CIRCULAR

GUIDING THE ENFORCEMENT OF TAX ADMINISTRATIVE DECISIONS

Pursuant to the Law on Tax Administration of November 29, 2006;
Pursuant to the current tax laws and ordinances;
Pursuant to the 2002 Ordinance on Handling of Administrative Violations; the Government’s Decree No. 37/2005/ND-CP of March 17, 2005, stipulating procedures for application of measures to enforce decisions on sanctioning of administrative violations;
Pursuant to the Government’s Decree No. 98/2007/ND-CP of June 7, 2007, on handling of violations of tax law and enforcement of tax administrative decisions;
Pursuant to the Government’s Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
The Ministry of Finance guides the enforcement of tax administrative decisions as follows:

A. GENERAL PROVISIONS

I. SCOPE AND SUBJECTS OF APPLICATION

1. Scope of application: This Circular guides the implementation of principles, order and procedures for application of enforcement measures and the competence to enforce tax administrative decisions provided for in the Law on Tax Administration, the Government’s Decree No. 98/2007/ND-CP of June 7, 2007, on handling of violations of law tax and enforcement of tax administrative decisions (below referred to as Decree No. 98/2007/ND-CP) and current legal provisions on handling of administrative violations.

2. Subjects of application: Taxpayers, tax offices, state agencies, other organizations and individuals involved in the enforcement of tax administrative decisions defined in Clause 2, Article 31 of Decree No. 98/2007/ND-CP.

II. CASES IN WHICH TAXPAYERS ARE SUBJECT TO ENFORCEMENT OF ADMINISTRATIVE DECISIONS

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2. Upon the expiration of the time limit for voluntarily abiding by or the duration of suspended implementation of tax administrative decisions, taxpayers that fail to abide by these decisions, remedy consequences or pay taxes or fines into the state budget or that commit acts of dispersing assets or fleeing away to shirk tax or fine payment are subject to enforcement of these decisions in the following cases:

a/ They delay paying taxes or fines for violations of tax law for more than ninety (90) days past the prescribed payment deadline;

b/ They fail to pay taxes or fines for violations of tax law upon the expiration of the extended time limit for payment of taxes or fines into the state budget under regulations;

c/ They fail to pay taxes or fines for violations of tax law and commit acts of dispersing assets or fleeing away.

The time limit for voluntarily abiding by a tax administrative decision guided in this Clause covers also an extended time limit for tax payment specified in Article 24 of Decree No. 85/2007/ND-CP of May 25, 2007, detailing the implementation of a number of articles of the Law on Tax Administration, and a duration of suspended implementation of a decision on sanctioning of tax law violation specified in Article 26 of Decree No. 98/2007/ND-CP.

III. PRINCIPLES FOR APPLICATION OF MEASURES TO ENFORCE TAX ADMINISTRATIVE DECISIONS

1. Measures to enforce tax administrative decisions specified in Article 33 of Decree No. 98/2007/ND-CP may be applied only upon the expiration of the time limit for abiding by, or the duration of suspended implementation of, tax administrative decisions under the Law on Tax Administration and legal documents guiding the implementation of this Law.

2. In the course of collection of information for use as a basis for issuance or organization of implementation of decisions on enforcement of tax administrative decisions by persons competent to issue such decisions, if taxpayers subject to enforcement of tax administrative decisions voluntarily remedy consequences and pay fully payable tax or fine amounts into the state budget, the procedures for enforcement will terminate.

3. Measures to enforce tax administrative decisions shall be applied in the order specified in Clause 1, Article 93 of the Law on Tax Administration. Subsequent enforcement measures shall be applied when the above-said measures cannot be applied or have been applied but tax or fine amounts are not fully collected under tax administrative decisions.

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5. Deduction of money from accounts and distraint of assets of taxpayers subject to enforcement of tax administrative decisions must be conducted in strict accordance with law.

6. The issuance of decisions on enforcement of tax administrative decisions and organization of enforcement of tax administrative decisions issued by lower-level authorities comply with the provisions of Article 36 of Decree No. 98/2007/ND-CP.

7. Counting of the time limit for carrying out procedures for enforcing tax administrative decisions:

7.1. If the time limit is counted in days, these days must be consecutive calendar days, including weekends and holidays.

7.2. If the time limit is counted in working days, these days must be working days of state administrative agencies as prescribed by law, i.e. calendar days other than weekends (Saturdays and Sundays), holidays and calendar and lunar New Year days (collectively referred to as weekends and holidays).

7.3. If the time limit is counted from a given day, the day on which the time limit begins is the day following such given day.

7.4. If the final day of the time limit for carrying out enforcement procedures is a weekend or holiday prescribed by law, the time limit will expire on the day following such weekend or holiday.

IV. COMPETENCE TO ISSUE DECISIONS ON ENFORCEMENT OF TAX ADMINISTRATIVE DECISIONS

1. Competence to issue decisions on enforcement of tax administrative decisions of tax offices at all levels is as follows:

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a/ The director of the General Department of Taxation and directors of provincial-level Tax Departments are competent to issue decisions on enforcement of tax administrative decisions issued by them or their subordinates.

b/ Directors of district-level Tax Departments are competent to issue decisions on enforcement of tax administrative decisions they have issued.

1.2. For enforcement measures specified in Clause 7, Article 33 of Decree No. 98/2007/ND-CP: When finding it necessary to apply the measure of revoking business registration certificates, establishment and operation licenses or practice licenses of taxpayers under Clause 1, Article 102 of the Law on Tax Administration, heads of tax offices at all levels shall compile dossiers and documents for enforcement and notify and forward them to agencies competent to revoke such business registration certificates, establishment and operation licenses or practice licenses in accordance with law.

2. Presidents of provincial- or district-level People’s Committees are competent to issue decisions on enforcement of decisions on sanctioning of tax law violations within their scope of management.

V. SOURCES OF MONEY TO BE DEDUCTED AND ASSETS TO BE DISTRAINED OF ORGANIZATIONS SUBJECT TO ENFORCEMENT OF TAX ADMINISTRATIVE DECISIONS

Sources of money to be deducted and assets to be distrained of organizations subject to enforcement of tax administrative decisions shall be identified according to the law on handling of administrative violations and other relevant legal provisions.

