Proposal for individuals with tax debts of 10 million VND or more to be temporarily suspended from leaving the country

According to the 2019 Tax Administration Law and Decree 126/2020, heads of tax and customs agencies have the right to decide to postpone exit from the country for individuals and business representatives who have not fulfilled their tax obligations.

However, current regulations do not specify a specific debt threshold when applying this enforcement measure, meaning that even an overdue tax debt of 1 VND can result in temporary suspension of exit from the country.

In the draft decree currently seeking comments, the Ministry of Finance proposes that individuals and business owners with overdue tax debts of VND10 million or more for more than 120 days will have their exit temporarily suspended.

For individuals who are legal representatives of enterprises and cooperatives, this measure will be applied if the unit's debt is overdue for more than 120 days and from 100 million VND or more.

The exit ban will be applied immediately to taxpayers who are no longer operating at their registered business address. That is, the application will not need to follow the prescribed threshold. This is to recover tax debts to the state budget.

The tax authority will notify the taxpayer of the temporary suspension of exit by electronic means. In case the notice cannot be sent by this means, the tax authority will notify on the tax industry's electronic information page.

After 30 days, if the taxpayer has not fulfilled his/her obligations, the authorities will send a document on temporary suspension of exit to the immigration authority for implementation.

The measures of temporary suspension of exit applied by tax and customs authorities have tended to increase recently. According to data from the General Department of Taxation, since the beginning of the year, over 6,500 cases of temporary suspension of exit due to tax debts have been suspended, 3 times higher than last year. Authorities have collected 1,341 billion VND from 2,116 taxpayers whose exit was suspended.

The Ministry of Finance estimates that there are about 380,000 individuals nationwide who are subject to temporary exit suspension if the above regulations are applied. In cases where the tax debt threshold for individuals and business owners is from VND50 million and enterprises from VND500 million and above, there are about 81,000 individuals who are subject to temporary exit suspension.

If the debt threshold for individuals and business owners is from 100 million VND, and for enterprises from 1 billion VND or more, there are about 40,000 individuals nationwide who are subject to temporary suspension of exit.