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Exit suspension of company managers in Vietnam: Key tax-related cases from July 2026

Byadmin_skarlet

“Can a company with no outstanding tax debts still result in its legal representative being subject to exit suspension?”

This is a notable issue addressed in Official Letter No. 5622/CT-NVT on the implementation of exit suspension in accordance with Decree No. 252/2026/ND-CP, issued by the Tax department on 5 August 2026 (“Official Letter 5622”).

In the course of business operations, company managers are often required to travel overseas for business trips, meetings with business partners, contract negotiations, or investment transactions. However, one legal risk that businesses and their managers should pay particular attention to is exit suspension in connection with the fulfillment of tax obligations.

Accordingly, tax compliance management is no longer merely a matter of tax penalties, late payment interest, or tax enforcement measures applicable to the company. It may also give rise to a direct risk to the international mobility of the company’s managers.

1. Exit suspension where a company is not operating at its registered address

According to the guidance under Official Letter 5622, where a company or cooperative is determined to be not operating at its registered address (Status 06), certain relevant individuals may be subject to exit suspension, including [1]:

  • The individuals who are the beneficial owner of the company; and
  • The legal representative of the company, cooperative, or cooperative union.

If, within 120 days from the date on which the tax authority issues the relevant notification, the taxpayer fails to carry out procedures for restoration of its tax identification number or termination of the validity of its tax identification number, the above-mentioned individuals will fall within the cases subject to exit suspension.

A particularly important point is that the application of exit suspension in this case does not depend on whether the taxpayer has any outstanding tax liabilities [2].

2. Exit suspension due to outstanding tax debts

For companies, cooperatives, and cooperative unions that are operating, temporarily suspending business operations, or awaiting dissolution, exit suspension may be imposed on an individual who is the beneficial owner of the company or the legal representative where the company falls within the circumstances subject to enforcement of an administrative decision on tax administration, and:

  • The outstanding tax debt is VND 500 million or more; and
  • The relevant tax debt has been overdue for 120 days or more from the statutory payment deadline [3].

3. When will exit suspension be cancelled?

Exit suspension will be cancelled when the taxpayer satisfies the conditions prescribed by law, specifically as follows:

For taxpayers classified under Status 06, the cancellation of exit suspension may also be associated with the restoration of the tax identification number or termination of the validity of the tax identification number, depending on the circumstances [4].

For companies, cooperatives, and cooperative unions that have been subject to exit suspension due to tax debts of VND 500 million or more that have remained overdue for the prescribed period, the tax authority will issue a notice cancelling the exit suspension when the taxpayer fulfills its tax obligations and reduces the total outstanding tax debt to below VND 500 million, or the outstanding tax debt is written off in accordance with applicable regulations [5].

4. The process for cancelling exit suspension has been automated

Another notable development in the implementation of the exit suspension mechanism is that the Tax department and the Immigration department have upgraded their respective systems to enable the automated processing of exit suspension cancellation.

According to Official Letter 5622, the system is capable of automatically reconciling tax payment obligations immediately upon receipt of payment documentation from commercial banks, thereby enabling the timely cancellation of exit suspension [6].

In particular, the system is designed to:

  • automatically reconcile and credit the taxpayer’s payment against its tax obligations immediately upon receipt of the State budget payment documentation from the commercial bank;
  • automatically determine whether the taxpayer satisfies the conditions for cancellation of exit suspension;
  • automatically generate a notice of cancellation of exit suspension, digitally sign the notice on behalf of the tax authority, and transmit the relevant information to the system of the Immigration department; and
  • enable the Immigration department’s system to automatically receive and process the exit suspension cancellation information upon receipt of the relevant notification from the tax authority’s system.

According to the process set out in Official Letter 5622, the maximum processing time of the tax authority’s system is eight (8) minutes, calculated from the time the tax payment documentation is received until the notice of cancellation is transmitted to the system of the Immigration department. The Immigration department’s system has also been upgraded to receive and process the relevant information within approximately five (5) minutes at air border checkpoints.

5. What Should Businesses Do?

In the context of increasingly integrated tax administration and immigration management systems, businesses should proactively review and monitor:

  • The company’s operating status and registered address;
  • The status of the company’s tax identification number;
  • Outstanding tax liabilities and the due dates applicable to each outstanding amount;
  • Information relating to the company’s legal representative and beneficial owner;
  • Notifications issued by the tax authority through the electronic tax system/eTax Mobile; and
  • The company’s tax obligations before its legal representative or beneficial owner undertakes overseas business trips, investment activities, or relocation abroad.

Proactive review and timely settlement of tax obligations will not only help businesses mitigate the risk of being subject to tax enforcement measures, but will also contribute to safeguarding the lawful rights and interests of the company’s legal representative and beneficial owner.

Legal References

[1] Decree No. 252/2026/ND-CP detailing certain Articles and measures for the organization and implementation of the Law on Tax Administration dated 30 June 2026 (“Decree 252”), Article 28.1(c).

[2] Official Letter 5622, Section 1.1.1.

[3] Decree 252, Article 28.1(b).

[4] Official Letter 5622, Section 1.1.2.

[5] Decree 252, Article 28.5(a1).

[6] Official Letter 5622, Section 3.5.

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