Who pay the costs for tax enforcement in Vietnam?

Who pay the costs for tax enforcement in Vietnam?

Pursuant to Point a, Clause 3, Article 10 of Circular 215/2013/TT-BTC which regulates enforcement costs as follows:

Enforcement Costs

1. Determination of Enforcement Costs

a) Enforcement costs are determined based on actual expenses incurred during the implementation of the enforcement decision in accordance with the prices in each locality.

b) Enforcement costs include: costs for mobilizing personnel to implement the enforcement decision; remuneration for valuation experts to organize auctions, costs of organizing the auction of assets; costs for renting means to remove, transport items, and assets; costs for renting to keep or preserve seized assets; other actual costs (if any).

2. Expense Levels

The Director General of the General Department of Taxation bases on standards, policies, and state limits and the nature of enforcement work to issue spending norms for the implementation of tax enforcement decisions as regulated.

3. Payment of Enforcement Costs

a) The entity subject to enforcement must bear all costs for tax enforcement activities.

b) The entity subject to enforcement is responsible for paying all enforcement costs to the enforcing organization as notified by this organization.

c) If the entity subject to enforcement does not voluntarily pay, or pays insufficient costs, or does not pay on time as notified by the enforcing organization, the competent authority that issued the enforcement decision can issue an enforcement decision to recover enforcement costs by the measures stipulated in Clause 1, Article 3 of this Circular.

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Thus, the costs for tax enforcement activities will be entirely borne by the entity subject to tax enforcement.

Who pay the costs for tax enforcement in Vietnam? (Image from the Internet)

How to advance and reimburse tax enforcement costs in Vietnam?

Pursuant to Clause 4, Article 10 of Circular 215/2013/TT-BTC as amended by Clause 2, Article 2 of Circular 87/2018/TT-BTC on the advance and reimbursement of tax enforcement costs as follows:

- Advance of Enforcement Costs

Before organizing tax enforcement, the organization tasked with tax enforcement must submit a tax enforcement plan and an estimated budget for tax enforcement activities to the head of the agency issuing the enforcement decision for approval.

The estimated budget for enforcement activities is prepared based on the provisions of Clauses 1 and 2, Article 10 of Circular 215/2013/TT-BTC. Once approved, the estimated budget must be sent to the entity subject to enforcement along with the tax enforcement decision.

Based on the approved enforcement plan, the enforcing organization processes the advance of costs for enforcement activities from the budget allocated by the state to the agency executing the enforcement decision.

In case of enforcement under the provisions of Article 17 of Circular 215/2013/TT-BTC, the actual average cost of executing previous tax enforcement decisions is applied.

- Reimbursement of Enforcement Costs

Upon completion of the enforcement decision: The enforcing organization must submit final accounts of enforcement costs to the head of the agency issuing the enforcement decision for approval.

Based on the approved final account of enforcement costs and the remaining proceeds from handling the assets of the entity subject to tax enforcement after paying off the tax debt, fines, and late payment interest as stated in the tax enforcement decision to the state budget, the enforcing organization notifies the entity subject to enforcement in writing to pay the remaining costs (the document specifies the date, month, year of handling, the amount to be paid, payment address in cash, or bank account number if paid by transfer, and other necessary information).

Once the entity subject to enforcement pays the full amount in accordance with the approved final account, the enforcing organization must immediately process the reimbursement of the previously advanced enforcement costs to the agency executing the enforcement decision.

The agency executing the enforcement decision is responsible for monitoring and urging entities to bear enforcement costs to recover the advanced costs.

- At the end of each quarter and year, the agency executing the enforcement decision must compile and report on the use of the advanced budget for organizing enforcement (amount advanced, amount recovered, amount not yet recovered, reasons for non-recovery, etc.) to the superior management agency. The General Department of Taxation compiles and submits to the Ministry of Finance along with the annual budget settlement report.

What is the time limit for implementation of decision on enforcement in Vietnam?

Pursuant to Clause 1, Article 9 of Circular 215/2013/TT-BTC as amended by Clause 3, Article 1 of Circular 87/2018/TT-BTC, the statute of limitations is regulated as follows:

Time limit for implementation of decision on enforcement

1. A tax enforcement decision is valid for one year from the date stated in the decision. The enforcement period is recorded in the enforcement decision.

For enforcement decisions using the method of deducting money from the account of the entity subject to enforcement, the decision is valid for 30 days from the date stated in the enforcement decision. The enforcement period of 30 days is recorded in the enforcement decision.

2. Within the time limit specified in Clause 1 of this Article, if the organization or individual subjected to enforcement attempts to evade, delay, obstruct the enforcement, or fails to fulfill their responsibilities such as refusing to receive the enforcement decision or obstructing the tax authorities from taking enforcement measures as stipulated in Article 3 of this Circular, the enforcement time limit will be recalculated from the moment these actions cease.

3. An enforcement decision ceases to be effective from the time the entity subject to enforcement fully complies with the administrative tax penalty decision or fully pays the enforced tax debt, fines, late payment interest, or when the enforced tax debt, fines, late payment interest is permitted for tax payment extension, installment payments, or exemption from late payment interest.

The basis for terminating the validity of the enforcement decision is the proof of full payment of taxes, fines, late payment interest to the state budget by the entity subject to enforcement or the decision for tax payment extension, the decision for installment payments, or the notice of exemption from late payment interest.

Thus, the time limit for implementation of decision on enforcement is one year from the date stated in the enforcement decision. For enforcement decisions by means of deducting from accounts, the statute of limitations is 30 days from the date stated in the enforcement decision.