Vietnam Proposes Tax Debt Relief for 2.5 Million Inactive Taxpayers

VND27.805 trillion backlog drives proposed relief

Vietnam is proposing to cancel old business license fees and offer conditional relief from late payment charges to taxpayers whose businesses have stopped operating but whose tax records remain unresolved. The Finance Ministry puts their outstanding debt at VND27.805 trillion, including VND18.09 trillion in principal and VND9.715 trillion in late payment charges.

As of October 23, 2026, the tax system recorded 2,518,440 taxpayers in two inactive categories. The proposed National Assembly resolution would help eligible taxpayers either restore their tax identification numbers and resume business or complete the procedures to close them.

The Government approved the draft submission package through Resolution 364 on November 12, authorizing Finance Minister Ngo Van Tuan to submit it to the National Assembly Standing Committee on behalf of the Prime Minister. Parliamentary approval, the final starting date and the scope of accompanying procedural changes remain pending: the submitted proposal specifies November 21, 2026, while the Finance Ministry's October consultation text proposed taking effect upon National Assembly approval.

The Ministry of Finance's draft policy outline, published on the Government's policy portal, sets out two different routes. Eligible business license fee debts would be removed using tax records, without a separate application. Relief from late payment charges on other liabilities would require full payment of principal and valid documents to restore or terminate the tax identification number.

June 30, 2028, is the proposed deadline for meeting those conditions. For a former business owner, the practical offer is straightforward: settle the underlying liability and complete the required paperwork, and accumulated late payment charges could be cancelled.

Who falls into the two inactive categories?

Status 03 means a taxpayer has stopped operating without completing the procedures to terminate the tax identification number. Status 06 means the tax authority has determined that the taxpayer is no longer operating at the registered address.

The October figures include 643,383 taxpayers in status 03, comprising 211,802 enterprises and organizations and 431,581 household businesses and individuals. More than 1.8 million others were in status 06. These administrative labels matter because eligibility would be assessed against the taxpayer's status when the resolution takes effect.

Many unresolved cases stretch back years. Ministry figures put 529,041 taxpayers in the group inactive since 2015 or earlier, about 21% of the October total. Other ministry figures place the number inactive for more than a decade above 753,000; the reason for that difference has not been explained.

Tax authorities completed 777,835 tax identification number closures during the first 10 months of 2026, including 143,786 enterprises and organizations and 634,049 household businesses and individuals. Even after that work, millions of records still require attention.

Which business license debts would disappear?

The draft would write off eligible business license fees incurred through December 31, 2025, together with associated late payment charges. Tax authorities would use information already held in the tax management system, so taxpayers would not need to file a separate request for this relief.

Eligible obligations through the same date that were never declared or recorded would also be waived. Taxpayers would no longer have to declare or pay those fees, and related late payment charges would not be calculated.

Vietnam abolished business license fee collection from January 1, 2026, under National Assembly Resolution 198/2025/QH15. Previously, annual fees generally ranged from VND1 million to VND3 million, depending on registered capital. The proposed write off addresses liabilities left from before abolition.

The Finance Ministry's later figures put unpaid business license fees at approximately VND1.45 trillion across 764,000 taxpayers at the end of 2025; an earlier estimate for taxpayers in statuses 03 and 06 put the amount at VND1.25 trillion across about 710,000 taxpayers.

The ministry also estimated that recording further historical fee obligations during inactivity for nearly two million taxpayers could generate about VND15 trillion in liabilities. Its argument for relief is that many former businesses have neither income nor assets available to pay, while collection itself consumes administrative resources. Tax authorities have proposed completing the automatic fee write offs within six months of the resolution taking effect.

Other late payment relief comes with conditions

Taxpayers seeking cancellation of late payment charges on other debts would need to satisfy two requirements by June 30, 2028: pay all principal covered by the rules and submit a complete, valid application to restore or terminate their tax identification number. The tax authority must receive that application by the deadline.

Principal means the underlying amount owed. Under this draft, it includes taxes, administrative penalty amounts collected by tax authorities and other revenue specified in Article 38(1)(a) and (b) of the Law on Tax Administration. Business license fee debts being written off would be excluded from the repayment requirement.