VI. PROCEDURES FOR DELIVERY AND RECEIPT OF DECISIONS ON ENFORCEMENT ON TAX ADMINISTRATIVE DECISIONS

1. Persons competent to issue enforcement decisions and tax officers responsible for executing enforcement decisions shall deliver these decisions directly to enforced taxpayers at least five (5) working days in advance and get signatures of certification of these enforced taxpayers or persons receiving decisions on enforced taxpayers’ behalf. If it is difficult to deliver enforcement decisions directly to enforced taxpayers, these enforcement decisions may be sent via registered mail.

a/ If enforced taxpayers are absent from their places of work or residence, enforcement decisions may be delivered to heads of agencies where these taxpayers work or their relatives who have full civil act capacity and live together with them in a home. Persons receiving enforcement decisions on enforced taxpayers’ behalf shall undertake to hand these decisions promptly and directly to enforced taxpayers. The delivery and receipt of decisions on enforcement of tax administrative decisions must be certified with signatures of involved parties. The time when enforced taxpayers are considered receiving enforcement decisions is the time when persons receiving enforcement decisions on enforced taxpayers’ behalf undertake to hand these decisions to enforced taxpayers.

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2. Decisions on enforcement of tax administrative decisions must be sent to tax offices directly managing enforced taxpayers. The enforcement by the measure of asset distraint, must be notified to People’s Committees of communes, wards or townships where enforced taxpayers are headquartered or reside or agencies where they work at least five (5) working days before the enforcement is carried out for coordinated implementation.

3. When having grounds to believe that taxpayers subject to enforcement of tax administrative decisions show signs of dispersal of money in their accounts or their assets, persons competent to issue enforcement decisions shall immediately organize the implementation of enforcement decisions, skipping the procedures for delivery and receipt of enforcement decisions guided in this Section.

Grounds to determine that an enforced taxpayer shows signs of asset dispersal include: carrying out procedures for transfer, donation or sale of assets of big value, abnormally dispersing deposit account balances not related to ordinary transactions.

VII. RESPONSIBILITIES OF ORGANIZATIONS IMPLEMENTING DECISIONS ON ENFORCEMENT OF TAX ADMINISTRATIVE DECISIONS

1. Issuers of decisions on enforcement of tax administrative decisions shall organize the implementation of these enforcement decisions. Agencies organizing the enforcement shall coordinate with concerned agencies in assuring safety and order in the course of enforcement.

2. Presidents of People’s Committees of communes, wards or townships where enforced taxpayers are headquartered or reside shall direct concerned local agencies under their management to coordinate with one another in carrying out the enforcement of tax administrative decisions at the request of enforcement decision issuers or agencies organizing the implementation of enforcement decisions.

3. In order to assure order and safety and to receive assistance in the course of enforcing tax administrative decisions, enforcement decision issuers or agencies with prime responsibility for organizing the enforcement shall send their written requests to police offices of districts where enforced taxpayers reside or have assets subject to enforcement five (5) working days before the enforcement is carried out. Upon receiving such a written request, police offices shall coordinate with agencies with prime responsibility for enforcement in deploying sufficient forces to assure order and safety in the course of implementing enforcement decisions.

4. Individuals and organizations related to enforced taxpayers shall cooperate, upon request, with enforcement decision issuers or agencies with the prime responsibility for implementing enforcement decisions in implementing these decisions.

VIII. STATUTE OF LIMITATIONS FOR IMPLEMENTATION OF ENFORCEMENT DECISIONS

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2. If individuals or organizations subject to enforcement intentionally shirk or delay paying taxes or fines, the statute of limitations for implementation of enforcement decisions shall be recounted from the date of termination of shirking or delaying acts.

3. A decision on enforcement of a tax administrative decision ceases to be effective when the enforced taxpayer completely abides by that tax administrative decision and fully pays tax and fine amounts into the state budget or the tax office’s custody account opened at the State Treasury.

B. ENFORCEMENT MEASURES AND ORDER AND PROCEDURES FOR ENFORCEMENT OF TAX ADMINISTRATIVE DECISIONS

I. ENFORCEMENT BY THE MEASURE OF DEDUCTION OF MONEY FROM ACCOUNTS

1. Subjects of application

The measure of deduction of money from accounts is applied to enforced parties that are taxpayers or other organizations and individuals holding money amounts deposited by enforced parties which fail to voluntarily pay tax or fine amounts under tax administrative decisions and have money amounts deposited at the State Treasury, commercial banks or other credit institutions.

2. Verification of information on accounts of enforced subjects

2.1. Persons competent to issue decisions on enforcement of tax administrative decisions may collect and verify information on accounts of enforced parties, request the State Treasury, commercial banks or other credit institutions to supply information on these accounts, such as: identification numbers and balances of accounts and other relevant information. Persons competent to issue enforcement decisions shall keep confidential information on accounts of enforced parties supplied by the State Treasury, commercial banks or other credit institutions.

2.2. Parties subject to enforcement of tax administrative decisions are obliged to supply to persons competent to issue enforcement decisions information on places where their accounts are opened, identification numbers and signs of their accounts when so requested.

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3. Decisions on enforcement by deduction of money from accounts

3.1. A decision on enforcement by deduction of money from account must contain the following details: date (day, month, year) of its issuance; grounds for issuance; full name, position and working unit of its issuer; money amount to be deducted from the account of the enforced party for payment of tax or fine arrears and enforcement expenses (if any); reason(s) for enforcement by deduction of money from account; full name, tax identification number and identification number of account of the party subject to enforcement by account deduction; name and address of the State Treasury, commercial bank or another credit institution where the party subject to enforcement by account deduction opens his/her/its account; the tax office’s name, address and state budget revenue account or custody account opened at the State Treasury; the measure of transfer of money into the tax office’s state budget revenue account or custody account opened at the State Treasury; the implementation time limit and signature of the person competent to issue the enforcement decision, or seal of the enforcement decision issuing agency.

3.2. If a party subject to enforcement of a tax administrative decision opens deposit accounts at different State Treasury branches, commercial banks or credit institutions, the person competent to issue enforcement decisions shall base himself/herself on balances of these accounts to issue a decision on enforcement by deduction of money from one or several accounts in order to ensure full collection of tax and fine amounts.

