BACKGROUND
The core issue is the large and prolonged backlog of taxpayers (NNT) in the status of having ceased business operations but not yet completed the procedures for terminating the validity of their tax identification numbers (status 03), and taxpayers who are not operating at the address registered with the tax authority (status 06). As of 23 October 2026, the total number of taxpayers in these two statuses reached 2,518,440 cases, of which more than 529,000 cases have been inactive since 2015 or earlier (over 10 years).
Practical implementation of the “Clean Tax Identification Numbers – Removing Bottlenecks in Business” Campaign shows that substantive processing results remain limited. The main causes do not lie solely in compliance awareness but stem from policy bottlenecks: the obligation to submit full tax returns (including periods with no revenue) and the relatively high administrative penalties for late filing, which significantly increase compliance costs when taxpayers return to complete the procedures for terminating or restoring their tax identification numbers.
Therefore, a special mechanism of limited duration is needed to address difficulties related to tax returns and penalty levels, while definitively handling long-term inactive cases and protecting individuals whose information has been fraudulently used for business registration (Read the full Draft Resolution here: https://chinhphu.vn/du-thao-vbqppl/du-thao-nghi-quyet-cua-chinh-phu-ban-hanh-chinh-sach-dac-thu-nham-thao-go-kho-khan-cho-nguoi-nop-7954)
The draft Resolution consists of 4 Articles, providing special policies on: (1) tax returns; (2) reduction of administrative penalties for late filing of tax returns; (3) handling of tax identification numbers of taxpayers inactive for more than 10 years; (4) protection of individuals whose information has been fraudulently used; and (5) transitional provisions. The application period runs until 30 June 2028.
Scope of regulation and applicable subjects
The Resolution applies to: (a) Taxpayers determined by the tax authority to be in status 03 or status 06 as of the effective date of the Resolution; (b) Tax administration authorities, tax officials, and relevant agencies, organizations, and individuals.
Special policy on tax returns
This is the key policy aimed at reducing unnecessary compliance obligations. Specifically:
- Taxpayers in status 06 are not required to file tax returns for tax periods with no tax liability during the period of non-operation at the registered address as notified by the tax authority.
- Taxpayers in status 03 who have not completed the procedures for terminating the validity of their tax identification numbers are not required to file tax returns during the period when the competent authority has issued a Decision to revoke the Certificate of Business Registration / Cooperative Registration / Household Business Registration or equivalent document, except for the tax finalization return up to the date of revocation.
- They must still fully submit missing tax returns for periods prior to the above-mentioned time points and for periods generating tax liabilities thereafter.
- They are not required to prepare or submit invoice notices/reports until the effective date of Decree No. 123/2020/ND-CP when returning to complete the procedures for terminating the validity of their tax identification numbers.
- Taxpayers must commit and take legal responsibility for tax periods with no tax liability; the content of the commitment shall be stated in the dossier for restoration or termination of the validity of the tax identification number.
Table 1. Summary of conditions for exemption from filing tax returns
| Subject | Period exempt from filing returns | Exceptions / Remaining obligations |
|---|---|---|
| Status 06 | From the date the tax authority issues the notice of non-operation at the registered address. Periods with no tax liability | Must file missing returns for periods before the notice. Must file returns for periods with tax liability after the notice. Must provide a commitment of responsibility. |
| Status 03 | From the time the Certificate of Business Registration / Cooperative / Household Business or equivalent document is revoked | Except for the tax finalization return up to the revocation date. Must file missing returns for earlier periods. Must provide a commitment of responsibility. |
According to estimates in the Appendix attached to the Submission Report, this policy helps reduce approximately 23.38 million returns, equivalent to filing costs of about VND 3,255 billion.
Special policy on administrative penalty amounts (Article 3)
The policy is designed with a gradually decreasing support level to encourage taxpayers to remedy violations early:
Table 2. Schedule of reduced penalties for late filing of tax returns
| Time of filing missing returns | Applicable penalty rate (Enterprises/Organizations) | Remarks |
|---|---|---|
| From the effective date of the Resolution to 30 June 2027 | 30% of the penalty under Article 13 of Decree 125/2020 | Highest support level |
| From 1 July 2027 to 31 December 2027 | 50% of the penalty under Article 13 of Decree 125/2020 | Medium support level |
| From 1 January 2028 to 30 June 2028 | 70% of the penalty under Article 13 of Decree 125/2020 | Lowest support level |
For household businesses and individual business persons:
- Those paying tax under the lump-sum method: Not subject to penalties for tax procedure violations (pursuant to Clause 4, Article 9 of Decree 125/2020).
- Those paying tax under the declaration method: Subject to a penalty equal to 50% of the rate specified in Point a, Clause 1, Article 3 (i.e., 50% of 30% = 15% of the normal penalty rate) throughout the entire effective period of the Resolution.
Important note: The penalty reduction policy does not apply to acts showing signs of tax evasion or fraud, or the use of illegal invoices or documents; nor does it apply when the taxpayer is under inspection, investigation, prosecution, or trial for such acts.
