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A recent publication by the Tax Department lists numerous company directors and legal representatives who have been subject to travel bans due to tax debts. Some of the affected businesses have also disappeared from their registered addresses—for example, the operator of the Món Huế restaurant chain—yet they have not completed their tax obligations.
The situation highlights that ceasing operations or closing a business does not end legal responsibility, particularly tax-related duties.
Attorney Dang Van Cuong, Head of Chính Pháp Law Office (Hanoi Bar Association), said that under regulations on tax administration, businesses must declare and pay taxes to the state in accordance with the Law on Tax Administration. If a company fails to perform these duties, it may face administrative penalties or criminal liability regardless of whether it operates at its registered address.
According to the lawyer, current law provides sanctions for violations related to business activities not matching the registered registration. Under Clause 2, Article 6 of Decree 98/2020/ND-CP, a fine of 5 million to 10 million VND applies to operating beyond the scope, entity, scale, duration, territory, location, or goods listed in the business license.
Clause 4 of Article 4 of Decree 98/2020/ND-CP (as amended by Point b, Clause 1, Article 3 of Decree 17/2022/ND-CP) specifies that the above fine applies to individuals; for organizations, the fine range is 10 million to 20 million VND.
In addition, Clause 7 of Article 6 of Decree 98/2020/ND-CP (as amended) provides that, besides administrative penalties, the violator must also rectify the consequences by returning illicit gains obtained from the violation.
As a result, under current law, failure to conduct business at the registered address can lead to administrative penalties of 5–10 million VND for individuals and 10–20 million VND for organizations, along with a requirement to return illicit gains.
Attorney Dang Van Cuong emphasized that stopping or suspending operations does not eliminate tax obligations. The duty to declare and pay taxes to the state must still be carried out under the Tax Administration Law. A business that does not operate at its registered address cannot avoid its obligations regarding tax declaration and payment.
He also noted that, in principle, each legal violation is handled once; however, if a company commits multiple violations, it can be sanctioned for each violation based on the degree of fault and the consequences. Authorities may address multiple violations simultaneously if detected.
From a tax sanction perspective, the rules are described as follows: failure to declare or late filing is punishable administratively under Decree 125/2020, with penalties ranging from a warning to 25 million VND depending on the length of delay.
If failure to declare results in tax evasion, penalties may be 1–3 times the evaded tax. If the evaded tax exceeds 100 million VND, the company may also face criminal liability.
In summary, closing or suspending operations does not erase tax obligations. Delays and evasion can trigger increasingly severe penalties. Taxpayers are therefore advised to proactively review and fulfill their duties to declare and pay taxes to reduce legal risks and avoid unnecessary consequences.
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