More than 2.5 million businesses and household businesses in Vietnam have stopped operating or left their registered addresses without closing their tax codes, according to Finance Ministry data as of 23 October reported by VnExpress. A tax-code clean-up campaign launched in July has, after more than 3 months, mostly involved reviews and paperwork, without resolving problems with overdue filings and penalties. The ministry is now consulting on measures to simplify the exit process.
The backlog
About 643,000 cases are in status 03 (ceased operating but tax code not closed) and nearly 1.88 million in status 06 (not operating at the registered address), covering companies, organisations, branches, households and individual traders. Tax authorities have closed 777,835 tax codes since January, but new cases of abandoned addresses are emerging faster than they can be processed.
Why closing is so hard
The ministry says entering the market has become easy, but exiting still carries many obligations. Many owners who stopped trading have missing returns, unpaid taxes, late-payment interest or unpaid business licence fees. In one example, a company that left its address 10 years ago would need to file about 40 VAT returns and 10 corporate income tax finalisations to close its code:
| Item | Amount |
|---|---|
| Late filing penalties | 23 million dong |
| Business licence fees | 20 million dong |
| Late-payment interest on licence fees | 12 million dong |
| Total | About 55 million dong |
Many owners walked away without notifying anyone and no longer have accountants, company seals, digital signatures or records. The ministry also admits some localities are slow to process dissolutions, historic data is missing or lost, and tax, business registration and population databases are not in sync. Ghost companies set up with stolen identities or linked to invoice trading cannot be handled through the normal closure process.
Proposed fixes
Drawing on South Korea, which lets firms deregister once they have actually stopped trading, and China, which links business registration with tax, the ministry proposes:
- Waiving some returns with no tax liability during the inactive period.
- Reducing late-filing penalties, settling licence fee debts and conditionally cancelling late-payment interest.
- Allowing firms inactive for 10 years or more, with no tax debt and not under inspection, investigation, prosecution or trial, to close their codes after 30 days of public notice.
Why it matters
For anyone who registered a company and walked away, an open tax code can mean penalties piling up for years, as the 55 million dong example shows. If adopted, the proposals would cut the cost and time of a legal exit. The ministry also says cleaner data will help curb tax fraud.
What comes next
The proposals are out for consultation and, once approved, are expected to apply until 30 June 2028. The clean-up also prepares Vietnam for a European Union review of tax transparency and information exchange in Q2/2028, when the EU will consider removing Vietnam from monitoring on tax cooperation or moving it to its list of non-cooperative jurisdictions if requirements are not met.