Proposal to temporarily suspend exit of business owners with tax debts of 500 million VND or more

ANTD.VN - The Ministry of Finance has proposed that from January 1, 2025, there will be four cases of tax debt that will result in temporary travel bans. Individuals owing 50 million VND or more, and representatives of businesses owing 500 million VND or more, will be prohibited 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 issue exit bans for individuals and business representatives who have not fulfilled their tax obligations.

However, current regulations do not specify a debt threshold for applying this enforcement measure. In the past, there have been many cases where individuals were temporarily suspended from leaving the country despite owing very small amounts of tax, causing much controversy.

Recently, the Ministry of Finance drafted and submitted to the Ministry of Justice for review a draft decree stipulating the threshold for applying temporary travel bans to tax debtors.

According to the draft Decree, the four cases subject to temporary travel bans include: Individuals and business owners with tax debts of 50 million VND or more, and tax debts that have exceeded the prescribed payment deadline by more than 120 days. This is a significant increase compared to the draft from early December (10 million VND).

The second category of individuals subject to temporary travel bans is the legal representative of a taxpayer (business, cooperative, or cooperative union) that is subject to enforcement of an administrative decision on tax management and has outstanding tax debts of 500 million VND or more that have been outstanding for more than 120 days. This threshold has also increased fivefold compared to the previous draft (100 million VND).

The Ministry of Finance proposes applying a threshold for tax debt that will result in temporary travel bans.

In addition, two other cases proposed for the application of this coercive measure are: Individuals conducting business, business owners, individuals who are legal representatives of enterprises, cooperatives, or cooperative unions that are no longer operating at their registered address, still owe taxes, and are only 30 days overdue from the date the tax authority notifies them of the temporary travel ban;

Vietnamese people leaving Vietnam to settle abroad, Vietnamese people residing abroad, and foreigners who owe taxes before leaving Vietnam.

The Ministry of Finance proposes that this regulation be applied from the beginning of 2025.

According to the Ministry of Finance, the proposed threshold for overdue tax debt resulting in temporary travel bans in the draft was determined after the drafting agency consulted the tax debt thresholds for temporary travel bans in many countries.

In Malaysia, the threshold for tax debt resulting in a temporary travel ban is 10,000 MYR (approximately 2,000 USD). The US applies a tax debt threshold of 40,000 USD to request the refusal or revocation of a passport.

"Comparing the average per capita income in the US in 2023, which was approximately $80,000, to the average per capita income in Vietnam, which is approximately $4,284, the debt threshold for individuals in Vietnam is approximately $2,100 (equivalent to VND 50 million), which is appropriate," the Ministry of Finance explained.

Regarding the proposal to select a new timeframe of over 120 days, according to the Ministry of Finance, this is to ensure the recovery of outstanding debts, increase taxpayer compliance, and avoid prolonged debt accumulation. Furthermore, this regulation can be implemented immediately upon the issuance of the decree, as this debt category has already been classified and tracked separately on the tax authority's application.

According to the Ministry of Finance, there are currently about 380,000 individual business owners and household business owners with tax debts of 10 million VND or more, and businesses with tax debts of 100 million VND or more; and about 81,000 individual business owners and household business owners with tax debts of 50 million VND or more.

Statistics from the Ministry also show that, through measures such as banning or temporarily suspending the departure of tax debtors, the tax authorities recovered 4,289 billion VND in 2024.

Source: https://www.anninhthudo.vn/de-xuat-tam-hoan-xuat-canh-chu-doanh-nghiep-no-thue-tu-500-trieu-dong-post599562.antd