What are principles for imposing tax enforcement measures related to tax debt payments in Vietnam?

What are tax enforcement measures in tax administration in Vietnam?

Based on Clause 1, Article 125 of the Law on Tax Administration 2019, there are 7 tax enforcement measures, including:

(1). Deducting money from the account of the entity subject to enforcement of the administrative decision on tax administration at the State Treasury, commercial banks, or other credit institutions; freezing the account;

(2). Withholding a portion of wages or income;

(3). Stopping customs procedures for export and import goods;

(4). Suspending the use of invoices;

(5). Seizing assets, auctioning seized assets according to legal regulations;

(6). Collecting money and other assets of the entity subject to enforcement of the administrative decision on tax administration held by others;

(7). Revoking the business registration certificate, business registration certificate, cooperative registration certificate, investment registration certificate, establishment and operation license, practice license.

What are principles for imposing tax enforcement measures related to tax debt payments in Vietnam? (Image from Internet)

What are principles for imposing tax enforcement measures related to tax debt payments in Vietnam?

Based on Section 1, Part B of the Process for Enforcement of tax debt Payments promulgated according to Decision 1795/QD-TCT in 2022, the principles that must be followed in the enforcement process include:

- Regarding the measures of deducting money from accounts, freezing accounts, withholding portions of wages or income, and requesting the customs authority to enforce measures by stopping customs procedures for export and import goods, the enforcement is carried out as follows:

+ The measure of deducting money from the account, freezing the account of the taxpayer applies to taxpayers with accounts at the State Treasury, commercial banks, or other credit institutions.

In the case where the taxpayer is a business or organization, but the tax authority's database lacks account information or the information is incorrect, the tax authority must verify account information to enforce.

+ The measure of withholding a portion of wages or income only applies to individual taxpayers receiving wages, salary, or income from:

++ Government agencies, organizations where individuals are on payroll;
++ Agencies, organizations where individuals have labor contracts of six months or more;
++ Agencies, organizations that pay retirement or disability benefits.

+ The measure of stopping customs procedures for export and import goods only applies when the tax authority has sufficient information and materials to confirm that the taxpayer has export or import activities, or has engaged in export or import activities at least once within the past 12 months.

+ The tax authority applies suitable and effective enforcement measures based on the taxpayer's actual situation.

- Measures d, đ, e, and g stipulated in Clause 1, Article 125 of the Law on Tax Administration 2019 must be implemented sequentially. If a measure cannot be applied, the next measure is taken.

- Enforcement decisions for each taxpayer must be issued continuously in succession.

In the case of enforcement measures d, đ, e, stipulated in Clause 1, Article 125 of the Law on Tax Administration 2019 if while applying one measure, information or conditions arise for an earlier or subsequent more effective measure, the tax authority applies the earlier or subsequent measure simultaneously to collect tax debtes for the national budget.

- During the period between when the tax authority's request for business registration certificate revocation is sent to the business registration authority and when the business registration authority decides to revoke or issues a statement, the tax authority may apply suitable enforcement measures to ensure effective tax administration.

- If the taxpayer shows signs of asset dispersal or absconding, the total amount enforced is the total amount of tax debtes.

Who has the authority to decide on the enforcement of administrative decisions on tax administration in Vietnam?

According to Article 126 of the Law on Tax Administration 2019, the authority to decide on the enforcement of administrative decisions on tax administration belongs to the Heads of tax administration authorities, the Directors of the Anti-Smuggling Investigations Department of the General Department of Customs, and the Directors of the Post-Clearance Audit Department for measures at points a, b, c, d, đ, and e of Clause 1, Article 125 of the Law on Tax Administration 2019.

For the measure of revoking business registration certificates, business registration certificates, cooperative registration certificates, investment registration certificates, establishment and operation licenses, and practice licenses stipulated at point g, Clause 1, Article 125 of the Law on Tax Administration 2019, the authority to decide on revocation belongs to the individuals authorized by law.