What are the rules for tax enforcement by confiscation of the taxpayer’s money and assets being held by a third party in Vietnam?

What are the tax enforcement measures in Vietnam?

According to Clause 1, Article 125 of the Law on Tax Administration 2019, the tax enforcement measures include:

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

(2) Deduct money from the taxpayer’ salary or income;

(3) Suspend customs procedures for exports or imports;

(4)) Suspend use of invoices;

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

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

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

Additionally, the tax enforcement measures shall be applied as follows:

- Tax authorities shall choose the measures specified in (1), (2), and (3), on a case-by-case basis;

- In the cases where any of the measures specified in (4), (5), (6), (7) cannot be applied, the next measures shall be applied;

- 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 rules for tax enforcement by confiscation of the taxpayer’s money and assets being held by a third party in Vietnam? (Image from the Internet)

What are the rules for tax enforcement by confiscation of the taxpayer’s money and assets being held by a third party in Vietnam?

According to Article 134 of the Law on Tax Administration 2019, when the tax authority discovers that the taxpayer’s money and assets that are being held by a third party, the enforcement by confiscation of the taxpayer’s money and assets that are being held by a third party is applied.

The rules for confiscation of the taxpayer’s money and assets being held by the third party are as follows:

- If the third party owes a due debt payable to the taxpayer or is holding the taxpayer’s money or assets, the third party shall pay the tax debt in lieu of the taxpayer; 

- If the taxpayer’s money or assets being held by the third party belong to secured transactions or are meant for bankruptcy process, they shall be handled in accordance with law;

- The amount paid to state budget by the third party will be considered paid on behalf of the taxpayer.

What are the responsibilities of the third party having debts or holding money or other assets of the taxpayer subject to enforcement in Vietnam?

According to Clause 3, Article 134 of the Law on Tax Administration 2019, the responsibilities of the third party having debts or holding money or other assets of the taxpayer subject to enforcement in Vietnam are as follows:

- provide the tax authority with information about the debt, money or assets of the taxpayer, including the amount or categories of assets and the condition thereof.

- not return the money or assets to the taxpayer after receiving the written request from the tax authority until the taxpayer’s liability has been fulfilled or the assets have been transferred to the tax authority for sale at auction;

- In case the tax authority’s request cannot be fulfilled, provide explanation for the tax authority within 05 working days from the receipt of the request;

- incur the taxpayer’s debt and the enforcement measures specified in Clause 1, Article 125 of the Law on Tax Administration 2019 if the tax debt is not paid by the third party on behalf of the taxpayer within 15 days from the receipt of the tax authority’s request.

Note: The tax enforcement measures stipulated in Clause 1, Article 125 of the Law on Tax Administration 2019 shall terminate when tax has been fully paid to state budget.