3.3. Decisions on enforcement of tax administrative decisions by the measure of deduction of money from accounts shall be sent to enforced parties, the State Treasury, commercial banks and credit institutions where enforced parties open deposit accounts which are subject to enforcement, and tax offices directly managing these parties.

4. Responsibilities of the State Treasury, commercial banks and credit institutions where enforced parties open deposit accounts

4.1. To supply necessary written information on identification numbers and deposit balances of accounts opened by enforced parties at their establishments within three (3) days after being so requested by heads of tax offices.

4.2. Within five (5) days after receiving decisions on enforcement by deduction of money from accounts of enforced parties issued by competent persons, to freeze these accounts; carry out procedures for transfer of deducted sums of money into tax offices’ state budget revenue accounts or custody accounts opened at the State Treasury; and to notify such to agencies issuing enforcement decisions and enforced parties.

If enforced parties have fully paid tax and fine amounts by other measures, tax offices shall notify such to the State Treasury, commercial banks or credit institutions where enforced parties open their accounts, so that the latter can cease the freezing of these accounts and terminate the enforcement by deduction of money from accounts.

4.3. To notify in writing agencies that have issued decisions on enforcement of tax administrative decisions of the fact that past thirty (30) days after enforcement decisions are received accounts of enforced parties have no money for deduction and remittance of enforced tax and fine amounts into tax offices’ state budget revenue accounts or custody accounts opened at the State Treasury.

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II. ENFORCEMENT BY THE MEASURE OF WITHHOLDING OF PART OF SALARIES, WAGES OR INCOMES

1. Subjects of application

Withholding of part of salaries, wages or incomes is applied to taxpayers that are individuals delaying tax and fine payment, failing to voluntarily abide by tax administrative decisions and being subject to enforcement of these tax administrative decisions under Article 45 of Decree No. 98/2007/ND-CP in case these individuals have no deposit accounts at the State Treasury, commercial banks or other credit institutions or balances of their deposit accounts are zero or insufficient for tax and fine payment.

2. Verification of information on salaries and incomes

Persons competent to issue decisions on enforcement of tax administrative decisions shall organize verification of salaries and wages of individuals subject to enforcement of tax administrative decisions, and organizations or individuals paying salaries or incomes to enforced parties.

Enforced parties, organizations or individuals that manage salaries or incomes and concerned organizations and individuals shall supply information on incomes to heads of tax offices within three (3) working days after being so requested and take responsibility before law for supplied information.

3. Decisions on enforcement by the measure of withholding of part of salaries or incomes of individuals

3.1. A decision on enforcement by withholding of part of salary or income must clearly state the date (day, month, year) of its issuance; grounds for its issuance; full name, position and working unit of its issuer; full name and address of the individual subject to enforcement by withholding of part of salary or income; name and address of agency, organization or individual that manages salary or income of the enforced individual; withheld sum of money (according to the sum of money stated in the tax administrative decision and enforcement expenses calculated up to five (5) days before the enforcement is carried out) and reason(s) for withholding; name and address of the tax office and identification number of its state budget revenue account or custody account opened at the State Treasury, and mode of transfer of the withheld sum of money into this account; time limit for implementation and signature of the enforcement decision issuer and seal of the enforcement decision-issuing agency.

3.2. Enforcement decisions shall be sent to enforced individuals, agencies or organizations that directly manage salaries or incomes of enforced individuals and concerned agencies within five (5) working days.

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4.1. Total salary or income that serves as a basis for withholding is the total of salary amounts, amounts of salary nature, bonuses and other lawful incomes earned in a month.

4.2. The rate for withholding salary amounts and amounts of salary nature applicable to an individual must be between ten percent (10%) and thirty percent (30%) of the total of salary amounts, amounts of salary nature and monthly allowances of such individual. For other incomes, the withholding rate shall be based on actual incomes but must not exceed fifty percent (50%) of total incomes.

5. Responsibilities of agencies, organizations or individuals that are employing enforced individuals and managing their salaries or incomes

5.1. Agencies, organizations or individuals that are managing salaries or incomes of individuals subject to enforcement of tax administrative decisions shall withhold part of salaries or incomes of these individuals and remit withheld sums of money into tax offices’ state budget revenue accounts or custody accounts opened at the State Treasury according to decisions on enforcement of tax administrative decisions from the latest salary or income payment until tax and fine amounts are fully withheld under enforcement decisions, and at the same time notify enforcement decisions issuers and enforced parties thereof.

5.2. If labor contracts of enforced individuals terminate while tax and fine amounts have not yet been fully withheld under enforcement decisions, employing organizations shall notify enforcement decisions issuers thereof within five (5) working days after the termination of labor contracts;

5.3. If agencies, organizations or individuals that are managing salaries or incomes of individuals subject to enforcement of tax administrative decisions refuse to withhold salaries or incomes of enforced individuals under enforcement decisions, they shall be sanctioned for tax law violations under Article 17 of Decree No. 98/2007/ND-CP, on handling of tax law violations committed by related organizations and individuals.

III. ENFORCEMENT BY THE MEASURE OF ASSET DISTRAINT OR AUCTION OF DISTRAINED ASSETS

1. Subjects of application: Enforcement by the measure of asset distraint for auction is applied to parties subject to enforcement of tax administrative decisions under Article 49 of Decree No. 98/2007/ND-CP if the measure of deduction of money from accounts or withholding of part of salaries or incomes cannot be applied or if tax and fine amounts are not fully collected even though the measure of deduction or withholding has been applied:

1.1. Individuals or organizations that have no account at the State Treasury, commercial banks or other credit institutions or have accounts with zero or insufficient balances for implementation of decisions on enforcement of tax administrative decisions.

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1.3. Enforcement of tax administrative decisions by the measure of asset distraint is not applied to individuals who are under medical treatment (with certification of district-level healthcare organizations lawfully set up and operating).

2. The following assets are not subject to distraint

2.1. For individuals subject to enforcement of tax administrative decisions:

a/ Houses that are the sole residence of enforced individuals and their families. If an enforced individual has many houses, it is necessary to clearly identify and distrain a house that is of sufficient value for payment of tax and fine amounts due and enforcement expenses.

b/ Medications needed for disease prevention and treatment, food and foodstuffs for essential needs of individuals subject to enforcement of tax administrative decisions and their families;

c/ Necessary ordinary working tools used as principal or sole means of living of enforced individuals and their families.

