Which assets must not be distrained during the enforcement of tax decisions in Vietnam?

Which assets must not be distrained during the enforcement of tax decisions in Vietnam?

The assets that must not be distrained are stipulated in Clause 2, Article 35 of Decree 126/2020/ND-CP as follows:

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

- The sole residence of the individual and their family subject to enforcement.

- Medicine, food, and essential commodities needed for personal and family use by the individual subject to enforcement.

- General labor tools necessary for primary or sole livelihood means for the individual and their family subject to enforcement.

- Clothing and essential household items of the individual and their family subject to enforcement.

- Worship items; relics, medals, orders, and commendations.

(2) For business and production establishments:

- Medicines, equipment, tools, and assets belonging to a medical, treatment facility (except when these assets are traded for business); food, materials, and assets serving as mid-shift meals for employees.

- Kindergartens, schools, and their related equipment, vehicles, and tools, provided these are not business trade assets of the enterprise.

- Safety equipment, firefighting and environmental pollution prevention tools.

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

- Raw materials, finished products, semi-finished products that are hazardous chemicals not permitted for circulation.

- Raw materials, semi-finished products being in a closed production line.

(3) For state agencies, political organizations, socio-political organizations, professional societies (collectively referred to as agencies, organizations) operating with funds provided by the state budget, the assets purchased with the state budget are not inventoried. Instead, these agencies must request financial support from competent authorities to implement the enforcement decision.

In case agencies, organizations have legal income from other lawful activities, the assets acquired from such income are subject to inventory for enforcement, except the following assets:

- Medicines, equipment, tools, and assets belonging to a medical, treatment facility (unless these assets are traded for business); food, materials, and assets serving mid-shift meals for officials.

- Kindergartens, schools, and their related equipment, vehicles, and tools, provided these are not business trade assets of the agency, organization.

- Safety equipment, firefighting and environmental pollution prevention tools.

- Office premises.

- Infrastructure serving public interests, security, and defense.

Which assets must not be distrained during the enforcement of tax decisions in Vietnam? (Image from the Internet)

What are subjects of enforcement by distraining assets and selling distrained assets at auction in Vietnam?

According to Clause 1, Article 35 of Decree 126/2020/ND-CP, the regulation is as follows:

Enforcement by distraining assets and selling distrained assets at auction

1. Subjects to be applied

a) Enforcement by distraining assets and selling distrained assets at auction shall apply to taxpayers subject to enforcement of tax decisions if other enforcement measures stipulated in Points a, b, c, d of Clause 1, Article 125 of the Law on tax administration cannot be applied, or those measures have been applied but still fail to collect sufficient tax debt for the state budget, or in cases specified in Clause 3, Article 125 of the Law on tax administration.

Administrative decisions on tax administration include: Decisions on administrative sanctions for tax administration violations; tax assessment notices, tax assessment decisions; tax debt notices; tax refund withdrawal decisions; extension decisions; installment payment decisions; decisions to terminate the effect of tax debt deferral decisions; decisions on applying remedial measures as stipulated in laws on handling administrative violations in tax administration; compensation decisions; other administrative decisions on tax administration as stipulated by law.

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Thus, the subjects to be applied with enforcement by distraining assets and selling distrained assets at auction in tax administration are taxpayers subject to enforcement of tax decisions where:

- Deduction from the account of the person subject to administrative enforcement decisions at the State Treasury, commercial banks, other credit institutions; account freezing; (1)

- Deduction of a portion of wages or income; (2)

- Suspension of customs procedures for exported or imported goods; (3)

- Suspension of invoice usage; (4)

Or those measures (1), (2), (3), (4) have been applied but still fail to collect sufficient tax debt for the state budget, or in cases specified in Clause 3, Article 125 of the Law on tax administration 2019.

* Asset inventory is not applied in cases where the taxpayer is an individual undergoing treatment at healthcare facilities established in accordance with the law.

What are regulations on the authority for applying enforcement by distraining assets and selling distrained assets at auction in tax administration in Vietnam?

Pursuant to Clause 1, Article 126 of the Law on tax administration 2019, the regulation is as follows:

Authority to enforce administrative decisions on tax administration

1. The heads of tax authorities, the Director General of the Anti-Smuggling Investigation Department under the General Department of Customs, and the Director General of the Post-Clearance Audit Department are authorized to issue decisions on applying enforcement measures for administrative decisions on tax administration as stipulated in Points a, b, c, d, đ, and e of Clause 1, Article 125 of this Law.

2. The revocation of enterprise registration certificates, business registration certificates, cooperative registration certificates, investment registration certificates, establishment and operational licenses, and practice licenses stipulated in Point g, Clause 1, Article 125 of this Law shall be implemented according to legal regulations.

Thus, the authority to apply Enforcement by distraining assets and selling distrained assets at auction in tax administration includes the heads of tax authorities, the Director General of the Anti-Smuggling Investigation Department under the General Department of Customs, and the Director General of the Post-Clearance Audit Department.