Eligible relief would cover late payment charges accumulated up to the day the principal is fully paid. Taxpayers who already have no principal outstanding could also have their remaining late payment charges cancelled, with the tax authority checking and confirming their account balance.

The Government's published draft explanation also protects applications from administrative delays. If both repayment and document requirements are met on time, officials could finish processing the relief or tax identification procedure after June 30, 2028.

Taxpayers previously granted late payment relief under Resolution 94/2019/QH14 would not have to cancel that earlier decision when they satisfy the new conditions. Covered debts already paid would not be refunded or offset where restoration or closure of the tax identification number was completed before the new resolution takes effect.

Fraud cases and continuing businesses face exclusions

Debts connected with tax evasion, tax fraud or illegal invoices and documents would be excluded. The proposal would also exclude debts related to cases undergoing inspection, investigation, prosecution or trial.

Taxpayers that continued production or business, or incurred related tax obligations during their recorded period of inactivity, would generally be outside the conditional relief. The official consultation text preserves an exception for business license fees and their related late payment charges.

The November 1 draft also excludes inactive branches, representative offices and business locations where the parent enterprise or organization remains operational or has temporarily suspended business for a specified period.

These conditions make checking actual business activity central to implementation. The Government would be responsible for acting against misuse, including false claims about periods of inactivity, while avoiding additional conditions or paperwork beyond the resolution.

Why debt relief alone may leave businesses stuck

A business that has stopped trading can still face years of missing declarations, invoice records and financial statements when seeking formal closure. Tax consultant Nguyen Van Duoc said reducing the financial cost of dissolution would help, but extensive paperwork would remain a barrier.

The Finance Ministry illustrated the burden with a business inactive for 10 years. It could still need to submit about 40 value added tax returns and 10 corporate income tax finalization files. The ministry estimated a potential bill of VND55 million: VND23 million in penalties for late filing, VND20 million in business license fees and VND12 million in late payment charges on those fees.

Duoc proposed amendments to the Law on Tax Administration and the Law on Enterprises allowing dissolution documents to take effect retrospectively from the date the tax authority first recorded that the business was absent from its registered address. That would concentrate the work on tax finalization for dissolution.

A companion draft Government resolution seeks to reduce some of this paperwork. It would waive specified returns for periods without tax obligations after an official notice of absence from the registered address, and in certain cases after a registration certificate or operating license was revoked. Final tax returns up to revocation would still be required.

Millions of returns and lower filing penalties

The ministry's impact assessment estimates that roughly 23.38 million tax returns could be waived under the special procedures, including about 18.2 million value added tax returns and 4.55 million corporate income tax returns. Estimated savings from preparing and filing documents amount to approximately VND3.256 trillion.

The companion proposal also offers reduced penalties for outstanding returns that still must be submitted. Eligible taxpayers completing them by June 30, 2027, would pay 30% of the normal penalty. The proportion would rise to 50% for filings completed from July through December 2027, and 70% from January through June 2028.

Household businesses using the presumptive tax method, under which tax is assessed using an estimate of business activity, would receive an administrative penalty exemption after submitting outstanding returns. Special reductions are also proposed for household businesses and individuals using the declaration method. Existing formal penalty decisions would be excluded from the proposed reductions.

The ministry modeled approximately 1.61 million late returns carrying ordinary penalties of VND18.101 trillion. Its alternative scenarios estimate reductions of VND12.671 trillion, VND9.138 trillion or VND5.603 trillion, depending on the applicable payment proportion. Each scenario measures the same pool of filings under a different rate.

The Vietnam Chamber of Commerce and Industry, or VCCI, wants the return exemption to cover all periods of actual inactivity. It says an official status 06 notice can arrive one to three years after trading stopped, leaving businesses responsible for returns during the gap. VCCI proposes checking electronic invoice data alongside confirmation from local authorities or tax officials.

Business groups seek relief for unrecoverable principal

VCCI argues that some taxpayers will never be able to satisfy the full repayment condition. It has requested debt freezing or cancellation in cases involving a deceased or missing owner, loss of legal capacity, or completed bankruptcy proceedings without assets available for repayment.

