Vietnam clarifies tax-exit ban rules, including for foreigners

Under Decree 252, effective July 1, foreign nationals with overdue tax debts may be temporarily barred from leaving Vietnam until they fulfill the conditions for lifting the restriction.

The rules also apply to Vietnamese citizens emigrating abroad or overseas Vietnamese departing Vietnam before completing their tax obligations.

Accordingly, business individuals and household businesses may face exit bans if they owe at least VND50 million (US$1,901) in overdue taxes for more than 120 days.

Legal representatives or beneficial owners of companies, cooperatives, and cooperative unions may be subject to the measure if their entities owe at least VND500 million ($19,011) for more than 120 days.

For businesses or individuals that tax authorities determine are no longer operating at their registered addresses, the government removed a previously proposed minimum tax debt threshold.

Instead, exit bans may be imposed if they fail to restore or terminate their tax registration within 120 days after receiving official notice.

The government extended that grace period from the 90 days previously proposed by the Ministry of Finance, saying the additional time would allow taxpayers to remedy violations before the measure is applied.

The Ministry of Finance had earlier proposed applying the rule to taxpayers no longer operating at their registered addresses if they owed at least VND1 million ($38) in taxes.

According to the tax authority, about 963,500 taxpayers no longer operating at their registered addresses still owe taxes, including 325,500 companies and 638,000 household businesses, with combined outstanding liabilities of about VND32.13 trillion ($1.22 billion).

The decree also relaxes the conditions for lifting an exit ban, with taxpayers no longer required to fully settle their tax debts.

The restriction will be lifted once they pay parts of their tax debts to reduce the remaining amount to below VND50 million for business individuals and household businesses, or below VND500 million for companies, cooperatives, and cooperative unions.

Tax authorities said they would immediately notify immigration authorities to cancel the exit restriction once the taxpayer meets the required conditions, shortening the process from the previous maximum of 24 working hours.

They also advised taxpayers to regularly monitor their tax status and any exit restrictions through the tax authority’s online portals and applications.