New Exit Restrictions for Tax Debtors Starting 2025
Starting January 1, 2025, individuals with tax debts exceeding 50 million VND (around $2,100) and businesses owing over 100 million VND (approximately $4,200) for more than 120 days will face temporary exit bans. This policy could affect about 81,000 taxpayers.
Proposed Thresholds for Tax Debts
The Ministry of Finance has proposed a draft decree that establishes these debt thresholds. The aim is to align these figures with global standards while considering Vietnam’s economic conditions.
For individuals, the 50 million VND mark is set with reference to other countries, like Malaysia ($2,000) and the U.S. ($40,000). Given Vietnam’s average income of $4,284 in 2023, this threshold appears justified.
For businesses, the 100 million VND limit is lower than Taiwan’s benchmark of 1.57 billion VND and is crafted to fit Vietnam’s financial landscape.
The regulation will apply to debts overdue for over 120 days, allowing tax authorities to prioritize long-term evaders who are already in their database.
Current Tax Debt Landscape
Vietnam’s tax management system has approximately 380,000 individuals and business owners with tax debts of at least 10 million VND. Of these, around 81,000 owe more than 50 million VND.
In the business sector, nearly 40,000 companies have debts exceeding 1 billion VND, with many others owing between 100 and 500 million VND.
Officials estimate that the new thresholds would subject about 81,000 individuals to exit restrictions due to overdue tax debts.
The draft decree states that once tax debts are cleared, the tax authorities will electronically inform the immigration department, allowing for the lifting of travel bans within 24 hours.
To ensure smooth implementation by January 2025, the Ministry has fast-tracked the process of establishing this decree.
The measures include automated notifications and a swift 24-hour response window, aimed at alleviating any inconvenience for those who promptly settle their debts.
Ultimately, the Ministry of Finance aims to encourage timely tax payments and tackle existing tax evasion challenges, balancing enforcement with enhanced transparency and efficiency for taxpayers.