Should the departure of a business leader be postponed because he owes less than 1 million VND in taxes?

Business owes tax, director's departure is delayed

Last week, the Saigon Port Customs Branch, Region 4 (HCMC Customs Department) sent 5 notices to the Exit Management Department ( Ministry of Public Security ) requesting to temporarily suspend the exit of a number of legal representatives of enterprises (DN) that are in tax debt. Of which, the highest tax debt is 680 million VND for Quy Thinh Trading Company Limited (District 12, HCMC). The administrative decision on tax management, not yet completed the tax payment obligation of this enterprise was issued in October 2013, nearly 11 years ago.

Second is the tax debt of 290 million VND of ATB Food Industry Company Limited (District 5, Ho Chi Minh City), the person whose exit was delayed is Mr. NHH - Chairman of the Board of Directors and Director. In addition, there is Mr. DHS - Chairman of the Board of Directors, legal representative of Saigon DD Wood Company Limited (the company owes 62 million VND); Ms. TTQ - Director of ND Construction, Trade and Service Company Limited (District 2, Ho Chi Minh City, still owes more than 10.2 million VND)...

Many businesses with tax debts have had their legal representatives issued exit suspension notices by customs authorities.

In particular, in the 5 notices of temporary suspension of exit from the customs unit mentioned above, there is the case of Ms. LHB - Chairman of the Board of Directors and Director of GT Chemical Trading Company Limited ( Binh Duong ). Ms. LHB was requested to temporarily suspend her exit from May 18 on the grounds that the company she is legally representing owes 997,222 VND in taxes. The decision to enforce the decision of "not yet fulfilling tax obligations" was made 10 years ago, in May 2014. Similarly, in February, the director of a company in Ho Chi Minh City was also temporarily suspended from leaving the country because the company owed 1.1 million VND in taxes, not including late payment penalties.

In addition, there are some cases where many people only found out at the airport that they were temporarily suspended from leaving the country due to tax debts. For example, in October 2023, Ms. LTV, legal representative of Baby Care Trading Company Limited (District 1, Ho Chi Minh City), submitted a petition to the Saigon Port Customs Branch, Region 1 because she received a notice of temporary suspension of exit while she had never been a director and knew nothing about Baby Care Company. She affirmed that her information was stolen to establish a company with bad intentions, evade taxes and requested the business registration licensing agency to coordinate work, provide Baby Care Company's records to the police to verify the forgery, revoke the business registration certificate of this company, and cancel the notice of temporary suspension of exit for her.

It can be seen that more and more business leaders are banned from leaving the country because of tax debts, even for very small amounts, less than 1 million VND. Many opinions say that postponing the departure of business leaders just because of 1 million VND in tax debt is "a bit too much".

Regarding this, lawyer Nguyen Quoc Toan, Director of IAM Law Firm (HCMC), said that tax debt, even 1 dong, is a violation and individuals and businesses involved in overdue tax debt are all subject to the same legal provisions. Tax does not distinguish between rich and poor. That is, there is no such thing as a small or large debt, only overdue debt is a violation.

Citing the story of an old American man who paid his house tax of 500 USD but forgot about the interest accrued during the time the payment check was sent, which was 8.41 USD, and then 3 years later had his house worth 60,000 USD seized, lawyer Nguyen Quoc Toan said: If you owe more than 8 USD, your property can be seized. The principle of US law is that if you do not pay enough tax in the previous year, the property owner will be considered to have tax debt. Here, the tax debt of the enterprise is only nearly 1 million VND, a small number at first, but if you calculate the overdue debt and interest debt over the past 11 years, the debt certainly does not stop at 1 million VND.

Sharing the same view, Associate Professor Dr. Dinh Trong Thinh (Academy of Finance), financial economics expert, commented: Tax is a legal regulation with the highest legal status, contributing to the state budget that every individual and enterprise with revenue and profit must pay. In principle, enterprises and their legal representatives must calculate, declare, and comply with tax payment.

"Simply put, decisions to temporarily suspend exports or enforce customs related to tax debts aim to ensure the rule of law for businesses and entrepreneurs. Once a business is established and is the legal representative of the business, the rule of law must be put first. Tax debt and tax enforcement notices are sent to businesses many times by the management agency. During that time, how could the legal representative of the unit not know? Or do they think the amount of money is small and not worth paying attention to? I think there should be no discrimination and leniency in cases of tax arrears like this," Associate Professor, Dr. Dinh Trong Thinh expressed his opinion.

Late tax refund for businesses, who is responsible?

If the tax industry increasingly tightens tax payment and tax debt, on the other hand, many businesses believe that for slow tax refunds, the tax authority also needs to take responsibility.

Recently, VN Rubber Investment Company Limited said that the company has been delayed in tax refunds for about 2 years now, with an amount of up to nearly 70 billion VND. The amount of delayed tax refunds is even larger than the company's capital. The company is forced to temporarily suspend operations because it has no working capital. According to the company representative, although it is difficult, the company cannot dissolve because if it dissolves, it will be much more difficult to complete the procedures to receive tax refunds later. The "temporary withholding" of tens of billions of VND in value added tax has caused the company to lack financial resources, unable to fulfill export orders and continuously lose customers.

Previously, in 2023, many wood industry enterprises also reported that getting a VAT refund was "as difficult as reaching the sky". For example, Fococev VN Joint Stock Company was delayed in refunding VND355 billion and had submitted 29 tax refund dossiers from June 2020 to February 2023. Some enterprises said they were "collateral damage" from enterprises that had closed down and fled their registered business addresses, while the tax refund dossiers required verification of invoices and documents of these enterprises.

According to lawyer Nguyen Quoc Toan, the VAT refund is actually the tax that the enterprise has paid when purchasing domestic goods to process for export. This means that the enterprise has advanced money to the state budget to "keep", so after the enterprise meets the regulations, the tax authority must be responsible for refunding. However, not all enterprises can meet the requirements for input purchase invoices to be refunded. Therefore, most of the applications are delayed due to failure to meet the requirements, or are stuck in the process of verifying invoices and documents. Especially at a time when the number of enterprises closing down or going bankrupt is up to thousands of enterprises every month.

"Verifying invoices is an internal matter of the tax industry. However, the tax industry must ensure that the law requires the processing of tax refund applications for businesses within 40 days. The responsibility of the tax industry is not only to collect taxes correctly, fully, and promptly, but also to be responsible for fighting tax evasion, fighting tax fraud, especially fighting the appropriation of the state budget through value-added tax refunds. If the state budget is not thoroughly investigated and verified, then tax officials will be held responsible. In reality, there are no regulations on how tax authorities that delay tax refunds will be handled," said lawyer Toan.

According to Mr. Dau Anh Tuan, Deputy General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI), the delay in VAT refunds has greatly affected the capital flow for production and business, causing huge losses for businesses. In particular, the time required to verify documents is often prolonged and many businesses report that "they do not know when it will be completed".

Source: https://thanhnien.vn/co-nen-hoan-xuat-canh-lanh-dao-dn-vi-no-chua-toi-1-trieu-dong-tien-thue-185240520232133915.htm