Equipment of large value such as motorbikes, cars, ships, boats, machine cultivators or mills and other valuable working tools, may also be distrained for auction for implementation of enforcement decisions but auction proceeds will be partially left for enforced parties to procure other cheaper equipment.

d/ Ordinary clothes daily-life utensils necessary for individuals subject to enforcement of tax administrative decisions and their families according to minimum living standards in different localities, such as cooking utensils, dining sets, furniture and other ordinary articles of small value. Other home appliances or belongings, such as television sets, refrigerators, air conditioners, washing machines, computers, gold, silver or gem jewelry (except for wedding rings) shall also be distrained for enforcement of tax administrative decisions;

e/ Worshiping objects, relics, orders, medals, certificates of merit.

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a/ Curative medicines, vehicles, tools and assets of healthcare establishments, medical examination and treatment establishments, except for assets used for business purposes; food, foodstuffs, tools and assets used to serve mid-shift meals for laborers;

b/ Kindergartens, schools and their equipment, vehicles and furniture, which are not used for business purposes;

c/ Labor protection, fire, explosion and environmental pollution prevention and fighting equipment and devices;

d/ Important infrastructure works for public utility or in service of security or defense;

e/ Raw materials, materials, finished products and semi-finished products that are toxic or hazardous chemicals or assets banned from circulation;

f/ Raw materials, materials, semi-finished products currently in closed production chains.

2.3. For enforced state agencies or organizations that are funded with the state budget, their assets directly allocated by the state budget are not distrained but they are asked to request in writing competent agencies to provide financial supports for implementation of enforcement decisions.

If these organizations have revenues from other lawful activities, their assets originating from these revenue sources shall be distrained for implementation of enforcement decisions, except for the following assets and goods:

a/ Curative medicines, vehicles, tools and assets of healthcare or medical examination and treatment establishments, unless they are circulated for business purposes; food, foodstuffs, tools and assets used to serve mid-shift meals for their officials and employees;

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c/ Labor protection, fire, explosion and environmental pollution prevention and fighting equipment and devices;

d/ Working offices.

3. Verification of information on assets of enforced parties

3.1. Persons competent to issue decisions on enforcement by the measure of asset distraint for auction shall verify enforced parties’ conditions for implementation of enforcement decisions. Local administrations, asset ownership or use right registry offices, security transaction registry offices and concerned organizations and individuals shall create conditions and supply necessary information as required by law for enforcement-conducting agencies to verify conditions for implementation of enforcement decisions.

Persons competent to issue enforcement decisions shall ascertain enforced sums of money, which are considered collectible, by directly checking assets and documents on capital and asset management, and verifying, in coordination with other agencies such as capital or asset management agencies, business or asset registry offices, commercial banks, credit institutions and other concerned individuals and organizations, asset conditions of enforced agencies or organizations.

3.2. The verification must be recorded in writing, clearly stating the responsibility of information suppliers. If staffs of organizations implementing enforcement decisions assist enforcement decisions issuers in verifying conditions for implementation of enforcement decisions, enforcement decision issuers shall check and take responsibility for verification results.

The verification must express the actual state of assets and economic conditions of enforced parties and the certification of People’s Committees and concerned organizations and individuals. The verification of assets subject to ownership or use right transfer or registration must be based on contracts on asset sale and purchase, exchange, transfer or donation, title deeds of assets; and the asset sale and purchase must be certified by owners, local administrations, functional agencies or witnesses. Verified information on assets subject to ownership or use right transfer or registration may be publicized so that persons with related rights and obligations can know and protect their interests.

For lawfully pledged or mortgaged assets not subject to distraint under the guidance in Section III, Part B of this Circular, distraining gencies shall notify pledgees or mortgagees of the obligations of enforced parties and request them to subsequently notify such to distraining agencies so that the latter can distrain assets as soon as pledgors or mortgagors fulfill their obligations under pledge or mortgage contracts.

4. Decisions on enforcement by the measure of asset distraint and auction of distrained assets

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A decision on enforcement by the measure of asset distraint must be sent to the individual or organization whose assets are to be distrained, the People’s Committee of the commune or ward where that individual resides or that organization is located or office where that individual works five (5) working days before the distraint is carried out, unless the decision-issuing agency has a ground to believe that the sending of the decision in advance may obstruct the distraint.

5. Procedures for asset distraint

5.1. Asset distraint must be carried out at day time and within working hours of administrative agencies in localities where asset distraint takes place, except for the case in which enforced parties are detected to have committed acts of dispersing or destroying assets or shirking implementation of enforcement decisions. In this case, persons competent to issue enforcement decisions may immediately organize the asset distraint so as to prevent these acts of enforced parties.

5.2. Enforcement decision issuers or persons assigned to implement enforcement decisions shall assume the prime responsibility for the distraint.

5.3. Before issuing decisions on asset distraint, decision issuers shall request asset ownership or use right registry offices to supply information on asset ownership or use rights of enforced parties; request security transaction registry offices to supply information on whether assets intended to be distrained are currently used as security for the performance of obligations of enforced parties toward obligees or whether assets managed or used by enforced parties are involved in financial hire-purchase. Within five (5) working days, these agencies shall supply necessary information in writing to enforcement decision issuers. If proceeds from the enforcement are determined to be insufficient to cover enforcement expenses, these agencies shall report such to superior tax offices so that the latter temporarily suspend the issuance of enforcement decisions (except for the case in which expenses for implementation of enforcement decisions are exempt or reduced under Clause 4.1, Section VI, Part B of this Circular).

5.4. When the asset distraint is underway, enforced individuals or adult members of their families or lawful representatives of organizations having their assets distrained, representatives of local administrations and witnesses must be present.

If enforced individuals or adult members of their families are intentionally absent, the asset distraint shall still be carried out in the presence of representatives of local administrations and witnesses.

In the course of asset distraint, distrained assets must be sealed and the asset sealing must be recorded in writing according to a form set in this Circular (not printed herein).

5.5. Enforced individuals and organizations may request certain assets to be distrained first. Persons with the prime responsibility for the distraint may accept these requests if they consider that these requests do not affect the implementation of enforcement decisions.

