Tax enforcement measures according to Viet Nam Law on Tax Administration

Tax enforcement is a specific activity that can be carried out by many different measures depending on each circumstance. Let’s find out with Lawyer X these coercive measures through the following situation: “Hello, Lawyer! I want to ask when is the enforcement by extraction of money from the taxpayer’s account applied? In addition, are there other measures to enforce tax decisions? Thanks for answering me!”

Legal grounds

Viet Nam Law on Tax Administration

Enforcement by extraction of money from the taxpayer’s account; account freezing

– If the taxpayer deposits money in an account at State Treasury, commercial bank or credit institution, such account shall be extracted or frozen.

– Upon receipt of the tax enforcement decision, the State Treasury, commercial bank or credit institution shall transfer the amount of money specified in the decision from the taxpayer’s account to the state budget account at the State Treasury, send a written notice to the person who issues the tax enforcement decision and the taxpayer.

– In case the tax enforcement decision expires before the State Treasury, commercial bank or credit institution fully transfers the money to state budget, it shall send a written notice to the person who issues the tax enforcement decision and the taxpayer.

– Administrative penalties specified in Chapter XV of Law on Enterprises shall be imposed upon the State Treasury, commercial bank or credit institution in case it fails to fully transfer the money from the taxpayer’s account to the state budget account in accordance with the tax enforcement decision during the effective period of the tax enforcement decision while the taxpayer’s account balance is sufficient.

Enforcement by deduction of money from the taxpayer’ salary or income

– Money shall be deducted from the taxpayer’s salary or income if the taxpayer is working as a state official, working under an employment contract with a duration of at least 06 months, on pension or disability benefits.

– The amount deducted is 10% – 30% of the monthly salary/pension/benefits or up to 50% of other kinds of incomes.

– The taxpayer’s employer shall:

+ Deduct the amount of money specified in the tax enforcement decision to the state budget account at the State Treasury since the nearest income payment until the tax debt is fully paid, and send a written notice to the decision issuer and the taxpayer;

+ In case the taxpayer’s employment contract is terminated before the tax debt is fully paid, the employer shall inform the decision issuer within 05 working days from the contract termination date;

+ Administrative penalties specified in Chapter XV of Law on Enterprises shall be imposed upon the employer that disobeys the tax enforcement decision.

Enforcement by suspension of customs procedures

– The head of the customs authority to which the taxpayer owes tax debt shall make a notice at least 05 working days before the suspension of customs procedures.

– Customs procedures shall not be suspended in the following cases:

+ The exports are duty-free, not subject to export duty or subject to 0% export duty;

+ The exports or imports are meant to serve national defense and security, natural disaster management, epidemic response, emergency assistance; humanitarian aid or grant aid.

Enforcement by suspension of use of invoices

 Tax authorities shall announce suspensions of use of invoices on their websites and mass media within 24 hours.

Enforcement by seizure of the taxpayer’s assets and sell them at auction

– The taxpayer’s assets shall not be seized if the taxpayer is an individual receiving treatment at a health facility established in accordance with law.

– The value of the seized assets shall be equal to the amount written in then tax enforcement decision plus (+) the enforcement cost.

– The following assets must not be seized:

+ Medicines, essential foods of the taxpayers and their family;

+ Working tools;

+ Sole house, essential domestic appliances and utensils of the taxpayers and their family;

+ Religious objects; relics, medals, certificates of merit;

+ Assets serving national defense and security.

– If the taxpayer fails to fully pay the tax debt within 30 days from the date of seizure, the tax authority is entitled to sell the seized assets at auction.

Enforcement by confiscation of the taxpayer’s money and assets that are being held by a third party

– When the tax authority discovers that the taxpayer’s money and assets being held by a third party, they shall be confiscated.

– Rules for confiscation of the taxpayer’s money and assets being held by the third party:

+ If the third party owes a due debt payable to the taxpayer or is holding the taxpayer’s money or assets, the third party shall pay the tax debt in lieu of the taxpayer; 

+ If the taxpayer’s money or assets being held by the third party belong to secured transactions or are meant for bankruptcy process, they shall be handled in accordance with law;

+ The amount paid to state budget by the third party will be considered paid on behalf of the taxpayer.

– The third party shall:

+ provide the tax authority with information about the debt, money or assets of the taxpayer, including the amount or categories of assets and the condition thereof.

+ not return the money or assets to the taxpayer after receiving the written request from the tax authority until the taxpayer’s liability has been fulfilled or the assets have been transferred to the tax authority for sale at auction;

+ In case the tax authority’s request cannot be fulfilled, provide explanation for the tax authority within 05 working days from the receipt of the request;

+ incur the taxpayer’s debt and the enforcement measures specified in Clause 1 Article 125 of Law on Enterprises if the tax debt is not paid by the third party on behalf of the taxpayer within 15 days from the receipt of the tax authority’s request.

Enforcement by revocation of the certificate of business registration

– The head of the tax authority shall send a competent authority the request for revocation of the certificate of business registration, certificate of enterprise registration, cooperative registration certificate, investigation registration certificate, license for establishment and operation or practice certificate.

– The revoking authority shall inform the revocation through mass media.

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Frequently asked questions

Conclusion: So the above is Tax enforcement measures according to Viet Nam Law on Tax Administration. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com