VCCI also proposed cancelling principal below VND20 million for household businesses and individuals, and below VND50 million for micro enterprises inactive for more than five years, after asset checks establish that collection is no longer possible.

The Finance Ministry has declined to add cancellation based on those monetary thresholds. It says the proposal requires assessment of the number of taxpayers involved, their assets, collection costs, the effect on revenue and the risk of misuse.

The ministry points instead to Article 21 of the 2025 Law on Tax Administration, which provides debt cancellation routes for qualifying cases, including certain deceased individuals without assets and bankrupt entities that have completed required debt payments but retain no assets. Eligible cases would follow those legal provisions.

For taxpayers able to repay, the proposed bargain concerns a substantial portion of their balance: VND9.715 trillion in late payment charges accounts for about 35% of the VND27.805 trillion total, while principal accounts for about 65%. The ministry hopes waiving the charges will encourage payment of difficult debts and reduce the cost of maintaining unresolved accounts.

Closing a tax number also affects travel and business records

Unresolved tax status can affect more than a closure application. Nguyen Dinh Minh Tri, a Vietnamese businessperson living in Houston, said he faced a temporary restriction on leaving Vietnam because his former company, USV in Hanoi, had not completed tax identification closure despite having no tax debt. The company had stopped operating nearly 20 years earlier. The restriction was cancelled on November 11.

Decree 252/2026 permits temporary exit restrictions on legal representatives of enterprises in status 06. VCCI wants procedural address violations removed as a sufficient basis and has proposed requiring a specified debt, valid notice and deliberate failure to comply. Its suggested thresholds are above VND200 million for individuals and household businesses and above VND1 billion for enterprises.

Lawyer Tran Xoa, director of Minh Dang Quang Law Company, has proposed an account for temporarily receiving disputed or newly discovered payments at airports, allowing authorities to consider resolving restrictions within one or two hours. Le Van Tuan, director of Keytas Tax Accounting Company, supports direct notices through available communication channels before people travel.

VCCI also seeks protections for people whose identities were used without permission to register businesses, including action within 30 days after tax authorities receive police confirmation that a complaint is being handled. It wants automatic data exchange between tax and business registration agencies so that completing one procedure promptly updates the other system.

A shorter route to closure remains under debate

The companion proposal includes a closure route for taxpayers inactive for at least 10 years, without outstanding tax debt and outside specified enforcement proceedings. VCCI wants that threshold reduced to five years and a faster route after 12 months for businesses that filed dissolution documents or lost their registration certificates, provided they have no tax debt or complaints.

VCCI proposes extending public notice before closure from 30 to 60 days for companies and cooperatives, with notices on both tax and national business registration portals. That would give creditors and commercial partners more time to raise objections.

Even a small credit balance can complicate closure. VCCI has proposed allowing taxpayers to voluntarily surrender overpayments of VND10 million or less, avoiding a refund procedure before their tax accounts can be settled.

The main dates in the proposed program are:

• January 1, 2026: Business license fee collection ended under Resolution 198/2025/QH15.
• November 12, 2026: The Government approved the draft submission package through Resolution 364.
• November 21, 2026: Proposed starting date in the submitted resolution.
• June 30, 2027: First proposed deadline for the lowest late filing penalty proportion.
• June 30, 2028: Deadline for principal repayment and receipt of valid restoration or closure applications.
• Final National Assembly session of 2028: The Government would report implementation results.

For former owners such as Hanoi glass painting entrepreneur Nguyen Ngoc Hung, whose tax number remains in status 03, the practical goal is to finish old obligations and regain the opportunity to start a business. Achieving that requires both an affordable settlement and procedures that can be completed when accounting records and staff are long gone.

Key Points

• Vietnam proposes relief for eligible taxpayers among more than 2.5 million unresolved inactive tax accounts.
• Business license fee debts through December 31, 2025, and associated late payment charges would receive automatic relief.
• Other late payment relief would require full principal repayment and valid tax identification documents by June 30, 2028.
• Fraud, evasion and specified enforcement cases would be excluded.
• Companion measures would waive eligible returns and reduce some late filing penalties.
• VCCI seeks faster closure procedures, broader paperwork relief and changes to travel restrictions.
• The proposals require final approval before taxpayers can use the new measures.