What are regulations on the valuation of distrained assets subject to tax enforcement in Vietnam?

What are regulations on the valuation of distrained assets subject to tax enforcement in Vietnam?

Based on Clause 9, Article 35 of Decree 126/2020/ND-CP regulating enforcement by means of asset seizure and auction of seized assets, the valuation of the seized assets is carried out as follows:

- The valuation of distrained assets takes place at the headquarters of the organization, the residence of the individual subject to seizure, or the place where the assets are stored (except in cases where a Valuation Council needs to be established).

- The assets are valued through agreement between the enforcement leader and the representative of the organization, individual subject to enforcement, or joint owner.

The agreement period between the enforcement leader and the representative of the organization, individual subject to enforcement, or joint owner must not exceed 5 working days from the day of seizure. If no agreement is reached, the person with authority to issue the enforcement decision is responsible for the valuation.

- For seized assets valued at 1,000,000 VND or more, or difficult to evaluate, if an agreement on the price is not reached within 15 days from the day of seizure, the person who issued the enforcement decision proposes the establishment of a Valuation Council, in which the person who issued the enforcement decision serves as the Chairman of the Council, and representatives from the financial agency and related specialized agencies are members.

The Council must determine the value within 7 working days and decide the price based on market prices or state-regulated prices.

- The valuation must be documented clearly stating the time, location, participants involved, the name, value of the asset, and signatures of the participating valuators and the asset owner.

What is the procedure for distraining assets subject to tax enforcement in Vietnam?

Based on Clause 6, Article 35 of Decree 126/2020/ND-CP regulating the procedure for distraining assets subject to tax enforcement, the procedure is as follows:

- The seizure of assets must be conducted during official working hours applicable at the local jurisdiction where the assets are seized.

- The person who issued the enforcement decision or the person assigned to execute the enforcement decision presides over the seizure.

- When seizing the assets, the presence of the individual subject to enforcement or an adult family member, the representative of the organization whose assets are seized, a local government representative, and a witness is required. If the individual required to comply with the enforcement decision or an adult family member intentionally absents themselves, the seizure continues but must have the presence of a local government representative and a witness.

- The organization or individual subject to enforcement has the right to request which asset should be seized first. The person in charge of the seizure must accept if it is determined that the request does not affect enforcement. If the organization or individual subject to enforcement does not specifically request which asset to seize first, individually owned assets are seized first.

- Within 30 days from the date of asset seizure, if the enforced taxpayer fails to pay the tax debt in full, the tax management agency will carry out the auction of the seized assets through an authorized auction organization as prescribed by law to recover unpaid taxes.

- Only assets jointly owned with others by the individual subject to enforcement are seized if the individual does not have separate assets or the separate assets are insufficient to fulfill the enforcement decision. In case the asset is disputed, the seizure proceeds with an explanation to the joint owners of the seized asset about their right to initiate a legal action according to civil procedural law. The tax management agency is responsible for publicly notifying the time and location of the seizure so that co-owners are aware. After 3 months from the seizure date, if the co-owners do not initiate legal action, the seized asset will be auctioned as per the law regarding the auction of assets.

Which agency has the authority to decide tax enforcement in Vietnam?

According to Article 126 of the Law on Tax Administration 2019, the authority to decide tax enforcement is vested in:

- The head of the tax administration agency, the Director of the Anti-Smuggling Investigation Department under the General Department of Customs, the Director of the Post-Clearance Audit Department, who has the authority to make enforcement decisions for administrative decisions on tax management as prescribed in points a, b, c, d, đ, and e, Clause 1, Article 125 of the Law on Tax Administration 2019.

- The revocation of business registration certificates, business operation certificates, cooperative registration certificates, investment registration certificates, establishment and operation licenses, professional practice licenses as stipulated in point g, Clause 1, Article 125 of the Law on Tax Administration 2019 is executed according to the provisions of law.