Vietnam Ministry of Finance proposes tax penalty reductions

The Vietnamese Ministry of Finance is proposing a special resolution to resolve issues regarding inactive tax identification numbers and ease difficulties for taxpayers. The proposal aims to accelerate a campaign to ‘clean up’ tax records, potentially affecting over 753,000 taxpayers who have been inactive for more than 10 years.

Under the proposal, businesses and organizations in status 03 (ceased operations but not yet terminated tax IDs) or status 06 (not operating at registered addresses) could receive significant reductions in administrative penalties for late tax filings. The proposed penalty rates depend on when the missing documents are completed: 30% of the current fine if completed by June 30, 2027; 50% if completed between July 1, 2027, and December 31, 2027; and 70% if completed between January 1, 2028, and June 30, 2028.

For business households and individuals using the presumptive tax method, the draft suggests no penalties for tax procedural violations. For those using the declaration method, penalties would be set at 50% of the current rate if missing documents are submitted by June 30, 2028. These relief measures will not apply to cases involving tax evasion, ongoing investigations, or the use of illegal invoices and documents.