Keep the regulations on the exit ban threshold for tax debtors who leave their business address

The Government has just issued Decree 252 detailing a number of articles of the Law on Tax Administration (amended), including cases of temporary exit due to tax debt.

Accordingly, from July 1, individuals, householders and business representatives who leave their registered address will have their exit postponed, if their tax code is not restored after 120 days from the tax authority’s notification.

Not setting a threshold for tax debt to temporarily postpone exit for businesses and business households that leave their registered operating address is also being applied by the management agency from the end of February 2025 until now, according to Decree 49.

Previously, the Ministry of Finance proposed imposing a minimum debt threshold of 1 million VND for groups that abandoned their business addresses, to avoid postponing exit of small debt cases due to technical errors or slow data updates. At that time, the tax agency said that the whole country had nearly 1 million cases of tax debt that were no longer active at the registered address, but of which about 496,000 cases had a debt of less than 1 million VND.

In addition to the case of leaving the address, Decree 252 also maintains the cases of delayed exit including business individuals, business household owners who owe from 50 million VND or representatives, business owners, cooperatives who owe from 500 million VND, overdue for more than 120 days; People who leave the country to settle abroad but still owe taxes.

However, the management agency added the case of beneficial owners of businesses to the category of possible temporary exit if the business is forced to owe taxes, with a debt of 500 million VND or more and overdue for 120 days.

In the above cases, the tax authority will send a notice 30 days in advance to taxpayers subject to warning. After this deadline, if they have not fulfilled their obligations, the tax authority will transfer the file to the immigration management unit to implement the ban.

A new point of the Decree is to relax the conditions for canceling exit suspension. Previously, taxpayers could only remove this measure after completing all tax obligations. According to the new regulations, tax authorities will cancel the exit suspension when the remaining debt is less than 50 million VND for individual businesses, business households or less than 500 million VND for enterprises, cooperatives, and cooperative unions.

In case of inactivity at the registered address, the taxpayer can cancel the temporary exit when he or she restores the tax code, completes the tax declaration and payment obligation so that the remaining debt is below the above threshold, or has the tax code invalidated.

The Decree also shortens the processing time for cancellation of exit suspension. Instead of the tax authority issuing the notice within 24 working hours after the taxpayer completes the obligation, the new regulations require implementation as soon as the taxpayer is eligible. In case the money has been paid but the data has not been updated on the system, taxpayers can send feedback with electronic documents through the tax management system. The tax authority will check, compare and issue a notice to cancel the exit suspension if the taxpayer is eligible.

According to data from the Tax Department, up to now, more than 105,000 taxpayers have been notified of temporary exit from the country with a debt of over 61,000 billion VND. Of these, about 60,000 cases are taxpayers no longer operating at the registered address, with a total debt of about VND 6,900 billion.

The tax agency said it has recovered more than VND 4,000 billion from about 13,000 people subject to temporary exit. As for the group that removed its business address, the amount collected was more than 100 billion VND from about 7,100 cases.