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5.6. In case of distraint of assets that are locked houses or packaged articles, organizations implementing enforcement decisions shall request enforced parties or persons currently using or managing those assets to unlock houses or unpack articles. If enforced parties or persons currently using or managing assets refuse to unlock or unpack or are intentionally absent, organizations implementing enforcement decisions shall make written records (in the presence of representatives of local administrations and witnesses) of the unlocking or unpacking for checking, enumeration and distraint of assets in accordance with law.

5.7. For distrained assets subject to ownership or use right registration, when issuing decisions on enforcement by the measure of asset distraint, persons with prime responsibility for implementing enforcement decisions shall promptly notify the following agencies of the asset distraint:

a/ Land use rights registry offices, agencies competent for registration of assets attached to land, in case of distraint of rights to use land and assets attached to land;

b/ Road vehicle registry offices, in case distrained assets are road motor vehicles;

c/ Other competent ownership and use right registry offices defined by law.

5.8. Upon receipt of notices on asset distraint, agencies in charge of asset ownership or use right registration shall cease registering the transfer of distrained assets, unless otherwise provided for by law.

Within three working days after the release of distrained assets or completion of the sale or handover of distrained assets for enforcement of tax administrative decisions, organizations implementing enforcement decisions shall notify such to asset ownership or use right registry offices or security transaction registry offices specified in Clause 5.7 of this Section.

5.9. Depending on each specific case, the asset distraint may be carried out as follows:

a/ Assets jointly owned by enforced individuals and other persons are distrained only when enforced individuals have no own assets or their own assets are insufficient for implementation of enforcement decisions

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c/ Only assets of enforced parties which are sufficient in value for implementation of enforcement decisions and payment of expenses for enforcement shall be distrained. If an enforced party has only one asset with a value larger than the obligation under the enforcement decision which is undividable or dividable but the division of this asset may significantly decrease its value, the distraining agency may still distrain this asset to assure the implementation of the enforcement decision.

d/ If an enforced party has a real estate under its private ownership and at the same time jointly owns a moveable asset with other persons and the value of his/her/its part in the jointly owned asset is sufficient for implementation of the enforcement decision, the enforcement decision issuer shall explain the right of the enforced party to request which asset to be distrained first for implementation of the enforcement decision.

Example 1: If an enforced party has its own asset being the sole residential house and jointly owns a car which is sufficient in value for implementation of the enforcement decision, the enforcement agency shall distrain the car for enforcement.

Example 2: If an enforced party jointly owns a car, which is the main means of livelihood of his/her family, with other persons and at the same time has a real estate (a house or land use rights), which is not his/her sole residence, the enforcement decision issuer may still distrain that real estate of the enforced party even though the value of the car is sufficient for implementation of the enforcement decision.

e/ If an enforced party requests distraint of his/her/its asset part in an asset jointly owned with other persons, the enforcement decision issuer may distrain that asset while ensuring the co-owners’ preemptive right to purchase that asset.

f/ If the enforced party has no other asset, the distraining agency may also distrain assets of the party, which is currently pledged or mortgaged if these assets are of a value larger than the secured obligation. The distraining agency shall notify the pledgee or mortgagee of the distraint.

g/ When conducting the asset distraint, the distraint organizer shall make a written record clearly stating the actual state of distrained assets and containing the commitment of the asset owner and signatures of parties involved in the distraint.

5.10. Past thirty days from the date of asset distraint, if enforced parties still fail to pay fully tax and fine amounts, tax offices may put distrained assets up for auction in order to fully collect tax and fine amounts and pay enforcement expenses.

6. Written records of asset distraint

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6.2. Persons with the prime responsibility for the distraint; representatives of enforced organizations having their assets distrained or individuals whose assets are distrained or their lawful representatives; witnesses; representatives of local administrations (or agencies managing enforced individuals) shall sign written records of distraint. If any of these persons is absent or refuses to sign the written record, the absence or refusal and its reasons must also be stated in the written record.

6.3. A written record of distraint shall be made in two (2) copies: one copy to be kept by the enforcement decision-issuing agency and the other sent to the individual whose assets are distrained or the representative of the enforced organization having its assets distrained immediately after the written record of asset distraint is completed.

7. Handover of distrained assets for preservation

7.1. Persons with the prime responsibility for distraint may choose one of the following modes of preserving distrained assets:

a/ Handover of distrained assets to enforced parties, their relatives or persons currently managing or using these assets for preservation.

b/ Handover of distrained assets to a co-owner if these assets are under joint ownership.

c/ If enforced parties, persons currently using or managing distrained assets or relatives of enforced parties refuse to take over these assets for preservation or when there are signs of dispersal or destruction of assets or obstruction of implementation of enforcement decisions, distrained assets shall be handed over to organizations or individuals that have proper conditions for preservation.

d/ Persons with the prime responsibility for asset distraint shall preserve dossiers and documents of title of distrained assets and ensure their safety throughout the course of enforcement.

7.2. Assets that are gold, silver, precious metals, gems or foreign currencies shall be put in sealed bags and handed over to the State Treasury for temporary management; assets that are weapons, explosives, radioactive substances, military technical equipment and tools and other industrial explosive materials, supportive tools, objects of historical or cultural value, national treasures, antiques or precious and rare forest products shall be handed over to specialized state management agencies for temporary management.

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The person with the prime responsibility for the distraint, the person who is handed over the asset for preservation, the enforced individual or representative of the enforced organization and the witness shall sign the written record. If any of them is absent or refuses to sign the written record, the absence or refusal and its reason must be stated in the written record.

Copies of the written record shall be sent to the person who is handed over the distrained asset for preservation, the enforced individual or representative of the enforced organization, the witness and the person with the prime responsibility for the distraint, one copy each.

7.4. Persons who are handed over distrained assets for preservation will get actual and reasonable expenses for asset preservation paid, except for those defined at Points 7.1.a and 7.1.b of this Section.

7.5. Persons who are handed over distrained assets but cause damage to, fraudulently exchange, lose or destroy these assets shall pay compensations and, depending on the nature and severity of their violations, be handled under tax law as prescribed in Decree No. 98/2007/ND-CP or examined for penal liability in accordance with law.

