When is a taxpayer subject to enforcement by deduction of money from salary or income in Vietnam?

When is a taxpayer subject to enforcement by deduction of money from salary or income in Vietnam?

Based on Article 130 of the Law on Tax Administration 2019, regulations are as follows:

Enforcement by deduction of money from the taxpayer’ salary or income

1. The measure of deducting part of salary or income applies to taxpayers coerced to implement tax enforcement decisions who are working under official payroll or contracts of 6 months or more, or receiving pension, or loss of working capacity allowances.

2. The deduction rate of salary, pension, or loss of working capacity allowances for individuals is not less than 10% and not more than 30% of the individual’s total monthly salary, pension; for other income items, the deduction rate is based on actual income, but not exceeding 50% of total income.

3. The agency or organization managing the salary or income of the entity subject to coercion has the following responsibilities:

a) Deduct part of the salary or income of the entity coerced to enforce the tax enforcement decision and transfer the deducted amount to the state budget account at the State Treasury as stated in the coercion decision from the nearest salary or income payment period until the full deduction of debt tax amount as per the coercion decision, meanwhile notifying the decision issuer and the coerced entity;

b) In case the full amount of tax debt has not been deducted according to the coercion decision and the labor contract of the entity ends, the labor management agency or organization must inform the decision issuer within 5 working days from the contract termination date;

c) The agency or organization managing the salary or income of the entity subject to coercion against tax enforcement decisions intentionally fails to implement the coercion decision as stipulated in this Law will be administratively sanctioned under Chapter XV.

4. the Government of Vietnam details this Article.

The measure of deducting part of salary or income is applied when a taxpayer is coerced to enforce an tax enforcement decision while working under official payroll or contracts of 6 months or more, or receiving pension or loss of working capacity allowances.

The deduction rate of salary, pension, or loss of working capacity allowances for an individual is not less than 10% and not more than 30% of the individual's total monthly salary, pension; for other income items, the deduction rate is based on actual income, but not exceeding 50% of total income.

When is a taxpayer subject to enforcement by deduction of money from salary or income in Vietnam? (Image from the Internet)

When is the enforcement of tax enforcement decisions applied in Vietnam?

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

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

- Taxpayers with tax debts when the extended payment period ends.

- Taxpayers with tax debts conducting asset dispersion or absconding.

- Taxpayers failing to comply with administrative penalty decisions on tax management by the deadline specified in the administrative penalty decision on tax management, unless there is a postponement or temporary suspension.

- Not implementing coercive tax measures for cases where taxpayers are granted debt rescheduling by the tax management authority within the debt rescheduling period; non-calculation of late payment interest as stipulated in the Law on Tax Administration 2019; allowed installment payments of tax debt not exceeding 12 months from the start of the coercive tax period.

The installment payment of tax debt is considered by the direct tax management head based on the taxpayer's request and must be guaranteed by a credit institution. The Minister of Finance stipulates the number of installments and the procedures for tax debt installment payments.

- Not imposing enforcements on taxpayers with customs fees and goods transit fees overdue.

- Individuals representing legally for taxpayers must complete the tax payment obligations of entities subject to enforcement before departure and may be temporarily suspended from exiting as per the legal regulations on entry and exit.

What is the authority to decide tax enforcement in Vietnam?

Based on Article 126 of the Law on Tax Administration 2019, it is prescribed as follows:

Authority to decide tax enforcement

1. Heads of tax authorities, Directors of the Anti-Smuggling Investigation Department under the General Department of Customs, Directors of the Post-Clearance Audit Department have the authority to issue decisions applying enforcements for tax enforcement decisions as stipulated in Points a, b, c, d, d, and e of Clause 1, Article 125 of this Law.

2. The revocation of business registration certificates, business registration certificates, cooperative registration certificates, investment registration certificates, establishment and operation permits, practicing licenses stipulated at Point g, Clause 1, Article 125 of this Law is conducted

Heads of tax authorities, Directors of the Anti-Smuggling Investigation Department under the General Department of Customs, Directors of the Post-Clearance Audit Department have the authority to issue decisions applying enforcements for tax enforcement decisions in accordance with the enforcements stipulated in tax enforcement decisions.