Make sure to erase tax debt to the right audience

	Tax sector dractically reduces tax debt
	Quang Ninh Customs recovers more than VND 1.5 billion of tax debt

Many cases cleared of tax debt if eligible. Photo: TL.

Strict management of subjects entitled to tax debt remission

Tax Administration Law No. 38/2019/ QH14, effective from July 1, 2020, stipulates four cases of tax arrears, late payment interest, and fines. Cases of debt remission are taxpayers who have died, lost their civil act capacity and have no property, including inheritance to pay outstanding tax debts; or have become bankrupt under a court decision and have no property left to pay taxes; or taxpayers that have had their business licenses revoked, tax agencies have applied all coercive measures to collect debts but taxpayers no longer have assets to pay tax, fines, late payment interest and tax debts that have been overdue for more than 10 years are irrecoverable.

According to many experts, the above regulation is in accordance with international practice because most countries have a mechanism to write off tax debts that are no longer possible to recover. There are even some countries that allow taxpayers to write off their tax debt if there is evidence to prove the payment of tax debt seriously affects the lives of taxpayers. Like dependents, taxpayers only have enough assets to meet basic needs in ordinary activities.

To ensure the transparency and transparency of the write-off, the draft decree details a number of articles of the Law on Tax Administration No. 38/2019/ QH14 that provide procedures, documents and appraisals. The right to write off tax debts is quite strict; it must be done through many levels and stages, from the tax department level, which is the tax office directly managing taxpayers, to provincial People's Committees and General Department of Taxation, Ministry of Finance and Prime Minister.

At the same time, the elimination of tax debt must also be consulted by agencies and departments, through many relevant departments and publicised on the mass media, subject to supervision, inspection and strict control of people, businesses, People's Councils at all levels, State Audit agencies, the Vietnam Fatherland Front and the National Assembly. Every year, the Chairman of the provincial People's Committee must report on tax debt, late payment interest, and fines to the People's Council of the same level at the start of the year. The Finance Minister must sum up the situation of writing off tax debts, late payment interest and fines for the Government to report to the National Assembly when settling State budget.

Particularly for delaying, failing to pay tax, dispersing assets or intentionally appropriating the State's tax, the General Department of Taxation will strictly handle it in accordance with the law to recover tax money into the State budget.

Paying back tax cleared if returning to business

To ensure strict implementation in writing off tax arrears, avoiding taking advantage of State budget revenues, Clause 5, Article 85 of the Law on Tax Administration assigns the Government to stipulate the coordination between tax administration agencies and business registration agencies, local governments ensure tax amounts, late payment interest, fines have been removed must be returned to the State budget before issuing business registration certificates, registration certificates enterprise. This means the enterprise has stopped operating, went bankrupt, had its tax debt cleared, and if it wants to return to its business operation, it must pay the deleted tax debt, including late payment interest and tax fines that authorities have previously decided to handle.

To ensure the elimination of tax debts to the right subjects and to control tax debt - write-off debts - establishing new businesses, the draft stipulates coordination between tax agencies and business registration agencies and local governments in repayment of tax, late payment interest, and fines that have been written off before the issuance of the business registration certificate or business registration certificate to the taxpayer who has written off the debt. Accordingly, the exchange of business information between a tax administration agency and a business registration agency is conducted via an electronic network connecting the tax information system and national information system on business registration.

The order in which information is exchanged is that the tax administration agency provides the business registration authority with information about taxpayers that have been written off. The business registration agency shall provide the tax administration agency information on the request for enterprise establishment registration, business household establishment registration, etc. of persons who have been written off. Tax administration agencies shall provide business registration offices information on fulfilling taxpayers' tax payment obligations which have been written off.

The draft also stated business registration agencies do not issue business registration certificates, business registration certificates for individuals, business individuals, household heads, business household owners, and business owners, private enterprises and single-member limited liability companies have their debts written off before they have been refunded to the State budget.