According to the 2019 Tax Administration Law and Decree 126/2020, tax and customs authorities are authorized to decide to temporarily suspend exit for individuals and business representatives who have not fulfilled their tax obligations. The new proposal requires individuals and business owners who owe taxes for more than 120 days with an amount of VND 10 million or more to be temporarily suspended from exit. For business and cooperative representatives, this measure applies when the unit owes overdue taxes for more than 120 days with an amount of VND 100 million or more.
The new draft of the Ministry of Finance aims to supplement clear regulations, ensure tax debt collection and reduce the situation of long-term arrears. In particular, for taxpayers who are no longer operating at their registered business address, the measure of temporary suspension of exit will be applied immediately regardless of the debt threshold.
The tax authority will notify the temporary suspension of exit via electronic means. If the notice cannot be sent, it will be posted on the tax authority's information portal. After 30 days from the date of notification, if the taxpayer has not fulfilled his/her obligations, the tax authority will send a document to the immigration authority to implement the temporary suspension decision.
Statistics from the General Department of Taxation show that since the beginning of the year, more than 6,500 cases of temporary suspension of exit due to tax debts have been reported, a three-fold increase compared to last year. As a result, the tax authority has recovered VND1,341 billion from 2,116 individuals and businesses.
A representative of the Ministry of Finance said that many countries such as China, Malaysia, and the US also apply similar policies to collect tax debts. In Vietnam, the increased application of temporary exit suspension measures from the end of 2023 has encouraged many individuals and businesses to voluntarily pay long-standing tax debts.
According to calculations, if the debt threshold is applied from 100 million VND for individuals, business owners and from 1 billion VND for enterprises, the whole country will have about 40,000 individuals subject to temporary suspension of exit. However, the Ministry of Finance believes that lowering the threshold to 10 million VND will increase the efficiency of tax debt collection, while avoiding major impacts on the business environment and supporting the development of budget revenue.
Currently, tax debt enforcement measures, including temporary suspension of departure, are applied to debts overdue for more than 90 days. This decision can be looked up on the tax authority's website or via the Etax application on the phone.
The Ministry of Finance emphasized that the application of new time and amount thresholds aims to increase taxpayer compliance, minimize debt arrears, thereby contributing to ensuring state budget revenue.
