What are measures of the Tax Departments of the provinces and central-affiliated cities to manage and recover tax debts in Vietnam?

What are regulations on categorization of tax debts in Vietnam?

Pursuant to Section 4 of the Procedure for Debt Management issued together with the Decision 1129/QĐ-TCT in 2022 stipulating criteria for categorization of tax debts as follows:

1. Bad debts shall be comprised of the following:

- Tax debts of taxpayers who are natural persons who are dead or declared dead, missing or incapacitated by the Court.

- Debts of taxpayers involved in criminal liability.

- Tax debts of taxpayers that are not operating at the registered addresses

- Tax debts of taxpayers undergoing dissolution.

- Tax debts of taxpayers undergoing bankruptcy.

- Tax debts of taxpayers subject to the measure for enforced suspension or invalidation of invoices at least 03 consecutive times.

- Tax debts of taxpayers whose Certificates of Business Registration have been revoked by competent authorities.

2. Debt pending settlement shall be comprised of the following:

- Debts of taxpayers that submit the request or application form for tax exemption, reduction or re-determination of tax payment obligations, enclosing required papers or documentary evidence, that has been received and is being handled or processed for tax exemption or reduction Decisions, or Notices of re-determination of tax payment obligations, to be issued by tax or other competent authorities. 

- Debts of taxpayers that submit the request or application form for tax deferral, enclosing required papers or documentary evidence, that has been received and is under consideration for tax deferral decisions to be issued. 

- Debts of which either taxpayers or tax authorities sign the request or application form, enclosing required papers or documentary evidence, that is being handled or processed for Decisions on cancellation to be issued. 

- Debts of taxpayers that submit the request or application form for tax payment in instalments, enclosing required papers or documentary evidence, that has been received and is under consideration for decisions on tax payment in instalments to be issued. 

- Debts of taxpayers that submit the request or application form for exclusion from being charged late payment interest, enclosing required papers or documentary evidence, that has been received and is under consideration for Notices of approval of exclusion from being charged late payment interest to be issued by tax authorities. 

- Late payment interest debts of taxpayers that submit the request or application form for exemption from late payment interest, enclosing required papers or documentary evidence, that is under consideration for Decisions on exemption from late payment interest to be issued by tax authorities.

- Debts of taxpayers whose tax refunds and setoffs of state budget revenue are in process. 

- Debts of taxpayers that have filed complaints or lawsuits regarding tax amounts and other state budget revenue payables that are being handled and processed by tax or other competent state authorities.

3. Tax amounts pending adjustment shall be comprised of the following:

- Tax amounts pending adjustment due to error(s).

- Tax amounts pending adjustment due to delay in or loss of evidencing documents or proofs of payment. 

4. Settled debts shall be comprised of the following:

- Tax debts owed by taxpayers of which decisions on charge-off have been issued by tax authorities. 

- Debts of taxpayers that obtain tax authorities’ notices of approval of exclusion from being charged late payment interest for the reason that they have not yet been paid by the state budget.

5. Recoverable debts automatically categorized on the electronic tax administration system shall be comprised of the following:

- Debt with a maturity of 1 - 30 days.

- Debt with a maturity of 31 - 60 days.

- Debt with a maturity of 61 - 90 days.

- Debt with a maturity of 91 - 120 days.

- Debt with a maturity of 121 - 365 days.

- Debt with a maturity of at least 366 days.

The General Department of Taxation in Vietnam implements measures to manage and recover tax debts

Pursuant to Official Letter 3658/TCT-QLN in 2023 stipulating measures to manage and recover tax debts as follows:

First: Classify the amount of tax owed

- Tax Departments of provinces and central-affiliated cities shall review and classify debts according to the nature of each debt.

- In case the debt is incomplete, the debt nature is incomplete, the classification dossier must be completed or reclassified.

Second: Urgency and coercive measures

- For taxpayers whose tax debt is less than 90 days, take the following measures: call, text, send email, invite to work, issue notice of tax debt.

- For taxpayers with tax arrears over 90 days, the following measures shall be taken: coercion to recover tax arrears into the state budget.

Thirdly: Publicize information of taxpayers with overdue tax debts in accordance with regulations.

In particular, focus on taxpayers with large and prolonged tax liabilities.

What are acts of tax evasion in Vietnam?

Pursuant to Article 143 of the Law on Tax Administration in 2019 stipulating acts of tax evasion in Vietnam as follows:

- Failure to submit the application for taxpayer registration; failure to submit the tax declaration dossier or to submit the tax declaration within 90 days from the deadline or extended deadline for submission specified in this Law.

- Failure to record the revenues relevant to calculation of tax payable in the accounting books.

- Failure to issue invoices when selling goods/services as prescribed by law; write lower prices on the sale invoices than the actual prices.

- Use of illegal invoices or illegal use of invoices for purchases in order to decrease the tax payable or increase the tax eligible for remission, deduction, refund or cancellation.

- Use of documents that do not truthfully reflect the nature of the transactions or their values which leads to decrease in the tax payable or increase in the tax eligible for remission, refund or cancellation.

- Incorrect declaration of exports or imports without making supplementation after customs clearance is granted.

- Deliberate omission or incorrect declaration of export or import duty.

- Collaboration with the consignor in evading import duty.

- Repurposing of tax-free goods without informing the tax authority.

- Carrying on business operation during the suspension period without informing the tax authority.

- The taxpayer fails to submit the application for taxpayer registration; fails to submit the tax declaration dossier or submits the tax declaration after 90 days without incurring tax;

- The taxpayer fails to submit the tax declaration dossier within 90 days after tax is incurred but has fully paid the tax, late payment interest before the tax authority announces the tax audit or tax inspection decision, or before the tax authority issues the record on late submission of the tax declaration dossier.

Best regards!