Tax debt of VND 210 million - not resolved after 25 years due to lack of guidance

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Professional activities at Huu Nghi border gate Customs Branch (Lang Son Customs Department). Photo: H.Nu

Being persistent for more than 25 years

According to the case file, in 1997 and 1998, at Huu Nghi Border Gate Customs Branch (Lang Son Customs Department), a fine for late payment of the declarations of the ShengJia – Hoa Binh Export Processing Forest Product Joint Venture Company was incurred with a total amount of over 210 million VND.

Through investigation and verification, ShengJia - Hoa Binh Exported Forest Products Processing and Export Joint Venture Company, located in Hoa Binh province, is a joint venture between Hoa Binh Agricultural and Forestry Products General Trading Company (Vietnamese side) and Sheng Jia Industrial Company (headquartered in China) were established under license No. 1314/GP dated July 13, 1995, of the State Commission on Investment Cooperation in Headquarters. Headquarters and factories are located in Hoa Binh town, Hoa Binh province. The operation period of the joint venture company is 15 years from the date of issuance of the investment license; the legal representative is Mr Tran Gia Hoa (Chinese nationality).

To urge enterprises to pay tax debts to the state budget, Huu Nghi border gate Customs Branch has applied coercive measures to collect tax debts according to regulations, even requesting functional agencies to cooperate in the implementation of tax coercion for tax debtors. Huu Nghi Customs sent an official letter requesting the Department of Planning and Investment of Hoa Binh province to provide some relevant information.

At the end of August 2012, the Department of Planning and Investment of Hoa Binh province responded to the request of Huu Nghi Border Gate Customs Branch about verifying the operation status of enterprises; the content of the official letter affirmed: At the end of the operation period stated in the investment license, the People's Committee of Hoa Binh province issued Decision No. 1309/QD-UBND dated August 16, 2010, on the termination of the operation of Sheng Jia-Hoa Binh Export Processing Forest Products Joint Venture Company. Currently, joint venture members are carrying out procedures to dissolve the enterprise.

At the end of July 2022, the Department of Planning and Investment of Hoa Binh province continued to issue Official Letter No. 2701/SKHĐT-DN to provide Lang Son Customs Department with several relevant documents about the Joint Venture Company for Export Processing Forest Products Sheng Jia – Hoa Binh. In the document is Notice No. 5121/TB-CCT dated November 16, 2016, of Tax Sub-Department of Hoa Binh province on taxpayers' termination of tax identification number and Decision No. 01/QD-HĐQT dated August 19. 2015 of the Board of Directors of Sheng Jia - Hoa Binh Forest Products Processing and Export Joint Venture Company decided to dissolve.

In addition, on April 27, 2022, the People's Committee of Tan Hoa ward, Hoa Binh town, has a written confirmation that Sheng Jia - Hoa Binh Export Processing Forest Products Joint Venture Company is no longer operating in production and business at the registered address.

Talking about this issue, a representative of Lang Son Customs Department said that the unit has applied measures to urge, coerce, and verify that the Sheng Jia - Hoa Binh Export Processing Forest Products Joint Venture Company - Hoa Binh does not have real estate assets or other assets in the name of the company. In addition, from the information of the coordinating authorities, who have verified and looked up the national information system on enterprise registration, information about ShengJia – Hoa Binh Export Processing Forest Products Joint Venture Company is no longer displayed on the system.

According to Mr Nguyen Huu Vuong, Deputy Director of Lang Son Customs Department, the unit is reviewing and completing dossiers for cases where individuals and businesses owe tax to implement debt forgiveness as prescribed in Resolution No. 94 /2019/QH14 before the deadline expires. However, in the process of processing tax debt records of this company, the unit encountered difficulties in determining whether Sheng Jia - Hoa Binh Export Processing Forest Products Joint Venture Company was subject to tax debt cancellation according to Clause 2, Article 4, Resolution No. 94/2019/QH14?

Under Mr Nguyen Huu Vuong, although the unit has implemented all measures to urge, coerce, verify and coordinate closely with the authorities to determine the operating status of the enterprise. However, there are no specific instructions on how to determine how to be considered as taxpayers who can no longer pay the state budget, so the debt settlement file of this enterprise is still "yielding" without any further action.

Make sure to do all the procedures

Before this problem of Lang Son Customs, the General Department of Customs gave specific instructions for the unit to handle tax debt in accordance with regulations.

According to the provisions of Clause 2, Article 4 of Resolution No. 94/2019/QH14, one of the cases eligible for debt settlement includes: The subject of debt settlement is the taxpayer who owes tax, a late payment fine, and late payment interest and fall into one of the cases that arise before July 1, 2020, and are no longer able to pay the state budget.

The taxpayer that has a dissolution decision that shall be sent to the tax administration agency, the business registration agency for dissolution procedures; the business registration agency has notified the taxpayer that is carrying out the dissolution procedures on the national information system on enterprise registration, but taxpayers have not completed the dissolution procedures.

Compared to current regulations, the General Department of Customs requested Lang Son Customs Department to inspect the implementation of measures to enforce enforcement of administrative decisions on tax administration to ensure that taxpayers are no longer able to pay the budget and the business registration authority has notified the taxpayer that the taxpayer is carrying out procedures for dissolution on the national information system on enterprise registration, for consideration and settlement of debts according to Clause 2, Article 3 of Resolution No. 94/ 2019/QH14.

Article 1 of Resolution No. 94/2019/QH14 stipulates: "This Resolution stipulates the freezing of tax debts, debt cancellation of late payment fines and late payment interest for taxpayers who are no longer able to pay the state budget, including tax, fines for late payment, money for late payment, fines for administrative violations in the field of tax and customs incurred before the effective date of the Law on Tax Administration 2019".

According to the General Department of Customs, Article 4 of Resolution No. 94/2019/QH14 stipulates the cases in which debts arising before July 1, 2020, are no longer able to pay the state budget, such as deceased taxpayers, a person declared by a court to be dead, missing or incapacitated for civil acts; If the taxpayer has a dissolution decision, send it to the tax administration agency or business registration agency for dissolution procedures, the business registration agency has notified the taxpayer that the dissolution procedure is underway on the national information system on enterprise registration, but taxpayers have not completed dissolution procedures; the taxpayer has filed a petition to initiate bankruptcy proceedings or has been filed by a person with related rights and obligations to initiate bankruptcy proceedings following the bankruptcy law.

Customs handles tax debt: flexibly and rigorously - Part 3: Difficult to collect and write off tax debts

The General Department of Customs said that if Lang Son Customs Department has taken all steps to urge and coerce according to regulations, the tax debt cancellation dossier contains all documents and documents for verification and identification. ShengJia-Hoa Binh Export Processing Forest Products Joint Venture Company can no longer pay the state budget arising before July 1, 2020, and is subject to debt settlement according to Resolution No. 94/2019/QH14.