Which entities are subject to tax enforcement by suspension of the use of invoices in Vietnam?

Which entities are subject to tax enforcement by suspension of the use of invoices in Vietnam?

Under Clause 1, Article 125 of the Tax Administration Law 2019, suspension of the use of invoices is one of the tax enforcement measures.

According to Clause 1, Article 34 of Decree 126/2020/ND-CP, suspension of the use of invoices is applied to taxpayers subject to tax enforcement when other enforcement measures specified at Points a, b, c, Clause 1, Article 125 of the Tax Administration Law 2019 cannot be applied, or tax is not fully collected after these measures are implemented, or in cases as stipulated in Clause 3, Article 125 of the Tax Administration Law 2019, or at the request of the customs authority.

Which entities are subject to tax enforcement by suspension of the use of invoices in Vietnam? (Image from the Internet)

What are the procedures for tax enforcement by suspension of the use of invoices in Vietnam?

Under Clause 4, Article 34 of Decree 126/2020/ND-CP, the procedures for tax enforcement by suspension of the use of invoices in Vietnam are as follows:

- The tax authority shall post the decision and the invoice suspension notice on the website of tax authorities or the media within 24 hours after the enforcement decision is issued.

- During the effective period of the enforcement decision, the tax authority shall not receive notice of invoice issuance from the taxpayer against whom tax is enforced; issue electronic invoice numbers; issue or sell invoices to the taxpayer against whom tax is enforced (except the case in Point d Clause 4 of Article 34 of Decree 126/2020/ND-CP).

- The tax authority shall issue the decision on termination of this enforcement measure and the notice of invoice use resumption according to Form No. 04-2/CC in Appendix III hereof. This decision shall be posted on the website of tax authorities or the media within 24 hours after it is issued.

- In case the taxpayer submits a written request for permission to use invoices to pay employees and costs that are necessary for continuous business operation while this enforcement measure is being implemented, the tax authority shall allow the taxpayer to use invoices separately provided at least 18% of the revenue written on these invoices are immediately paid to state budget.

What are the regulations on the decision on tax enforcement by suspension of the use of invoices in Vietnam?

Under Clause 3, Article 34 of Decree 126/2020/ND-CP, the decision on tax enforcement by suspension of the use of invoices is regulated as follows:

- The decision on enforcement by invoice suspension shall be prepared according to Form No. 04/CC in Appendix III hereof; The invoice suspension notice shall be prepared according to Form No. 04-1/CC in Appendix III of Decree 126/2020/ND-CP.

+ The decision on enforcement by invoice suspension shall specify the basis for enforcement; the taxpayer’s name, address and TIN; reasons for enforcement and amount payable.

+ The notice of invoice suspension shall specify the basis for enforcement; the taxpayer’s name, address and TIN; reasons for suspension; invoice template symbols, invoice symbols and numbers; suspension date.

+ Heads of tax authorities, Director of Post-clearance Inspection Department, Director of the Smuggling Investigation and Prevention Department of General Department of Customs, Presidents of the People’s Committees of provinces and districts have the power to issue decisions on enforcement of the tax decisions they issued or authorize their deputies to issues such enforcement decisions; do not have the power to carry out the enforcement.

If the head is not present, a deputy may be authorized by the head to consider issuing the enforcement decision. The authorization letter shall be prepared according to Form No. 09/CC in Appendix III of Decree 126/2020/ND-CP. The authorized deputy shall be responsible to the head and the law for his/her decision, and must not authorize this task to any other person.

- The enforcement decision shall be issued:

+ Immediately after the expiration date of the decision on extracting money from the taxpayer's account; the decision on deducting money from taxpayer’s salary/income; the decision on suspension of customs procedures (if any) or the date specified in Clause 3 Article 125 of the Law on Tax Administration.

+ If the decision on enforcement by invoice suspension expires before the taxpayer fully pays the tax debt and the next enforcement measures cannot be implemented, or the invoice suspension is effective, the tax authority shall keep implementing the effective enforcement measures. In case an enforcement measure is found to be more effective or practical while another measure is being implemented, the former may be implemented by the tax authority.

- The enforcement decision shall be sent to the taxpayer and relevant entities within its issuance date and updated on the website of tax authorities.

+ The enforcement decision may be sent electronically if possible, otherwise it shall be sent by express mail or delivered in person.

+ In case the enforcement decision is delivered in person but the taxpayer refuses to receive it, the competent person or tax official who delivers the decision shall prepare a record on the taxpayer’s refusal to receive the enforcement decision, have it confirmed by the local government where the taxpayer’s address is registered. After all of these tasks are completed, it will be considered that the enforcement decision has been delivered.

+ It will be considered that the enforcement decision that is sent by express mail has been delivered after 10 days if is returned for the third time because the taxpayer refuses to receive it, it has been publicly posted at the taxpayer’s premises, or there are grounds for presuming that the taxpayer avoids receiving the enforcement decision.

- The enforcement decision ceases to be effective from the day on which the taxpayer fully pays the tax debt to state budget or the tax authority issues a decision for tax debt payment in instalment, tax deferral, late payment interest exemption or late payment interest cancellation.