8. Valuation of distrained assets

8.1. Valuation of distrained assets shall be carried out at homes of enforced individuals or head offices of enforced organizations or places where distrained assets are kept (except for the case in which a valuation council is required to be set up).

8.2. When carrying out the asset distraint, the person with the prime responsibility for implementating the enforcement decision shall temporarily account the value of assets intended to be distrained corresponding to the value sufficient for payment of tax and fine amounts stated in the enforcement decision and enforcement expenses. He/she shall base on market prices of distrained assets and may at the same time consult functional agencies and involved parties to make temporary valuation of distrained assets.

After the distraint, if the involved parties can reach an agreement on the value of a distrained asset, the person with the prime responsibility for implementing the enforcement decision shall make a written record clearly stating that agreement and have it signed by involved parties.

8.3. Distrained assets shall be valued under an agreement between the person with the prime responsibility for implementing the enforcement decision and the representative of the enforced organization or the enforced individual, and co-owners in case of distraint of a jointly owned asset. The time limit for involved parties to reach an agreement on asset prices is five (5) working days after the assets are distrained.

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8.4. For a distrained asset valued at VND 500,000 or more and hard to value or the price of which cannot be agreed upon by involved parties, the enforcement decision issuer shall, within fifteen (15) days after the asset is distrained, request a competent authority to set up a valuation council to determine its value.

8.5. The asset valuation must be expressed in a written record, clearly stating the time and place of valuation, participants in the valuation, name and value of the valuated asset, and signed by participants in the valuation and asset owner.

9. Competence to set up a council for valuation of distrained assets

9.1. Presidents of district-level People’s Committees shall decide on setting up of valuation councils for cases in which the administrative enforcement falls within the competence of district- or commune-level state management agencies.

9.2. Presidents of provincial-level People’s Committees shall decide on setting up of valuation councils for cases in which the administrative enforcement falls within the competence of provincial-level state management agencies.

9.3. The setting up of valuation councils at central agencies shall be decided by ministers in charge after reaching agreement with the Minister of Finance and concerned ministries and branches.

9.4. Agencies directly organizing the enforcement of tax administrative decisions shall send written requests for setting up of distrained asset valuation councils to competent authorities within two (2) days after procedures for verification of information on assets are completed.

10. Valuation councils and their tasks

10.1. A valuation council is composed of the enforcement decision issuer as the council chairman and representatives of the finance agency and concerned specialized agencies as members. The person with the prime responsibility for implementing the enforcement decision may hire or invite experts to valuate assets. When requested by the person with the prime responsibility for implementing the enforcement decision, specialized agencies shall nominate their experts to participate in the valuation.

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Within seven (7) working days after being set up, the valuation council shall carry out the valuation. Individuals whose assets are distrained or representatives of organizations having their assets distrained may give their opinions on the valuation but the valuation council has the right to make the final decision on prices of distrained assets.

The asset valuation council shall base itself on market prices at the time of valuation and expert opinions of asset valuation agencies or organizations to determine prices of assets. The valuation council shall decide on asset prices by majority. If different sides have equal numbers of opinions on asset prices, opinions of the council chairman’s side shall be used as a basis for determination of reserve prices for asset sale. Members of the valuation council may reserve their own opinions and propose the head of the tax office to review the valuation. For assets the prices of which are subject to unified state management, the valuation shall be based on prices set by the State.

10.2. Tasks of valuation councils:

a/ To study and propose the organization and agendas of their meetings.

b/ To prepare documents necessary for valuation.

c/ To carry out asset valuation.

d/ To make written records of valuation.

11. Enforcement agencies may organize revaluation of assets in the following cases:

11.1. They have grounds to believe that valuation procedures are violated.

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11.3. Assets remain unsold after six months from the date of valuation.

12. Revaluation of assets

When finding it necessary to revaluate assets, agencies organizing the enforcement of tax administrative decisions shall notify in writing asset valuation councils of the organization of asset revaluation for coordination in revaluation, or invite lawfully established valuation agencies to conduct revaluation. The asset valuation under Points 11.1 and 11.2, Section III, Part B of this Circular shall be carried out as follows:

12.1. The asset valuation is regarded as having involved a procedure violation if it falls into one of the following cases:

a/ The valuation council is not composed of required persons.

b/ The enforced party is not duly informed to participate in the asset valuation.

c/ Regulations on asset prices are improperly applied to assets subject to unified state management of prices.

d/ There are serious errors or mistakes in the classification and determination of the residual value of assets (in percentage).

e/ Other cases specified by law.

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a/ Their prices fluctuate by twenty percent (20%) or more, for assets valued at under VND 100 million.

b/ Their prices fluctuate by ten percent (10%) or more, for assets valued at between VND 100 million and under VND one billion.

c/ Their prices fluctuate by five percent (20%) or more, for assets valued at VND one billion or more.

12.3. Enforced parties may request tax offices to reconsider asset prices upon a price fluctuation before making a public notice on auctioned assets. Tax offices shall base themselves on market prices and prices supplied by the price management agency to determine whether there is a price fluctuation and decide on revaluation.

13. Transfer of distrained assets for auction

13.1. For an asset distrained for auction, based on its value determined under Article 55 of Decree No. 98/2007/ND-CP, the person with the prime responsibility for enforcement shall, within thirty (30) days from the date of issuance of the decision on asset distraint, sign a contract on authorized auction with an organization with the auctioning function for organizing an auction of the asset under the following regulations:

a/ For a distrained asset already valued at under VND 20,000,000, the person with the prime responsibility for enforcement shall sign a contract on authorized auction with a district-level finance agency for organizing an auction.

b/ For a distrained asset already valued at VND 20,000,000 or more, the person with the prime responsibility for enforcement shall sign a contract on authorized auction with a provincial-level auctioning service center of the locality where that asset exists for organizing an auction.

13.2. The determination of reserve prices for auctioning assets is guided in the Ministry of Finance’s Circular No. 34/2005/TT-BTC of May 12, 2005, and Circular No. 13/2007/TT-BTC of March 6, 2007 of March 6, 2007, guiding the determination of reserve prices and handover of state assets for auction.

