Issue of March, 2025 – Decree No. 49/2025/ND-CP dated February 28, 2025, stipulates the threshold for applying exit suspension

Dear Valued Clients,

On February 28, 2025, the Government issued Decree No. 49/2025/NĐ-CP on the thresholds for applying exit suspension (“Decree 49”). This Decree establishes specific criteria regarding tax debt thresholds and the duration of tax debt as a basis for competent authorities to impose administrative enforcement measures, ensuring that taxpayers fulfill their financial obligations to the State. Decree 49 takes effect from February 28, 2025.

Therefore, in this Legal Update, we will provide a detailed analysis of each tax debt threshold applicable to individuals subject to exit suspension under the provisions of Decree 49.

1. Scope of application

According to Article 2 of Decree 49, the entities subject to this Decree include:

• Business individuals, household business owners, and individuals who are legal representatives of enterprises, cooperatives, and cooperative unions that are subject to enforcement of administrative decisions on tax management;
• Business individuals, household business owners, and individuals who are legal representatives of enterprises, cooperatives, and cooperative unions that are no longer operating at their registered addresses;
• Vietnamese citizens emigrating to settle abroad, overseas Vietnamese, and foreign nationals who have outstanding tax debts or other state budget obligations managed by tax authorities before leaving Vietnam;
• Tax authorities, state agencies, and other organizations involved in the implementation of Decree 49.

This provision reflects the Government’s commitment to ensuring that all entities comply with tax obligations, regardless of their scale or business structure. Notably, applying these measures to emigrants underscores the strict tax management approach, ensuring that tax liabilities are settled before leaving the country.

2. Thresholds for tax debt and duration of debt in cases of exit suspension[1]

 3. Notification of exit suspension and cancellation of exit suspension[2]

Decree 49 also stipulates that when a taxpayer is subject to enforcement of an administrative decision on tax management under Article 124 of the Law on Tax Administration[3], the tax authority directly managing the taxpayer must immediately notify the individuals specified in Sections 2.1 and 2.2 above about the application of exit suspension measures. This notification is sent via the taxpayer’s electronic tax transaction account. If the electronic notification cannot be delivered, the tax authority will publish the information on its official website.

For taxpayers specified in Section 2.3 above, the tax authority directly managing the taxpayer will announce the application of exit suspension measures on its official website immediately after issuing a Notice regarding the taxpayer’s inactivity at their registered address.

For taxpayers specified in Section 2.4 above, the tax authority directly managing the taxpayer will send an exit suspension notice via the taxpayer’s electronic tax transaction account as soon as information is available about a Vietnamese citizen preparing to emigrate, an overseas Vietnamese, or a foreign national preparing to leave the country. If the electronic notification cannot be delivered, the tax authority will publish the information on its official website.

If, after 30 days from the issuance of an electronic notification or online announcement regarding the exit suspension for taxpayers under Sections 2.1, 2.2, and 2.3, the taxpayer has not fulfilled their tax obligations, the tax authority directly managing the taxpayer will issue an official document on the exit suspension and submit it to the immigration authority for enforcement.

If the taxpayer has fulfilled their tax obligations, the tax authority will immediately issue a notice to cancel the exit suspension and send it to the immigration authority. The immigration authority must process the cancellation within 24 hours of receiving the notice from the tax authority.

Notifications regarding exit suspension and cancellation of exit suspension are transmitted to the immigration authority through digital data exchange between the tax authority’s information technology system and the immigration authority. If electronic transmission is not feasible, the tax authority will send the exit suspension or cancellation notice to the immigration authority in paper form.

As usual, we hope you find this Legal Update helpful and look forward to working with you in the upcoming time.

Kind regards,

ENT Law LLC

The full version of this Legal Update can be found here.

————————————————————————————–

[1] Article 3 of Decree 49.

[2] Article 4 of Decree 49.

[3] Article 124 of the Law on Tax Administration 2019 [Cases subject to enforcement of administrative decisions on tax management], as amended and supplemented by Article 6.13 of the 2024 Law Amending the Law on Securities, the Law on Accounting, the Law on Independent Auditing, the Law on the State Budget, the Law on Management and Use of Public Assets, the Law on Tax Administration, the Law on Personal Income Tax, the Law on National Reserves, and the Law on Handling of Administrative Violations

“2. A taxpayer has outstanding tax debt after the expiration of the extended tax payment deadline.

3. A taxpayer with outstanding tax debt engages in asset dispersal or absconds.

4. A taxpayer fails to comply with an administrative penalty decision on tax management within the time limit specified in the decision, except in cases where the execution of the penalty decision is postponed or temporarily suspended.

5. Tax enforcement measures have not been applied in cases where the tax authority has deferred the tax debt within the debt deferral period; no late payment interest is applied in accordance with this Law; and the taxpayer is allowed to pay the outstanding tax debt in installments within a maximum period of 12 months from the start of the tax enforcement period.

The installment payment of tax debt shall be considered by the head of the tax authority directly managing the taxpayer based on the taxpayer’s request and must be guaranteed by a credit institution. The Minister of Finance shall regulate the number of installment payments and the procedures for applying for installment payments of tax debt.

6.Tax enforcement measures shall not be applied to taxpayers with outstanding customs duties and transit-related fees.

7. An individual who is the legal representative of a taxpayer must fulfill the tax obligations of an enterprise subject to enforcement of an administrative decision on tax management before exiting the country and may be subject to exit suspension in accordance with immigration laws.”