Businesses still worry about tax debt threshold being suspended from exit

Exit tax debt threshold higher than previous proposals

According to the latest draft, the Ministry of Finance proposes a tax debt threshold of over VND50 million (for individuals) and VND500 million (for businesses) to apply the measure of temporary suspension of exit. This is a significantly higher level than previous proposals. The condition for application is that the tax debt must be overdue for at least 120 days.

This proposal is intended to address the situation where current regulations do not have a specific debt threshold, leading to uniform application, even for small debts, causing difficulties for taxpayers.

However, this threshold is still under consultation and may be adjusted before being officially applied. Currently, large enterprises are proposing to increase the threshold for business representatives to at least 1 billion VND to reduce pressure.

Is Vietnam learning internationally?

The Ministry of Finance said that this proposed threshold was built after consulting many countries and territories. In the US, a tax debt of 40,000 USD (nearly 1 billion VND) or more can lead to a refusal to issue a passport. Taiwan (China) applies a threshold of 1.57 billion VND. Compared to these countries and territories, the proposed threshold in Vietnam is still low. However, with an average income per capita of only about 4,284 USD/year, the Ministry of Finance believes that 50 million VND is appropriate.

Who could be affected if this proposal passes?

It is expected that, if the regulation comes into effect, this measure will apply to:

Individual or business representative no longer operating at the business registration address.

Cases that are preparing to leave Vietnam to settle down or leave Vietnam.

To avoid risks, the Ministry of Finance recommends that individuals and businesses check their tax obligations on the online platform eTax or eTax Mobile.

Notable figures from the tax authorities

Since the beginning of the year, the tax authority has issued more than 58,680 notices of temporary suspension of exit with a total tax debt of up to VND80,512 billion. Nearly 6,500 cases have paid and recovered more than VND4,289 billion.

Waiting for public consensus

The draft will continue to be consulted before being submitted to the Government for approval. However, this proposal by the Ministry of Finance is currently receiving mixed opinions. Some experts believe that the threshold for individuals should be increased, while representatives of small businesses are concerned that the VND500 million threshold may cause difficulties.

Sharing with reporters, Mr. N.T.T - representative of a business in An Khanh, Hoai Duc (Hanoi) - expressed: The new level proposed by the Ministry of Finance seems suitable for large enterprises, but for small and medium enterprises, this is still a significant pressure. In particular, businesses facing temporary financial difficulties or waiting for tax refunds may be severely affected.

The leader of this enterprise said: "My unit is a textile enterprise. Sharing with other enterprises in the same industry, some enterprises said that they did not intentionally evade taxes but were facing difficulties due to market decline or delayed payments from partners. I think that the Ministry of Finance needs to have clearer regulations to distinguish between tax debts due to temporary financial difficulties and tax debts with signs of evasion."

Speaking with Lao Dong, Dr. Nguyen Ngoc Tu - lecturer at the University of Business and Technology, former Editor-in-Chief of Tax Magazine - said that it is necessary to temporarily suspend exit from the country for cases of overdue tax debts, including: Individuals with overdue tax debts of 100 - 200 million VND; small and medium-sized enterprises with overdue tax debts of over 1 billion VND; large corporations with overdue tax debts of at least 10 billion VND.