Which entities are subjects to enforcement by drawing money from the delinquent taxpayer’s account, account freezing in Vietnam?

Which entities are subjects to enforcement by drawing money from the delinquent taxpayer’s account, account freezing in Vietnam?

Based on Clause 1, Article 11 of Circular 215/2013/TT-BTC as follows:

Enforcement by drawing money from the delinquent taxpayer’s account at a State Treasury or credit institution; account freezing

1. Applicable Subjects

a) Enforcement by means of deducting money from the accounts of the coerced party that has accounts at the state treasury, credit institutions; account freezing is applicable to the coerced party under the cases stipulated in Article 2 of this Circular.

b) In cases where the coerced party is the manager of an ODA project, the account holder of ODA funds, and concessional loans at the state treasury, credit institutions, this enforcement measure does not apply.

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Thus, the enforcement by drawing money from the delinquent taxpayer’s account, and account freezing is applicable to coerced parties who have deposits at the State Treasury, commercial banks, and other credit institutions, including:

- For taxpayers

+ Taxpayers who owe tax, late payment tax for more than 90 (ninety) days from the tax payment deadline, the extended tax payment deadline as stipulated by the Law on Tax Administration 2019 and the competent state authority.

+ Taxpayers owe taxes, fines, late payment penalties, and exhibit behavior of fleeing or dispersing assets.

+ Taxpayers who do not comply with the administrative sanction decision on tax violations within 10 (ten) days from the date of receipt of the administrative sanction decision on tax violations will be enforced to comply with the administrative enforcement decision on tax.

In cases where the administrative sanction decision on tax violations has an execution period of more than 10 (ten) days and the taxpayer does not comply with the administrative enforcement decision within the period stated in the decision, the taxpayer will be enforced to comply (except in cases where execution of the administrative enforcement decision is postponed or suspended).

- Credit institutions that do not comply with the administrative sanction decisions on tax as stipulated by the Law on Tax Administration 2019 and the Law on Handling Administrative Violations 2012.

- Organizations that guarantee tax payment for taxpayers: beyond the 90-day period from the deadline to pay taxes, fines, and late payment fines according to tax agency approval documents, if the taxpayer has not fully paid to the state budget, the guarantor is enforced according to the Law on Tax Administration 2019 and the Law on Handling Administrative Violations 2012.

- The State Treasury, provincial and district-level state treasuries (collectively referred to as the State Treasury) do not transfer money from the accounts of the coerced party at the State Treasury to the state budget as per the administrative sanction decision of the tax authority.

- Organizations and individuals involved who do not comply with the administrative sanction decisions on tax of the competent authority.

Which entities are subjects to enforcement by drawing money from the delinquent taxpayer’s account, account freezing in Vietnam? (Image from Internet)

When is the time to issue the decision on drawing money from account or freezing account in Vietnam?

Based on Point b, Clause 3, Article 11 of Circular 215/2013/TT-BTC amended by Clause 5, Article 1 of Circular 87/2018/TT-BTC, the decision on drawing money from account or freezing account must be issued at the following times:

- After the 90th (ninetieth) day from the day: the tax payment deadline expires; the deadline for gradual tax debt payment as per the law expires;

- Immediately after the extended tax payment deadline expires;

- Immediately after the taxpayer fails to comply with the administrative sanction decision on tax violations within the prescribed time period (except in cases where execution of the administrative enforcement decision is postponed or suspended).

What is the responsibility of the State Treasury, commercial banks, and credit institutions in drawing money from account or freezing account in Vietnam?

Based on Article 129 of the Law on Tax Administration 2019 stipulates:

Enforcement by means of deducting from accounts, freezing accounts of the coerced party executing administrative tax management decisions

1. The measures of drawing money from account , freezing accounts apply to the coerced party executing administrative tax management decisions that have deposits at the State Treasury, commercial banks, and other credit institutions.

2. Upon receiving the decision to enforce the execution of an administrative tax management decision, the State Treasury, commercial banks, and other credit institutions are responsible for deducting the amount stated in the enforcement decision from the account of the coerced party executing the administrative tax management decisions and transferring it to the state budget account at the State Treasury, and simultaneously notifying in writing the issuer of the enforcement decision and the coerced party executing the administrative tax management decision about it.

3. When the enforcement decision expires and the State Treasury, commercial banks, and other credit institutions have not fully deducted the tax money according to the enforcement decision, they must notify in writing the issuer of the enforcement decision.

4. During the period the enforcement decision is valid, if the account balance of the coerced party executing administrative tax management decisions is still available but the State Treasury, commercial banks, and other credit institutions do not carry out the deduction of the coerced party's money to the state budget as per the enforcement decision, they will be administratively sanctioned as stipulated in Chapter XV of this Law.

5. the Government of Vietnam details this Article.

Thus, the responsibility of the State Treasury, commercial banks, and credit institutions in drawing money from account or freezing account is:

- They are responsible for deducting the amount stated in enforcement decisions from the account of the coerced party executing administrative tax management decisions and transferring it to the state budget account at the State Treasury;

- They must notify in writing the issuer of the enforcement decision and the coerced party executing administrative tax management decisions.