Table 3. Estimated penalty reductions (according to the Appendix to the Submission Report)
| Filing period | Reduction rate | Estimated penalty amount reduced |
|---|---|---|
| Until 30 June 2027 | 70% (filing at 30% rate) | ≈ VND 12,671 billion |
| 1 July – 31 December 2027 | 50% (filing at 50% rate) | ≈ VND 9,137 billion |
| 1 January – 30 June 2028 | 30% (filing at 70% rate) | ≈ VND 5,603 billion |
Handling of tax identification numbers of taxpayers inactive for more than 10 years
For taxpayers who have ceased operations or have not been operating at the registered address for 10 years or more (as of the effective date of the Resolution), have no tax debts, and are not under inspection, investigation, prosecution, or trial, the tax authority may consider terminating the validity of the tax identification number according to the following procedure:
- Publicize information on taxpayers proposed for termination of tax identification number validity on the tax authority’s website for a period of 30 days.
- If no written request for restoration of the tax identification number is received and no written objection is received from relevant agencies, organizations, or individuals, the tax authority shall terminate the validity of the tax identification number on the Tax Administration Information System.
- After termination, the information shall be publicized and transferred to the business registration authority and competent authorities for handling in accordance with the laws on enterprises and cooperatives.
The legal basis for this policy is its consistency with the 10-year limitation rules under Point c, Clause 1, Article 21 and Clause 8, Article 44 of the Law on Tax Administration No. 108/2025/QH15, as well as Clause 5, Article 41 of the Law on Accounting No. 88/2015/QH13 on the retention period of accounting documents. There are currently approximately 753,000 taxpayers in status 03 or 06 for over 10 years, of which about 172,147 enterprises/organizations have no tax debts.
Protection of individuals whose information has been fraudulently used for business or household business registration
During the implementation of the Campaign, the tax authority received 614 reports of personal information being illegally used to register the establishment of enterprises or household businesses. The draft provides that: if an individual has submitted a written request to the business registration authority (or the tax authority) and the police for handling of the fraudulent use of information; and the police have issued a written confirmation of receipt of the report and that it is under processing, which has been sent to the tax/business registration authority, then the tax authority shall temporarily refrain from applying exit ban measures against that individual under Point c, Clause 1, Article 28 of Decree 252/2026/ND-CP.
Transitional provisions and effectiveness
The Draft proposes the Resolution shall take effect until 30 June 2028. During its effective period, where the provisions of the Resolution differ from those of Decree 252/2026/ND-CP or Decree 125/2020/ND-CP (and amending documents), the provisions of the Resolution shall apply.
Transitional provisions ensure that: (i) dossiers submitted before the Resolution takes effect but for which no notice of termination/restoration has been issued shall still benefit from the tax return policy (except where a penalty decision has already been issued); (ii) tax returns under processing for which no penalty decision has been issued shall benefit from the reduced penalty rates; (iii) if, after the special policy has been applied, it is discovered that the taxpayer actually generated tax liabilities, the tax authority may restore the previous status of the tax identification number and re-determine the obligations in accordance with general regulations.
Table 4. Summary of conditions for enjoying the preferential policies under the draft
| Policy | Key conditions | Exclusions |
|---|---|---|
| Exemption from filing tax returns | In status 03 or 06. Tax periods with no tax liability. Commitment of responsibility required. | Periods before the notice/revocation. Periods generating tax liability. |
| Reduced late-filing penalties | In status 03 or 06. Full submission of missing returns. Filing within the Resolution period. | Signs of tax evasion/fraud. Under inspection/investigation. Penalty decision already issued. |
| Termination of TIN after >10 years | Inactive for ≥10 years. No tax debts. 30-day public notice with no objection | Having tax debts. Under inspection/investigation/prosecution. |
| Temporary suspension of exit ban | Victim of identity fraud in registration. Written request submitted to BR authority/tax + Police. Police confirmation of receipt issued. | No police confirmation yet. |
RECOMMENDATIONS
The draft Government Resolution reflects a practical approach with clear objectives aimed at resolving bottlenecks in compliance costs and the backlog of tax administration data, while responding to the recommendations of the Global Forum ahead of the in-depth assessment in Q2/2028. Limiting the application period to 30 June 2028 ensures the “special – transitional” nature of the measure, without replacing the regular tax administration framework.
Positive aspects:
- Significant reduction in compliance costs (estimated at over VND 3,255 billion in filing costs and several thousand billion dong in penalties).
- Strong incentive for taxpayers to proactively complete procedures, contributing to cleaning up tax identification number data.
- Mechanism to protect the legitimate rights and interests of individuals whose information has been fraudulently used.
- Consistent with the Government’s authority under the Law on Promulgation of Legal Documents and the Party’s policy on improving the business environment.
Points to note in implementation:
- Detailed guidance is needed on the content of commitments and post-audit procedures to prevent abuse of the policy.
- Termination of tax identification numbers for cases inactive for more than 10 years must be carried out carefully, ensuring the right of relevant parties to object.
- Close coordination with business registration authorities is required to synchronize statuses after termination of tax identification number validity.
Recommendation: Enterprises and household businesses currently in status 03 or 06 should closely monitor the promulgation process of the Resolution and prepare any missing tax returns so as to be ready to file immediately upon the Resolution taking effect, in order to benefit from the highest penalty reduction rate (30%). Individuals who suspect that their information has been fraudulently used for business registration should promptly submit applications to the business registration authority/tax authority and the police to protect their legitimate rights and interests.
Disclaimer: This article is for introductory and analytical purposes only. The official content will depend on the document finally promulgated by the Government after completion of the dossier and collection of comments from relevant parties.
Managed by
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Luong Van Chuong I Partner
Phone: (84) 938 04 7969 Email: chris.luong@cnccounsel.com |
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