Are tax debtors allowed to leave the country?

As defined in the 2019 Law on Tax Administration (the Law), fulfillment of tax obligations means full payment of payable tax amounts, late-payment interests, fines for violations of the tax laws, and other state budget revenues.

I’m a foreigner married to a Vietnamese woman. My wife and I, we are currently living in Vietnam. We are planning an overseas business trip next month but, as it is recently reported on local media that people with tax debts are suspended from exit, I wonder in which cases will a person be subject to exit suspension due to non-fulfillment of tax obligations?

As defined in the 2019 Law on Tax Administration (the Law), fulfillment of tax obligations means full payment of payable tax amounts, late-payment interests, fines for violations of the tax laws, and other state budget revenues.

According to Article 21.1 of Government Decree 126/2020/ND-CP, guiding several articles of the Law on Tax Administration (Decree 126), a person will be subject to exit suspension in the following cases:

+ He is the legal representative of an enterprise being subject to enforcement of tax administration-related administrative decisions and having not fulfilled its tax obligations;

+  He is a Vietnamese citizen, is going to leave Vietnam for permanent residence in a foreign country but has not fulfilled his tax obligations;

+ He is an overseas Vietnamese, is going to leave Vietnam but has not fulfilled his tax obligations; or,

+ He is a foreigner, is going to leave Vietnam but has not fulfilled his tax obligations.

However, if such person or the enterprise of which he is the legal representative has obtained bank guarantee for his/its tax obligations, such person will not be subject to exit suspension. In this case, the guarantor will have to fulfill tax obligations of the guaranteed party on the latter’s behalf within the scope of guarantee.

Under Article 124 of the Law, a taxpayer will be considered being subject to enforcement of a tax administration-related administrative decision when it/he/she: (i) owes a tax debt for more than 90 days from the expiration of the law-prescribed tax payment time limit; (ii) owes a tax debt though the extended time limit for tax payment has expired; (iii) owes a tax debt and commits acts of dispersing property or fleeing away; or (iv) fails to abide by a tax administration-related administrative sanctioning decision within the time limit stated in such decision, unless it/he/she is entitled to postponement or suspension of execution of such decision.

Hence, as a Vietnamese, your wife may take an overseas trip for any legal purpose, except permanent residence in a foreign country even when she has yet to fulfill her tax obligations as long as she does not fall in the cases as mentioned earlier of enforcement of tax administration-related administrative decisions. Meanwhile, you, as a foreigner, may only leave Vietnam after fulfilling all tax obligations. Nevertheless, if you and your wife have managed to get a bank guarantee for your tax obligations, you two may leave the country, regardless of the purpose of your trip and whether you have fulfilled your tax obligations.

Which agencies are competent to decide on exit suspension?

As stipulated in Article 21.2 of Decree 126, heads of tax offices managing taxpayers may, based on the actual situation and tax administration work in their localities, decide to select persons subject to exit suspension.

Article 3.5 of the Ministry of Finance’s Circular 80/2021/TT-BTC clarifies managing tax offices as:

+ Tax offices that manage localities where taxpayers’ headquarters are based;

+ Tax offices managing localities where taxpayers’ dependent units are located, in case such units are located in localities other than the provinces or centrally run cities where the taxpayers are headquartered and declare tax directly to local tax offices;

+ The Department of Large Taxpayers under the General Department of Taxation;

+ Tax offices that issue tax identification numbers, for individuals with income from salaries and wages, which may be changed to tax offices that perform tax finalization for such individuals.

For an individual who receives inheritances or gifts being securities or capital contributions in economic organizations or business establishments in Vietnam and falls into cases subject to tax declaration to tax offices, the managing tax office is the tax office managing the securities-issuing organization. In case there are several tax offices managing several securities-issuing organizations, the managing tax office is the tax office of the locality where such individual resides.

Persons competent to decide on exit suspension also have the jurisdiction to extend the exit suspension period and annul exit suspension.

What are the procedures for issuance of decisions on exit suspension?

Under Article 21.3 of Decree 126, every month, after reviewing, comparing and accurately determining tax obligations of individual taxpayers under its management, a tax office will make a list of individuals subject to exit suspension and send such list, enclosed with relevant documents, to the immigration agency and concurrently notify thereof to the concerned taxpayers for them to fulfill tax payment obligations before leaving the country.

Right on the day of receiving a tax office’s document on exit suspension applicable to an individual, the immigration agency will enforce the document according to regulations and publish information thereon on its website.

Within 24 hours after the taxpayer fulfills the tax obligations, the tax office will issue a document annulling the exit suspension, and send it to the immigration agency for the latter to annul the exit suspension according to regulations.

Thirty days before the exit suspension period expires, if the taxpayer still fails to fulfill the tax obligations, the tax office will send a document on extension of the exit suspension period to the immigration agency and concurrently to the taxpayer.

Documents on exist suspension, extension of exit suspension period and annulment of exit suspension must be sent by post or by electronic means when conditions permit and published on websites of tax offices.

Please be noted that in case a document sent by post to a taxpayer is returned, it will still be considered to be successfully sent if it has been published on the website of the concerned tax office. So, taxpayers should promptly notify managing tax offices of change of their contact addresses and check their tax obligations via etaxvn.gdt.gov.vn.-