What is the time limit for implementation of decision on enforcement in Vietnam?

Time limit for implementation of decision on enforcement in Vietnam

Pursuant to Article 9 of Circular 215/2013/TT-BTC as amended by Clause 3 Article 1 of Circular 87/2018/TT-BTC, the Time limit for implementation of decision on enforcement is stipulated as follows:

Time Limit for Execution of Enforcement Decision

1. An enforcement decision is effective for a period of 01 (one) year from the date indicated in the enforcement decision. The time limit for applying the enforcement is stated in the enforcement decision.

Specifically, an enforcement decision by the measure of deducting money from the account of the enforced subject is effective for a period of 30 (thirty) days from the date indicated in the enforcement decision. The time limit for applying enforcement is 30 (thirty) days and is stated in the enforcement decision.

2. Within the time limit specified in Clause 1 of this Article, if the organization or individual subjected to enforcement deliberately evades, delays, or obstructs the enforcement, or fails to fulfill their responsibilities such as: refusing to receive the enforcement decision, obstructing the tax authority from implementing enforcement measures as prescribed in Article 3 of this Circular, the time limit for execution is recalculated from the time the acts cease.

3. The enforcement decision expires when the enforced subject has complied with the administrative penalty decision on tax violations or has paid full due taxes, fines, late tax payment, and late fine payment required into the state budget, or when the outstanding taxes, fines, late tax payment, and late fine payment are deferred or allowed for gradual payment or are exempted from late payment.

The basis for the termination of the enforcement decision's effect is the proof of full payment of taxes, fines, late tax payment, and late fine payment into the state budget by the enforced subject, or the tax deferral decision, or the decision for gradual payment of the outstanding tax, or the notice of no late payment fee.

Thus, the Time limit for implementation of decision on enforcement is 01 (one) year from the date indicated in the enforcement decision.

For enforcement decisions by the measure of deducting money from the account, the time limit is 30 (thirty) days from the date indicated in the enforcement decision.

If the organization or individual subjected to enforcement deliberately evades, delays, or obstructs the enforcement, failing to fulfill their responsibilities, the time limit for execution is recalculated from the time the obstructive acts cease.

Time limit for implementation of decision on enforcement in Vietnam (Image from the Internet)

What are cases of tax enforcement in Vietnam?

According to Article 124 of the Law on Tax Administration 2019, the cases subject to tax enforcement include:

- Taxpayers with tax debts exceeding 90 days from the due date as prescribed.

- Taxpayers with tax debts when the extension of the tax payment period expires.

- Taxpayers with tax debts who disperse their assets or abscond.

- Taxpayers who do not comply with administrative penalty decisions on tax administration within the time specified in the penalty decision, except for cases of deferral or suspension of penalty execution.

- No tax enforcement measures are applied to cases where the taxpayer is permitted by the tax administration agency to defer tax debts within the deferral period; no late payment fines are calculated as stipulated by the Law on Tax Administration 2019; gradual payment of tax debts within a period not exceeding 12 months from the start date of the tax enforcement period.

The direct tax administration head considers the taxpayer’s request and must obtain a credit organization's guarantee to allow the gradual payment of tax debts. The Minister of Finance stipulates the number of gradual payments, and the filing, and procedures for gradual payment of tax debts.

- No enforcement measures are applied to taxpayers with customs fees and transit vehicle fees.

- Individuals who are legal representatives of the taxpayer must fulfill the taxpayer's tax payment obligations before departing the country and can be subject to temporary exit bans as prescribed by law on exit and entry.

What are the regulations on tax enforcement costs in Vietnam?

Pursuant to Article 10 of Circular 215/2013/TT-BTC stipulating tax enforcement costs as follows:

(1). Determining enforcement costs

- Enforcement costs are determined based on actual expenses incurred during the execution of the enforcement decision in line with local pricing.

- Enforcement costs include: costs for mobilizing people to execute the enforcement decision; remuneration for valuation experts to organize auctions, costs for organizing asset auctions; costs for disassembling and transporting objects, assets; costs for renting storage or guarding seized assets; and other actual costs (if any).

(2). Cost standard

The Director-General of the General Department of Taxation, based on state standards, policies, and the nature of enforcement activities, issues spending norms for the execution of tax enforcement decisions per regulations.

(3). Payment of enforcement costs

- The subject to enforcement bears all costs for tax enforcement activities.

- The subject to enforcement is responsible for paying the entire enforcement costs to the enforcing organization as notified by the organization.

- If the enforced subject does not voluntarily pay or does not fully pay or does not pay on time as notified, the authority issuing the enforcement decision may issue an enforcement decision to recover enforcement costs by measures specified in Clause 1 Article 3 of Circular 215/2013/TT-BTC.

(4). Advance and repayment of enforcement costs

- Advance of enforcement costs

Before organizing tax enforcement, the enforcement organization must submit a tax enforcement plan and an enforcement cost estimate to the head of the agency issuing the enforcement decision for approval.

The cost estimate for enforcement is prepared according to Clauses 1 and 2 Article 10 of Circular 215/2013/TT-BTC. The approved cost estimate must be sent to the subject of enforcement along with the tax enforcement decision.

Based on the approved enforcement plan, the enforcement organization processes an advance for enforcement activities from the budget allocated to the executing agency by the state budget.

In cases of enforcement according to Article 17 of Circular 215/2013/TT-BTC, the average actual cost of previously executed tax enforcement decisions is applied.

- Repayment of advance enforcement costs

Upon completion of the enforcement decision, the enforcement organization submits the cost settlement for approval to the head of the agency issuing the enforcement decision.

Based on the approved enforcement cost settlement and the remaining processed asset value after full tax, fine, late payment fees are paid into the state budget, the enforcement organization notifies the subject to pay the remaining costs in writing (the document specifies the date, amount, payment address either in cash or account number if paying by transfer, and other necessary information).

Once the enforced subject fully pays the amount according to the approved settlement, the enforcement organization immediately processes the repayment of the previously advanced enforcement costs to the executing agency per regulations.

The executing agency is responsible for monitoring and urging the subjects liable for enforcement costs to recover the advanced costs.

- At the end of each quarter and year, the executing agency compiles a report on the use of advanced funds for enforcement (amount advanced, amount recovered, unrecovered amount, reasons for not recovering) to the superior management agency. The General Department of Taxation submits a consolidated report to the Ministry of Finance along with the annual budget settlement report.

(5). Preparing, implementing, and settling enforcement cost estimates

The preparation, implementation, and settlement of enforcement cost estimates comply with the provisions of the Law on State Budget 2015 and related guiding documents.