New proposal on postponing exit when businesses owe taxes

(NLDO) - VCCI recommends that the Ministry of Finance remove the regulation on postponing exit for beneficial owners of enterprises.

The Vietnam Confederation of Commerce and Industry (VCCI) has just sent the Ministry of Finance comments to complete the draft Law on Tax Administration (amended). Recently, VCCI also consulted the business community on the issue of temporary suspension of exit when owing taxes.

Taxpayers work at a tax unit in Ho Chi Minh City. Photo: Hoang Trieu

According to VCCI, the draft law has added a provision to postpone exit for individuals who are beneficial owners of enterprises when the enterprise has not fulfilled its tax obligations.

Citing the Law on Enterprises, VCCI clearly stated that an individual only needs to own 25% of the capital to be a beneficial owner of the enterprise, regardless of whether they have the right to manage it or not.

"Beneficial owners are only responsible within the scope of their capital contribution or shares, and are not unlimitedly responsible for the tax obligations of the enterprise," said VCCI. According to this agency, in many cases, beneficial owners do not directly manage or make decisions on the operations of the enterprise.

Meanwhile, the purpose of the temporary exit suspension regulation is to put pressure on those who directly own and operate the enterprise to collect taxes. At that time, the temporary exit suspension for beneficial owners is too broad, affecting the freedom of movement of these entities, especially those who do not directly operate the enterprise.

This, according to VCCI, also potentially reduces the attractiveness of the investment environment, especially for foreign investors, when they may be restricted from leaving the country simply because the contributing enterprise has not paid taxes.

Furthermore, currently, the tax sector has many tax enforcement measures such as withdrawing money from bank accounts, not allowing the use of invoices, seizing and auctioning assets... The measure of temporary suspension of exit should only be applied specifically and to the right subjects. Therefore, VCCI recommends that the drafting agency remove this provision.

According to the current regulations in Decree 49 of the Government on the application of tax debt thresholds and debt periods in cases of temporary suspension of exit from the country. That is, business individuals and business household owners are subject to enforcement when they have tax debt of 50 million VND or more and the tax debt has been overdue for more than 120 days.

An individual who is the legal representative of an enterprise, cooperative, or cooperative union that is subject to compulsory enforcement of an administrative decision on tax management with a tax debt of VND 500 million or more and the tax debt is overdue for more than 120 days.

Source: https://nld.com.vn/de-xuat-moi-ve-hoan-xuat-canh-khi-doanh-nghiep-no-thue-196250928082333514.htm