Are individuals or business owners who owe taxes not allowed to exit Vietnam?

Hello, Lawnet would like to answer the following:

1. Are individuals or business owners who owe taxes not allowed to exit Vietnam?

According to Article 36 of the Law on Entry and Exit of Vietnamese Citizens 2019, regulations on cases of exit suspension are as follows:

- Suspects and defendants; persons who are accused or filed for charge, later proved that they may have committed crimes thus must be prevented from escaping or destroying evidence as specified in Code of Criminal Procedure.

- Persons subject to delayed imprisonment, persons suspended from imprisonment, persons on parole during probation period, persons subject to suspended sentence during probation period, persons executing community services during sentence enforcement period according to Law on Execution of Criminal Judgment.

- Persons having obligations according to regulations and law on civil procedure if their obligations to government, agencies, organizations and individuals are proved to be involved in proceeding and their exit are proved to influence the proceeding, interests of government, legal rights and interests of agencies, organizations and individuals; persons subject to judgment execution.

- Civil judgement debtors and legal representatives of agencies and organizations obliged to execute judgment and decisions according to regulations and law on execution of civil judgment if their exit is proved to influence interests of government, legal rights and interests of agencies, organizations and individuals; persons subject to judgment execution.

- Tax payers, legal representatives of enterprises subject to enforcement of implementation of administrative decision on tax administration, Vietnamese making exit to reside overseas and Vietnamese residing overseas that have not satisfied tax liabilities according to regulations and law on tax administration before making exit.

- Persons subject to enforcement and representatives of organizations subject to enforcement of implementation of decision on administrative sanctions and to be prevented from escaping.

- Persons subject to inspection and verification, proved to have committed particularly serious violations and to be prevented from escaping.

- Persons contracted from dangerous and infectious diseases and to be prevented from spreading the diseases throughout community unless allowed by foreign parties for entry.

- Persons whose exit is identified by competent authorities to influence national defense and security on a grounded basis.

Thus, when an individual or business owner is being forced to execute an administrative decision on tax administration, but has not yet fulfilled his/her tax payment obligation, he/she will be subject to exit suspension according to the Law on Entry and Exit.

2. Cases of cancellation of outstanding tax, late payment interest and fines in Vietnam

According to the provisions of Article 85 of the Law on Tax Administration 2019, the cases of cancellation of outstanding tax, late payment interest and fines include:

(1) An enterprise or cooperative is declared bankrupt and, after making the payments in accordance with bankruptcy laws, has no other assets to pay tax, late payment interest or fines.

(2) An individual is dead or declared dead or incapacitated by the court and does not have any assets, including inheritance, to pay the outstanding tax, late payment interest or fines.

(3)The tax authority fails to collect the taxpayer’s outstanding tax, late payment interest in cases other than those specified in Clause 1 and Clause 2 of Article 85 of the Law on Tax Administration 2019 within 10 years despite the implementation of enforcement measures specified in Point g Clause 1 Article 125 of the Law on Tax Administration 2019.

(4) In the force majeure events in which late payment interest is exempted according to Clause 8 Article 59 of the Law on Tax Administration 2019, the taxpayer’s business is still irrecoverable and thus tax, late payment interest and fines cannot be paid even after tax deferral is granted according to Point a Clause 1 Article 62 of the Law on Tax Administration 2019.

Thus, when an individual or business owner owes tax in the four cases mentioned above, the tax debt will be forgiven by the State according to the provisions of law.

Key word: tax | late payment | in Vietnam | entry | exit |

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