Tax enforcement measures in Vietnam

Tax enforcement measures in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Tax enforcement measures in Vietnam

According to Clause 1, Article 125 of the Law on Tax Administration 2019, 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.

2. When will the tax enforcement measures terminate in Vietnam?

According to Clause 2, Article 125 of the Law on Tax Administration 2019, the measures mentioned in Section 1 shall terminate when tax has been fully paid to state budget.

3. Regulations on applying measures to enforce administrative decisions on tax administration

According to Clause 3, Article 125 of the Law on Tax Administration 2019, the measures mentioned in Section 1 shall be applied as follows:

- Tax authorities shall choose the measures specified in Points a, b and c in Clause 1 of Article 125 of the Law on Tax Administration 2019 on a case-by-case basis;

- In the cases where any of the measures specified in Points d, dd, e and g in Clause 1 of Article 125 of the Law on Tax Administration 2019 cannot be applied, the next measures shall be applied;

- In case any of the measures mentioned in Section 1 turns out to be ineffective, the tax authority may implement the previous or the next one if possible before termination of the current measure.

4. Cases of tax enforcement in Vietnam

Cases of tax enforcement according to Article 124 of the Law on Tax Administration 2019 include:

- The taxpayer’s tax has been overdue for more than 90 days.

- The taxpayer fails to pay tax by the extended deadline.

- The taxpayer attempts to liquidate assets or abscond.

- The taxpayer fails to implement the tax decision by the deadline written therein, unless it is delayed.

- A tax decision will not be enforced for up to 12 months if the tax authority charges off the tax debt; exempts late payment interest in accordance with the Law on Tax Administration 2019; allows payment of outstanding tax in instalments.

Payment of tax by instalments shall be considered by the supervisory tax authority of the taxpayer on the basis of the taxpayer’s request and guarantee of a credit institution. The Minister of Finance shall specify the number of instalments and procedures for tax payment by instalments.

- Do not enforce tax payment if the taxpayer owes customs fees and transit fees.

- The legal representative of the enterprise against which the tax decision is enforced shall fulfill its tax liability before exiting the country and may be suspended from exit in accordance with immigration laws.

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