Outstanding Tax Debt – A Legal Gap That Needs to Be Plugged Soon

The situation of businesses “ceasing operations” but still having outstanding tax debts is a pressing issue, causing losses to the state budget. Especially when the legal representative of this business “leisurely” establishes a new business, “circumventing” tax obligations.

Petition From Voters: Need to Amend the Law to Tighten Management

The Delegation of the National Assembly of Thanh Hoa Province has proposed to the Ministry of Finance to amend and supplement methods of collecting and handling tax debts for cases where an individual represents multiple businesses, including businesses that have ceased operations but still have outstanding tax debts.

Current Tax Administration Law: Is It Strong Enough?

The Ministry of Finance cites current regulations on tax collection and debt handling, including:

• Late payment interest calculation.
• Tax debt notification.
• Tax debt enforcement (account deductions, account freezes, asset seizure…).
• Temporary exit suspension for business representatives with tax debts.

However, the Ministry of Finance acknowledges that the current Enterprise Law does not have provisions binding the responsibility of representatives for outstanding tax obligations of previous businesses.

Ministry of Finance “Nods”: Will Amend the Law to Close the Gap

The Ministry of Finance agrees with the voters’ petition and states that it will research and participate in the process of amending and supplementing the Enterprise Law.

Goals:

• Improve the efficiency of tax management.
• Limit the situation of businesses evading tax obligations by changing representatives or establishing new businesses.

New Points in the Tax Administration Law (amended and supplemented on November 29, 2024)

Individuals who are legal representatives of businesses subject to tax enforcement may be subject to temporary exit suspension if they have not fulfilled their tax obligations according to the debt threshold prescribed by the Government.