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13.4. For distrained assets that are bulky cargoes or of large quantities, for which provincial-level auctioning service centers or district-level finance agencies have no place for preservation, when handover procedures are completed, contracts for asset preservation may be signed with current keepers of these assets. Expenses for the performance of preservation contracts must be paid with asset auction proceeds.

13.5. After distrained assets are handed over to agencies responsible for auction, procedures for auctioning these assets shall be carried out under provisions of law on asset auction.

13.6. Co-owners of assets under joint ownership have the preemptive right to buy these assets first when they are auctioned.

13.7. If asset auction proceeds are larger than sums of money stated in sanctioning decisions plus expenses for enforcement, agencies conducting enforcement by distraint of assets for auction shall, within ten (10) days from the date of auction, carry out procedures for refunding the difference to enforced parties.

14. Transfer of asset ownership

14.1. Buyers of distrained assets have their rights to own and use these assets recognized and protected by law.

14.2. Competent state agencies shall carry out procedures for transferring asset ownership and use rights to buyers in accordance with law.

14.3. A dossier for ownership and use rights transfer comprises:

a/ A copy of the decision on administrative enforcement by distraint of asset for auction.

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c/ Other papers related to the asset (if any).

15. Proceeds from auction of distrained assets of enforced parties shall be handled in the following order:

15.1. Payment of expenses for enforcement and auction of distrained assets or assets recovered from current holders.

15.2. Remittance of sums of money equal to tax and fine amounts stated in the enforcement decision in the tax office’s state budget revenue account or custody account opened at the State Treasury.

15.3. Refund of the remainder (if any) to the enforced party.

IV. ENFORCEMENT BY RECOVERY OF SUMS OF MONEY OR ASSETS OF ENFORCED PARTIES CURRENTLY HELD BY THIRD PARTIES

1. Scope of application of the measure of enforcement by recovery of sums of money or assets of enforced parties currently held by third parties

The enforcement by recovery of sums of money or assets of enforced parties currently held by other organizations or individuals (below referred to as third parties) may be carried out according to relevant procedures applicable to each specific case specified in this Circular when the following conditions are fully satisfied:

1.1. Tax offices are unable to apply enforcement measures specified in Sections I, II and III, Part B of this Circular or have applied these measures but cannot yet fully collect tax arrear and fine amounts.                     

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2. Verification of information on sums of money and assets of enforced parties, conditions for implementation of decisions on enforcement by recovery of sums of money or assets currently held by other organizations or individuals for issuance of enforcement decisions comply with the guidance at Point 2 of Section I, Point 2 of Section II, and Point 3 of Section III, Part B of this Circular.

3. Individuals and organizations holding assets of enforced parties

Individuals and organizations holding sums of money, assets, goods, valuable papers and certificates of parties subject to enforcement of tax administrative decisions include:

3.1. Individuals, households or organizations that are entrusted by enforced parties to hold the latter’s sums of money, assets, goods or valuable papers and certificates or proved by tax offices with sufficient evidence to be currently holding assets of these kinds which are owned by enforced parties.

3.2. Individuals, households or organizations owe due debts to enforced parties.

4. Principles of recovery of sums of money and other assets of enforced parties from third parties

4.1. Third parties that owe due debts to enforced parties or hold sums of money or other assets of enforced parties shall pay tax arrear and fine amounts on enforced parties’ behalf;

4.2. If sums of money and other assets of enforced parties held by third parties are involved in security transactions or cases of bankruptcy, the recovery of these sums of money and other assets from third parties complies with legal provisions;

4.3. Sums of money paid by third parties into tax offices’ state budget revenue accounts or custody accounts opened at the State Treasury on enforced parties’ behalf are regarded as sums of money paid to enforced parties.

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4.4. For business establishments that no longer exist, are missing or terminate their operation but have not yet fulfilled their tax obligations toward the State, the fulfillment of their tax obligations toward the State complies with the guidance of the Ministry of Finance.

5. Responsibilities of third parties that owe debts to or are holding sums of money or other assets of enforced parties

5.1. To supply to tax offices information on debts or sums of money or other assets of enforced parties they are holding, clearly stating sums of money; time limit for debt payment; types, quantities and state of assets;

5.2. Upon receiving written requests of tax offices, not to return sums of money or other assets to enforced parties until the latter fully pay tax amounts and other payable amounts into the tax offices’ state budget revenue accounts or custody accounts opened at the State Treasury or hand over sufficient assets for payment of tax arrear amounts and other payable amounts into the state budget.

5.3. If failing to satisfy requests of competent agencies, to explain the failure in writing to these competent agencies within five (5) working days after receiving the latter’s written request;

5.4. If failing to pay enforced tax amounts on enforced parties’ behalf within fifteen (15) days after receiving requests of tax offices, they shall be considered owing tax amounts to the State and subject to enforcement measures specified in Article 33 of Decree No. 98/2007/ND-CP.

V. ENFORCEMENT BY WITHDRAWAL OF TAX IDENTIFICATION NUMBERS, SUSPENSION OF USE OF INVOICES; REVOCATION OF BUSINESS REGISTRATION CERTIFICATES OR ESTABLISHMENT AND OPERATION LICENSES OR PRACTICE LICENSES

1. Order for enforcement

1.1. The measure of withdrawal of tax identification numbers; suspension of use of invoices; or revocation of business registration certificates or establishment and operation licenses or practice licenses shall be applied only when tax offices are unable to apply enforcement measures of deduction of money from deposit accounts; withholding of part of salaries or incomes; distraint of assets and auction of distrained assets; or recovery of sums of money or assets of enforced parties held by other organizations or individuals, or when they cannot fully collect tax arrear and fine amounts though they have applied above measures.

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2. Enforcement by withdrawal of tax identification numbers, suspension of use of invoices

Heads of tax offices at all levels are competent to issue decisions on application of the measure of withdrawal of tax identification numbers, suspension of use of invoices. When applying this measure, heads of tax offices at all levels shall notify enforced parties thereof three (3) working days before withdrawing tax identification numbers and issue decisions on withdrawal of tax identification numbers or suspension of use of invoices within ten (10) days after notifying enforced parties.

3. Enforcement by revocation of business registration certificates or establishment and operation licenses or practice licenses

When applying the measure of revocation of business registration certificates or establishment and operation licenses or practice licenses of taxpayers, tax offices shall request in writing competent state management agencies to revoke business registration certificates or establishment and operation licenses or practice licenses within three (3) working days after identifying parties subject to the enforcement measure.

