The Vietnam Chamber of Commerce and Industry (VCCI) has proposed restricting the use of temporary exit bans against legal representatives of businesses classified under tax status 06, which indicates that a taxpayer is no longer operating at its registered address.

The organization argues that such measures should not be applied indiscriminately, particularly when the only violation involves failing to notify authorities of a change in business address.

According to VCCI, temporary exit bans imposed on company representatives, even when their businesses owe relatively small amounts of tax or have merely failed to complete address-related procedures, have created significant difficulties for the business community.

These restrictions affect individuals' freedom of movement and their opportunities to seek employment, resume business activities and recover financially.

VCCI has therefore recommended that a National Assembly resolution clearly specify that temporary exit bans may be imposed only when tax debts exceed a defined threshold, the taxpayer has received a legally valid notification and the taxpayer deliberately refuses to fulfill their obligations.

As examples, VCCI suggested thresholds of more than VND200 million (approximately $7,600) for individuals and household businesses, and more than VND1 billion (about $38,000) for enterprises.

The organization previously proposed these thresholds in 2024 while commenting on a draft decree detailing provisions of the Law on Tax Administration concerning temporary exit bans.

What does an outdated business address actually indicate?

Tax status 06 means that a taxpayer is not operating at the address registered with the tax authorities.

However, this classification alone does not establish whether a business has ceased operations entirely or is continuing to operate elsewhere.

Tax authorities must determine whether the enterprise remains active, what tax liabilities it has outstanding and why the required administrative procedures have not been completed.

If a company has simply delayed reporting its new address, the appropriate response should be to require it to update its registration.

Before imposing an exit ban on its legal representative, tax authorities should be able to identify the specific tax debt that the restriction is intended to recover.

During a National Assembly discussion on the draft Law on Small and Medium-sized Enterprise Development on October 29, Finance Minister Ngo Van Tuan said that, as of August 2026, approximately 2.8 million tax identification numbers remained active in the tax system despite being associated with taxpayers classified under statuses 03 and 06.

Status 03 applies to taxpayers that have ceased operations but have not completed procedures to terminate the validity of their tax identification numbers.

The minister acknowledged that some cases involving businesses that ceased operations many years ago present complications beyond the authority of tax agencies to resolve.

According to a Ministry of Finance submission, more than 2.5 million taxpayers remained in these two categories as of October 23, 2026.

As of September 2026, late-payment charges accounted for 35% of the total outstanding tax debt associated with the two groups.

For unpaid principal tax liabilities, the ministry has proposed allowing taxpayers to be considered for cancellation of accumulated late-payment charges if they fully settle the principal debt and submit valid documentation concerning their tax identification numbers.

Removing penalties accumulated over many years could make it easier for former business owners to arrange repayment and complete outstanding administrative procedures.

The measure could also allow the state budget to recover some debts that might otherwise be difficult to collect.

Some taxpayers have already attempted to complete the required procedures but lack accounting records, invoices or digital signatures.

In such cases, tax authorities should examine the steps individuals have taken to resolve their files before reaching a conclusion.

Debt thresholds and proper notification are essential

Under VCCI's proposal, tax debts below the suggested thresholds would remain payable, and tax authorities would retain the power to pursue collection.

However, the existence of a debt would not automatically justify restricting the taxpayer's ability to leave the country.

The requirement for legally valid notification must also provide meaningful information to the recipient.

A company representative should be told exactly which taxes the business owes, which authority determined the liability and how much time is available to provide an explanation or remedy the situation.

If the business has corrected its registered address or disputes the amount of tax owed, the representative should know where to submit supporting documents and when to expect a response.

The taxpayer's feedback should form part of the official case file.

Individuals requesting debt reconciliation or submitting additional documents should also be informed whether their submissions have been received and how far the tax authority has progressed in processing them.

Protecting people whose identities have been misused

The need for clearer safeguards is particularly evident in cases involving identity misuse.

One individual in Hanoi reportedly faced a temporary exit ban because his name appeared in the registration documents of a breakfast restaurant in Ha Tinh Province.

According to information he submitted to the tax authorities through the eTax system, another person had used his identity to register the business.

For individuals reporting identity theft, a draft government resolution proposes temporarily suspending the application of exit bans once they have submitted written requests for assistance to the business registration or tax authorities and reported the matter to the police.

Under the proposal, the police must issue written confirmation that they have received the complaint and are investigating it, then forward that confirmation to the relevant business registration and tax authorities.

VCCI has recommended additional protections.

Within 30 days of receiving written confirmation from the police that a case has been accepted for investigation, tax authorities should lift tax enforcement measures imposed on the affected individual.

They should also coordinate with business registration agencies to temporarily suspend the individual's recorded status as a legal representative or business owner in the registration system.

The problem can extend beyond travel restrictions.

Even after an individual regains the ability to travel freely, their name may remain linked to a business under investigation.

This can create obstacles when opening bank accounts, applying for loans or registering a new enterprise.

Under VCCI's proposed approach, investigations into suspected identity misuse would continue, but the affected individuals would be able to resume normal business activities without their rights being restricted by inaccurate registration information.

Before requiring someone to postpone an overseas trip, tax authorities must establish the person's responsibility for the outstanding debt, verify that proper notification has been provided and ensure that the individual has had an opportunity to explain or resolve the matter.

Lan Anh