From October 19, 2020, the Government of Vietnam issued the Decree No. 126/2020/NĐ-CP on elaboration of the Law on Tax Administration. According to this Decree, there are some new points on the application of enforcement measures to tax debt as follows:
Article table of contents
1. Tax authorities have the right to request customs authorities to take coercive measures to stop carrying out customs procedures for imported and exported goods
According to Clause 8 Article 33 of the Decree No. 126/2020/NĐ-CP of Vietnam’s Government, in case the tax authority sends a written request to the customs authority to issue a decision on coercion by stopping customs procedures for exported or imported goods, the order of implementation shall be as follows:
- The tax authority shall prepare and send the written request for suspension of customs procedures to the customs authority. The request shall specify the requesting unit, date of request, basis for request, name and address of the taxpayer against whom tax is enforced, amount payable, reasons for enforcement, full name, position and signature of the signor, seal of the requesting authority (if any).
- Within 05 working days from the day on which the tax authority’s request is received, the customs authority shall suspend customs procedures and send a written notice to the tax authority.
In case customs procedures cannot be promptly suspended, a written notice and explanation shall be sent to the tax authority.
- Within 03 working days from the day on which the tax debt is fully paid, the tax authority shall send a notice to the customs authority in order to resume customs procedures.
Thus, from December 05, 2020, the provision that tax authorities have the right to request customs authorities to take coercive measures to stop carrying out customs procedures for imported and exported goods is newly stipulated. Previously, it was completely not regulated that tax authorities were allowed to request customs authorities to take enforcement measures to stop customs procedures for taxpayers engaged in import and export activities.
2. Invoice enforcement can be applied concurrently with other enforcement measures
According to Point b.2 Clause 3 Article 34 of the Decree No. 126/2020/NĐ-CP of Vietnam’s Government, if the decision on enforcement by invoice suspension expires before the taxpayer fully pays the tax debt and the next enforcement measures cannot be implemented, or the invoice suspension is effective, the tax authority shall keep implementing the effective enforcement measures. In case an enforcement measure is found to be more effective or practical while another measure is being implemented, the former may be implemented by the tax authority.
Thus, from December 05, 2020, in case an enforcement measure is found to be more effective or practical while another measure is being implemented, the former may be implemented by the tax authority. In comparison with previous regulation, invoice coercion must not be applied concurrently with other coercive measures.
3. Enforcement decisions will take effect from the date of issuance
According to Clause 1 Article 125 of the Law on Tax Administration of Vietnam, tax enforcement measures include:
- Extract money from the taxpayer’s account at the State Treasury, commercial bank or credit institution; freezing accounts;
- Deduct money from the taxpayer’ salary or income;
- Suspend customs procedures for exports or imports;
- Suspend use of invoices;
- Seize the taxpayer’s assets and sell them at auction in accordance with law;
- Confiscate the taxpayer’s money and assets that are being held by a third party;
- Revoke the certificate of business registration, certificate of enterprise registration, cooperative registration certificate, investigation registration certificate, license for establishment and operation, practice certificates.
All these enforcement measures are guided from Article 31 to Article 37 of the Decree No. 126/2020/NĐ-CP, whereby all these articles stipulate that the enforcement decision will take effect from the date of issuance.
From December 05, 2020, enforcement decisions will take effect from the date of issuance. In comparison, Clause 3 Article 27 of the Decree No. 129/2013/NĐ-CP (expired on December 05, 2020) regulated that decision on enforcement by withdrawing money from accounts shall take effect 05 days after its issuance. According to Clause 1 Article 36 of the Decree No. 129/2013/NĐ-CP, the decision on account enforcement takes effect 3 days after its issuance.
Le Vy
