What are the regulations on the application of tax enforcement measures in Vietnam?

What are the regulations on the application of tax enforcement measures in Vietnam?

Under Clause 3, Article 125 of the Tax Administration Law 2019, the application of tax enforcement measures is carried out as follows:

- Tax authorities shall choose the following tax enforcement measures, on a case-by-case basis:

+  Extract money from the taxpayer’s account at the State Treasury, commercial bank or credit institution; freezing accounts;

+ Deduct money from the taxpayer’ salary or income;

+ Suspend customs procedures for exports or imports;

-  In the cases where any of the following tax enforcement measures cannot be applied, the next measures shall be applied:

+ Suspend use of invoices;

+ Seize the taxpayer’s assets and sell them at auction in accordance with law;

+ Confiscate the taxpayer’s money and assets that are being held by a third party;

+ Revoke the certificate of business registration, certificate of enterprise registration, cooperative registration certificate, investigation registration certificate, license for establishment and operation, practice certificates.

- In case any of the measures mentioned in Clause 1, Article 125 of the Law on Tax Administration 2019 turns out to be ineffective, the tax authority may implement the previous or the next one if possible before termination of the current measure.

What are the regulations on the application of tax enforcement measures in Vietnam? (Image from the Internet)

Will a taxpayer who fails to pay tax by the extended deadline be subject to tax enforcement in Vietnam?

Pursuant to Article 124 of the Tax Administration Law 2019:

Cases of tax enforcement

1. The taxpayer’s tax has been overdue for more than 90 days.

2. The taxpayer fails to pay tax by the extended deadline.

3. The taxpayer attempts to liquidate assets or abscond.

4. The taxpayer fails to implement the tax decision by the deadline written therein, unless it is delayed.

5. A tax decision will not be enforced for up to 12 months if the tax authority charges off the tax debt; exempts late payment interest in accordance with this Law; allows payment of outstanding tax in instalments.

Payment of tax by instalments shall be considered by the supervisory tax authority of the taxpayer on the basis of the taxpayer’s request and guarantee of a credit institution. The Minister of Finance shall specify the number of instalments and procedures for tax payment by instalments.

6. Do not enforce tax payment if the taxpayer owes customs fees and transit fees.

7. The legal representative of the enterprise against which the tax decision is enforced shall fulfill its tax liability before exiting the country and may be suspended from exit in accordance with immigration laws.

Thus, a taxpayer who fails to pay tax by the extended deadline will be subject to tax enforcement.

Who has the power to decide tax enforcement in Vietnam?

Pursuant to Article 126 of the Tax Administration Law 2019, the power to decide tax enforcement in Vietnam is stipulated as follows:

- Heads of tax authorities, the Director of the Smuggling Investigation and Prevention Department of the General Department of Customs, the Director of the Post-clearance Inspection Department have the power to implement the following tax enforcement measures:

+  Extract money from the taxpayer’s account at the State Treasury, commercial bank or credit institution; freezing accounts;

+ Deduct money from the taxpayer’ salary or income;

+ Suspend customs procedures for exports or imports;

+ Suspend use of invoices;

+ Seize the taxpayer’s assets and sell them at auction in accordance with law;

+ Confiscate the taxpayer’s money and assets that are being held by a third party;

- The revocation of the certificate of business registration, certificate of enterprise registration, cooperative registration certificate, investigation registration certificate, license for establishment and operation, practice certificateshall be carried out in accordance with regulations of law.