tax stated in the enforcement decision and the costs for organizing the enforcement execution.

3. The following assets are not subject to seizure:

a) Medicines, food, and necessities for essential needs of the subject being enforced for administrative decisions on tax management and their families;

b) Labor tools;

c) Sole residence, essential living items of the subject being enforced for administrative decisions on tax management and their families;

d) Worship items; relics, medals, decorations, certifications of merit;

đ) Assets serving national defense, security.

4. Within 30 days from the date of asset seizure, if the subject being enforced for administrative decisions on tax management does not pay the full tax debt, the tax administration authority is entitled to sell the seized assets by auction to collect the full tax debt.

5. The Government of Vietnam stipulates the details of this Article.

Thus, the measure of asset seizure is not applied in cases where the taxpayer is an individual undergoing medical treatment at a healthcare facility established under legal regulations.

Moreover, the value of the seized assets of the subject being enforced must be equivalent to the amount of tax recorded in the enforcement decision and the costs for organizing the enforcement execution.

Vietnam: When is the enforcement by seizure of the taxpayer’s assets and sell them at auction not applied? (Image from the Internet)

Which assets are not subject to seizure of the taxpayer’s assets and sell them at auction in Vietnam?

According to Clause 2, Article 35 of Decree 126/2020/ND-CP, the assets that are not subject to seizure of the taxpayer’s assets and sell them at auction are as follows:

(1) For individuals subjected to enforcement of administrative decisions on tax management:

- The sole residence of the individual and their family who is under enforcement.

- Medicines, food, and necessities serving the essential needs of the individual and their family who is under enforcement.

- Necessary ordinary labor tools used as main or sole means of subsistence for the individual and their family who is under enforcement.

- Clothing, essential living items of the individual and their family who is under enforcement.

- Worship items; relics, medals, decorations, certifications of merit.

(2) For production and business facilities:

- Medicines, means, tools, assets of healthcare facilities, except in cases these are trading circulated assets; food, tools, assets serving midday meals for workers.

- Kindergartens, schools and their equipment, means, tools if these are not business circulating assets of the enterprise.

- Equipment, means, tools ensuring labor safety, fire prevention, environmental pollution prevention.

- Infrastructure serving public interest, security, defense; imported goods directly serving security, defense; exported, imported goods serving social welfare assurance, disaster recovery, epidemic; goods imported for humanitarian aid, non-refundable aid.

- Raw materials, finished products, semi-finished products that are hazardous toxic chemicals prohibited from circulation.

- Raw materials, semi-finished products that are in a closed production line.

(3) For state agencies, political organizations, socio-political organizations, socio-professional organizations (collectively referred to as agencies, organizations) operating with state budget funds, assets purchased from the state budget are not seized but require such agencies, organizations to propose to competent authorities for financial support to execute the enforcement decision.

If the agency, organization has revenue from other lawful activities, then assets invested and purchased from such revenue can be seized to execute the enforcement decision, except for the following assets:

- Medicines, means, tools, assets of healthcare facilities, except in cases these are trading circulated assets; food, tools, assets serving midday meals for officials.

- Kindergartens, schools, equipment, means, tools if these are not circulated for business of the agency, organization.

- Equipment, means, tools ensuring labor safety, fire prevention, environmental pollution prevention.

- Official headquarters.

- Infrastructure serving public interest, security, defense.

Which subjects are subject to seizure of the taxpayer’s assets and sell them at auction in Vietnam?

According to Clause 1, Article 35 of Decree 126/2020/ND-CP, the subjects to which the enforcement by the measure of asset seizure, auctioning seized assets applies are as follows:

- Enforcement by the measure of asset seizure, auctioning seized assets applies to taxpayers who are enforced to execute administrative decisions on tax management when the enforcement measures prescribed at Points a, b, c, d, Clause 1, Article 125 of the Law on Tax Administration 2019 cannot be applied or have been applied but still could not collect the full tax debt into the state budget or fall into the cases prescribed in Clause 3, Article 125 of the Law on Tax Administration 2019.

Administrative decisions on tax management include: Decisions on sanctioning administrative violations regarding tax management; tax assessment notifications, tax assessment decisions; tax debt notifications; refund recovery decisions; extension decisions; installment payment decisions; decisions to terminate the effect of decisions to frame tax debts; decisions to apply remedial measures according to the legal regulations on handling administrative violations regarding tax management; decisions on damage compensation; other administrative decisions on tax management according to legal regulations.

- Asset seizure is not applied in cases where the taxpayer is an individual undergoing treatment at legally established healthcare facilities.