Which entities are subject to tax enforcement by distraining assets and selling distrained assets at auction in Vietnam?

What is the tax enforcement by distraining assets and selling distrained assets at auction in Vietnam?

According to the provisions at Point e, Clause 1, Article 125 of the Tax Administration Law 2019,:

Tax enforcement measures

1. For the purposes of Articles 125 to 135, “taxpayer” means the taxpayer against whom a tax enforcement measure is taken. Tax enforcement measures include:

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

d) Deduct money from the taxpayer’ salary or income;

c) Suspend customs procedures for exports or imports;

d) Suspend use of invoices;

dd) Distraint assets and sell distrained assets at auction in accordance with law;

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

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

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Thus, distraining assets and selling distrained assets at auction as prescribed by law is one of the tax enforcement measures.

Tax enforcement means the application of measures specified in the Tax Administration Law 2019 and other relevant provisions to enforce taxpayers’ fulfillment of their tax liabilities (Clause 13, Article 3 of the Tax Administration Law 2019).

Which entities are subject to tax enforcement by distraining assets and selling distrained assets at auction in Vietnam? (Image from Internet)

Which entities are subject to tax enforcement by distraining assets and selling distrained assets at auction in Vietnam?

According to the provisions of Clause 1, Article 35 of Decree 126/2020/ND-CP:

Enforcement by distraining assets and selling distrained assets at auction

1. Enforcement subjects

 This enforcement measure will be implemented when the enforcement measures specified in Points a, b, c, d Clause 1 Article 125 of the Law on Tax Administration cannot be implemented, tax is not fully collected after these measures are implemented, or in the cases specified in Clause 3 Article 125 of the Law on Tax Administration.

Tax decisions include: decision on imposition of administrative penalties for tax offences; tax liability imposition notices and decisions; tax debt notices; refund disgorgement decisions; extension decisions; permissions for payment by instalments; decisions on invalidation of tax debt freezing decision; decisions on implementation of remedial measures in accordance with tax administration laws; decision on payment of damages; other administrative tax decisions prescribed by law.

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Thus, distraining assets and selling distrained assets at auction in Vietnam applies to taxpayers subject to the tax enforcement when the following measures cannot be applied:

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

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

- Suspend customs procedures for exports or imports; (3)

- Suspend use of invoices; (4)

Or tax is not fully collected after after such measures (1), (2), (3), (4) have been applied, or in cases specified at Clause 3, Article 125 of the Tax Administration Law 2019.

* Do not distrained assets of taxpayer that is an individual who is receiving treatment at lawful health facilities.

What are the regulations on the power to decide on tax enforcement by distraining assets and selling distrained assets at auction in Vietnam?

Under Clause 1, Article 126 of the Tax Administration Law 2019:

Power to decide tax enforcement

1. Heads of tax authorities, the Director of the Smuggling Investigation and Prevention Department of the General Department of Customs, the Director of the Post-clearance Inspection Department have the power to implement the tax enforcement measures specified in Points a, b, c, d, dd and e in Clause 1 Article 125 of this Law.

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

Thus, Heads of tax authorities, the Director of the Smuggling Investigation and Prevention Department of the General Department of Customs, the Director of the Post-clearance Inspection Department shall decide on tax enforcement by distraining assets and selling distrained assets at auction in Vietnam.