Who are subject to exit suspension if tax liabilities are not fulfilled in Vietnam from January 1, 2025?

Who are subject to exit suspension if tax liabilities are not fulfilled in Vietnam from January 1, 2025?

Pursuant to Clause 9, Article 6 of the Law Amending the Law on Securities, Law on Accounting, Law on Independent Audit, Law on State Budget, Law on Management and Utilization of Public Property, Law on Tax Management, Law on Personal Income Tax, Law on National Reserves, Law on Handling Administrative Violations 2024 (document effective from January 1, 2025) which provides for amendments and supplements to certain articles of the Law on Tax Management as follows:

Amending and supplementing certain articles of the Law on Tax Management

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9. Amending and supplementing Clause 1, Article 66 as follows:

"1. Business individuals, household business owners, individuals who are legal representatives of enterprises, cooperatives, unions of cooperatives subject to enforcement of administrative decisions on tax management, individuals who are Vietnamese exiting for settlement abroad, Vietnamese residing abroad, foreigners before exiting Vietnam must fulfill their tax liabilities; in cases where tax liabilities for unpaid tax amounts and debt periods do not meet the thresholds prescribed by the Government of Vietnam, they will be suspended from exiting in accordance with the law on exit and entry. The tax authority shall notify taxpayers in advance of the application of exit suspension measures.”

Accordingly, from January 1, 2025, the Law Amending the Law on Securities, Law on Accounting, Law on Independent Audit, Law on State Budget, Law on Management and Utilization of Public Property, Law on Tax Management, Law on Personal Income Tax, Law on National Reserves, Law on Handling Administrative Violations 2024 comes into effect, the following subjects will be subject to exit suspension if tax liabilities are not fulfilled:

- Business individuals, household business owners, individuals who are legal representatives of enterprises, cooperatives, unions of cooperatives subject to enforcement of administrative decisions on tax management.

- Individuals who are Vietnamese exiting for settlement abroad, Vietnamese residing abroad, and foreigners who have not fulfilled tax liabilities before exiting.

- Cases where tax liabilities on unpaid tax amounts and debt periods do not meet the thresholds prescribed by the Government of Vietnam.

Who are subject to exit suspension if tax liabilities are not fulfilled in Vietnam from January 1, 2025? (Image from the Internet)

What are procedures for exit suspension in cases of failling to fulfill tax liabilities in Vietnam?

Pursuant to Clause 3, Article 21 of Decree 126/2020/ND-CP, the procedures for the implementation of exit suspension are regulated as follows:

(1) After reviewing and accurately determining the tax liabilities of the taxpayer, the tax authority directly managing the taxpayer shall prepare a list of individuals, legal representatives of enterprises subject to exit suspension and prepare documents according to Form 01/XC Appendix 3 of Decree 126/2020/ND-CP sent to the immigration management authority and notify the taxpayer to fulfill tax liabilities before exiting.

(2) On the day of receiving the exit suspension document from the tax authority, the immigration management authority is responsible for implementing the exit suspension according to the regulations and publishing it on the website of the immigration management authority.

(3) If the taxpayer fulfills the tax liabilities, within 24 working hours, the tax authority shall issue a document cancelling the exit suspension according to Form 02/XC Appendix 3 of Decree 126/2020/ND-CP sent to the immigration management authority to implement the cancellation of exit suspension according to the regulations.

If 30 days before the exit suspension period expires but the taxpayer has not fulfilled the tax liabilities, the tax authority shall send a document to extend the exit suspension according to Form 02/XC Appendix 3 of Decree 126/2020/ND-CP to the immigration management authority and notify the taxpayer.

(4) exit suspension documents, extensions, and cancellations are sent by postal service or electronically if electronic transaction conditions are met and published on the website of the tax authority. If documents sent to taxpayers via postal service are returned and already published on the website of the tax authority, they are considered sent.

What is the responsibility of taxpayers in Vietnam?

Pursuant to Article 17 of the Tax Management Law 2019 as amended by Clause 4, Article 6 of the Law Amending the Law on Securities, Law on Accounting, Law on Independent Audit, Law on State Budget, Law on Management and Utilization of Public Property, Law on Tax Management, Law on Personal Income Tax, Law on National Reserves, Law on Handling Administrative Violations 2024 (document effective from January 1, 2025), taxpayer responsibilities are regulated as follows:

- Perform taxpayer registration, and use of tax codes as prescribed by law.

- Accurately, truthfully, and fully declare and submit tax dossiers on time; be responsible before the law for the accuracy, truthfulness, and completeness of tax dossiers and documents provided to tax authorities during the tax dossier processing in accordance with the law on taxes.

- Pay taxes, late payment interest, and fines fully, on time, and at the correct locations.

- Comply with accounting, statistical policies, and management, use invoices, and vouchers as prescribed by law.

- Accurately, truthfully, and fully record activities that arise tax liabilities, tax deductions, and transactions that must declare information about taxes.

- Make and deliver invoices, and vouchers to buyers in the correct quantity, type, actual value paid for goods and services according to the law.

- Accurately, fully, and promptly provide information, and documents related to tax liabilities, including information on investment value; transaction accounts and contents opened at commercial banks, and other credit institutions; explain tax calculation, tax declarations, and tax payments as required by tax authorities.

- Comply with decisions, announcements, and requirements of tax authorities, and tax officials as prescribed by law.

- Be responsible for tax liabilities according to law in cases where legal or authorized representatives conduct tax procedures incorrectly.

- Taxpayers conducting business activities in regions with information technology infrastructure must perform declarations, tax payments, and transactions with tax authorities via electronic means according to the law.

- Based on the actual situation and information technology conditions, the Government of Vietnam prescribes details of taxpayer exemptions for not submitting documents in tax dossier declarations, payments, refunds, and other tax dossiers that state authorities already have.

- Develop, manage, and operate an infrastructure system to ensure electronic transactions with tax authorities, apply information connection related to tax liabilities with tax authorities.

- Taxpayers arising connected transactions are required to make, store, declare, provide dossiers of information on taxpayers and linked parties, including information on linked parties residing in countries, territories outside Vietnam as prescribed by the Government of Vietnam.