When is the enforcement by seizure of the assets not applicable to taxpayers in Vietnam?

When is the enforcement by seizure of the assets not applicable to taxpayers in Vietnam?

Based on Clause 1, Article 133 of the Law on Tax Administration 2019, which regulates enforcement by seizure of the taxpayer’s assets and sell them at auction, the provisions are as follows:

Enforcement by seizure of the taxpayer’s assets and sell them at auction

1. The enforcement by seizure of the assets shall not be applied in the case where the taxpayer is an individual undergoing treatment at a medical facility established in accordance with the law.

2. The value of the assets sequestered from the coerced entity is equivalent to the tax amount stated in the coercive decision and the costs for organizing the enforcement of the coercive measure.

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The enforcement by seizure of the assets is not applied to taxpayers when the taxpayer is an individual undergoing treatment at a medical facility established in accordance with the law.

When is the enforcement by seizure of the assets not applicable to taxpayers in Vietnam? (Image from the Internet)

Who has the authority to decide on the application of enforcement by seizure of the taxpayer’s assets?

According to Clause 1, Article 126 of the Law on Tax Administration 2019, which regulates the authority to decide on tax enforcement, the provisions are as follows:

Article 126. Authority to Decide on tax enforcement

1. The heads of tax administration agencies, the Director of the Anti-smuggling Investigation Bureau under the General Department of Customs, and the Director of the Post-clearance Audit Department have the authority to issue decisions applying coercive measures to enforce administrative decisions regarding tax management as stipulated in Points a, b, c, d, đ, and e, Clause 1, Article 125 of this Law.

2. The revocation of the enterprise registration certificate, business registration certificate, cooperative registration certificate, investment registration certificate, license of establishment and operation, practice license as provided in Point g, Clause 1, Article 125 of this Law shall be carried out in accordance with the law.

The heads of tax administration agencies, the Director of the Anti-smuggling Investigation Bureau under the General Department of Customs, and the Director of the Post-clearance Audit Department have the authority to decide on the application of enforcement by seizure of the taxpayer’s assets.

What types of assets are not subject to enforcement by seizure of the taxpayer’s assets in Vietnam?

Based on Clause 2, Article 35 of Decree 126/2020/ND-CP, which defines the types of assets not subject to enforcement by seizure of the taxpayer’s assets, the provisions are as follows:

(1) For individuals subject to enforcement of administrative decisions regarding tax management:

- The only house of the individual and their family who are coerced.

- Medicines, food, and essential supplies for the individual and their family who are coerced.

- Necessary ordinary labor tools used as the primary or sole means of livelihood for the individual and their family who are coerced.

- Clothing, essential living items for the individual and their family who are coerced.

- Worship items; relics, medals, badges, commendations.

(2) For production and business establishments:

- Medicines, equipment, tools, assets belonging to medical facilities, except where these are circulating assets for business purposes; food, supplies, assets serving mid-shift meals for employees.

- Kindergartens, schools, and equipment, means, items belonging to these establishments unless they are circulating assets for business purposes of the enterprise.

- Equipment, means, tools ensuring safety, fire/explosion prevention, environmental protection.

- Infrastructure serving public interests, security, national defense; imported goods directly serving security, national defense; imported/exported goods for ensuring social welfare, disaster, calamity, epidemic mitigation; imported/exported goods for humanitarian aid, non-refundable aid.

- Hazardous toxic chemicals that are not allowed to circulate.

- Raw materials, finished products, semi-finished products currently in closed production chains.

(3) For state agencies, political organizations, socio-political organizations, and professional social organizations (collectively referred to as agencies/organizations) operating with funds allocated by the state budget, no sequestration of assets procured from state budget sources is allowed but requires the agency/organization to submit a written request to the competent authority for financial support to enforce the coercive decision.

In cases where the agency/organization generates revenue from other legitimate activities, assets procured from those revenues are sequestered to enforce the coercive decision, except for the following assets:

- Medicines, equipment, tools, assets belonging to medical facilities, except where these are circulating assets for business purposes; food, supplies, assets serving mid-shift meals for officials.

- Kindergartens, schools, equipment, means, items belonging to these establishments unless they are circulating assets for business purposes of the agency/organization.

- Equipment, means, tools ensuring occupational safety, fire/explosion prevention, and environmental protection.

- Office headquarters.

- Infrastructure serving public interests, security, national defense.