Vietnam tax authorities address inactive taxpayer status backlog

Vietnam's tax authorities have identified hundreds of thousands of taxpayers in problematic statuses: status 03 (ceased operations but failed to complete tax code termination procedures) and status 06 (not operating at the registered address). This issue is a cumulative backlog spanning multiple periods.

Nguyen Duc Huy, Deputy Head of the Professional Department at the Tax Department, identified several primary causes for this situation. First, while market entry procedures have been simplified, exiting the market through dissolution or termination remains complex, requiring multiple obligations to be met with tax, business registration, and other state management agencies. Difficulties arise when businesses have outstanding tax debts, fines, or late payment fees, or when there is no mechanism to handle cases where the subject is no longer available to process overpayments or uncollectible debts.

Second, taxpayer compliance is a significant factor. Many businesses cease operations or abandon registered addresses without notification to avoid complex dissolution procedures. In many instances, companies have dismantled their staff, returned premises, and lost access to accounting records, seals, or digital signatures. Furthermore, legal representatives may have passed away, gone missing, or become unreachable, leaving no entity to complete the necessary legal procedures.