Within ten (10) days after receiving written requests of tax offices, competent state management agencies shall issue decisions on revocation of business registration certificates or establishment and operation licenses or practice licenses, or notify tax offices of non-revocation, clearly stating the reason.

VI. ENFORCEMENT EXPENSES

1. Specific expenses for implementation of enforcement decisions:

Expenses for enforcement include:

1.1. Expenses for mobilization of participants in implementing enforcement decisions.

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1.3. Expenses for enforcement guard: payments for persons directly participating in the guard (enforcement decision issuers, policemen, health workers, persons in charge of implementing enforcement decisions, representatives of local administrations and social organizations, etc.), expenses for purchase of fuels, hiring of vehicles, protection devices and medical instruments necessary for implementation of enforcement decisions.

1.4. Expenses for fire and explosion prevention and fight (if any): Hiring of fire engines, fire prevention and extinguishing devices, bomb and mine sweepers and other necessary fire and explosion equipment and devices.

1.5. Expenses for hired storage or preservation of distrained assets.

1.6. Expenses for asset valuation and auction: remuneration for members of valuation councils, expenses for assessment of assets (if any), rent of places and vehicles for organization of asset auction and public information, and expenses for asset revaluation; expenses for publishing information on asset auction on the mass media; expenses for hired storage and preservation of assets; expenses for hiring transportation of objects and assets subject to enforcement of tax administrative decisions;

1.7. Expenses for meetings of members of valuation councils for asset valuation or revaluation; payments for agencies, organizations and individuals directly participating in the enforcement of tax administrative decisions.

1.8. Other actual expenses for implementation of enforcement decisions (if any).

2. Expense levels:

2.1. Expenses for hired storage and preservation of assets; assessment of assets; rent of places and vehicles for organization of asset auctions; publishing information on asset auction on the mass media; hiring of transportation of objects and assets subject to enforcement, etc., shall be paid based on lawful and valid contracts, invoices and vouchers as prescribed.

2.2. Levels of other expenses comply with the State’s general regulations.

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3. Funds for payment of expenses for implementation of enforcement decisions

Expenses for enforcement shall be borne by enforced parties, which are estimated simultaneously with the issuance of enforcement decisions and settled upon completion of enforcement. If enforcement expenses payable by enforced parties have not yet been collected by tax offices, tax offices may pay in advance these expenses using the operating funds of the tax service and get these advances refunded right after collecting sums of money of individuals and organizations subject to administrative enforcement. The advance level must not exceed VND 30 million. For cases in which enforcement expenses are too great and allowed advances are insufficient, tax offices may report such to their superiors for consideration and permission for greater advances on a case-by-case basis.

4. Exemption from or reduction of expenses for enforcement

4.1. Enforced individuals may be considered for exemption from or reduction of enforcement expenses if they fall into any of the following cases:

a/ They encounter economic hardships: Individuals encountering economic hardships are those whose incomes are insufficient to ensure minimum living standards for their normal life or who face prolonged economic difficulties caused by natural calamities or fires. The minimum income level applicable under the guidance in Clause 4.1 of this Section is an income level determined according to the minimum salary level of state employees.

Decisions on consideration for exemption from or reduction of enforcement expenses shall be cancelled in case enforced parties are detected to have committed acts of dispersing or hiding money and assets in order to shirk the verification of their specific conditions for enforcement purposes.

b/ They are in families being social policy beneficiaries or with meritorious services to the revolution;

c/ They are supportless or disabled or suffer from prolonged illness.

4.2. Procedures for enjoying exemption from or reduction of enforcement expenses:

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a/ For enforced parties encountering economic difficulties caused by natural calamities or fires, certification of commune-level People’s Committees of localities where they reside or heads of agencies or organizations where they work is required.

b/ For enforced parties being families benefiting from preferential social policies or having made meritorious services to the revolution, procedures and dossiers as guided by current law for recognition of and entitlement of benefits to fallen heroes and their families, war invalids and persons entitled to preferential policies like war invalids or diseased soldiers are required.   

c/ For enforced parties being supportless or disabled persons or persons suffering from prolonged illness, certification of medical examination councils or competent healthcare authorities under the Ministry of Health’s regulations is required.

Applications and dossiers of application for enforcement expense exemption or reduction shall be filed with tax offices that have issued enforcement decisions.

4.3. Levels of enforcement expense exemption or reduction:

a/ Enforced individuals who have paid part of enforcement expenses but encounter prolonged exceptional economic difficulties caused by natural calamities or fires may be considered for non-payment of remaining enforcement expenses.

b/ Individuals defined in Clause 4.1 of this Section, except for those who encounter prolonged exceptional economic difficulties caused by natural calamities or fires may be considered for 50% reduction of payable enforcement expenses.

4.4. Heads of tax offices that issue enforcement decisions shall receive exemption or reduction requests, and consider and decide on enforcement expense exemption or reduction. Persons who are at fault in violating procedures for asset valuation or decision on enforcement expense exemption or reduction or improperly conducting the enforcement, causing a consequence that enforcement expenses are borne by the state budget, shall pay compensations to the state budget.

C. ORGANIZATION OF IMPLEMENTATION

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2. Enforcement of tax administrative decisions governed by the law on handling of administrative violations and not guided in this Circular complies with the law on handling of administrative violations and relevant laws.

3. Promulgated together with this Circular are appendices on forms of written records of working process, handover of dossiers and distrained assets, certification or enforcement of tax administrative decisions or decisions on enforcement of tax administrative decisions. In the course of conducting enforcement of tax administrative decisions, the General Department of Taxation shall base itself on the guidance of this Circular to set additional forms to ensure proper implementation of procedures for enforcement of tax administrative decisions.

In each specific case of application of different enforcement measures, appropriate forms may be used. Each form may be added with lines to fully describe items or activities arising in the course of carrying out procedures for enforcement of tax administrative decisions.

4. Any problems arising in the course of implementation should be promptly reported to the Ministry of Finance for study and provision of additional guidance.

FOR THE MINISTER OF FINANCE
VICE MINISTER




Truong Chi Trung