A director heads to the airport for a business trip — only to discover he is temporarily barred from exit because the company owes tax. This is no longer rare. Since 1 July 2026, the new tax enforcement framework has tightened the conditions for applying this measure against legal representatives.
This article explains when a legal representative may be barred from exit over tax debts, and the five practical steps to lift the ban.
1. The new framework from 1 July 2026
Authority and procedures for exit bans over tax debts are now governed by the Law on Tax Administration 108/2025/QH15 and Decree 252/2026/ND-CP (Article 28).
Important: Law on Tax Administration 38/2019/QH14 and Decree 126/2020/ND-CP no longer apply to cases arising from 1 July 2026 — both have expired. Any advice or correspondence citing the old framework must be re-checked.
2. When is a legal representative barred from exit?
Under Article 28(1)(b) of Decree 252/2026/ND-CP, a legal representative is subject to a temporary exit ban where:
- He or she is the beneficial owner of the enterprise (a new point under the current framework); or
- He or she is the legal representative of an enterprise or cooperative currently under enforcement of a tax administrative decision, where the enterprise owes VND 500 million or more in tax overdue for 120 days or more.
All three conditions — VND 500 million + 120 days + ongoing enforcement — must be met together for the legal representative of an enforced enterprise.
3. The “abandoned address” case: banned even with zero tax debt
Under Article 28(1)(c): where the tax authority has announced that the enterprise is not operating at its registered address, and after 120 days the enterprise still has not resumed operations or terminated its tax code — the legal representative is barred from exit even if the enterprise owes no tax.
This is the most dangerous trap: many representatives assume “the company owes nothing” while facing enforcement purely for abandoning the registered business address without resolving it properly.
4. 30 days advance notice — except cases applied immediately
Before applying the measure, the tax authority gives 30 days advance notice via the electronic tax system so the taxpayer can remedy the situation. However, for foreigners and overseas Vietnamese, the measure may be applied immediately without advance notice.
5. How to lift it: no need to pay 100% of the debt
A key new point in Article 28(5): the exit ban decision is cancelled as soon as the outstanding tax debt falls below VND 500 million — the taxpayer is not required to pay 100% of the debt to be released.
Practical note: if the system has not yet updated the status after payment, the taxpayer should submit payment proof via the electronic tax system so the authority can process the cancellation promptly and avoid being stopped despite qualifying for release.
6. The trap: resigned, but the company never updated the registration
A legal representative who has resigned, where the enterprise has not registered the change of enterprise registration content, remains the legal representative on paper — and may still be subjected to the exit ban. The only prevention: when changing legal representatives, complete the change registration fully and never leave a name “hanging” on the licence.
7. Distinguish: tax exit ban vs exit prohibition in proceedings
Two completely different regimes must not be confused:
- Temporary exit ban in tax matters is an administrative enforcement measure to secure tax collection — with thresholds, advance notice and a cancellation mechanism;
- Exit prohibition in proceedings (criminal, civil) is a procedural measure applied by procedural authorities — with entirely different grounds, authority and remedies.
Confusing the two leads to the wrong response strategy.
8. Five steps when a legal representative is barred over tax debts
- Step 1 — Verify the basis: check the ban decision against Article 28(1)(b) or (c) of Decree 252/2026;
- Step 2 — Finalize the figures: look up the tax debt amount and overdue period on the electronic tax system;
- Step 3 — Bring the debt below VND 500 million: pay enough so the remaining debt is under the threshold (no need to clear 100%);
- Step 4 — Submit proof: file payment evidence via the electronic tax system and request cancellation under Article 28(5);
- Step 5 — Fix the root cause: for point (c) (“abandoned address”) cases, resume operations or terminate the tax code — otherwise the ban may be re-applied.
Frequently asked questions
Q: The company owes VND 400 million overdue 150 days — is the director banned from exit?
A: Not yet — Article 28(1)(b) requires VND 500 million or more, overdue 120 days or more, plus ongoing enforcement against the enterprise.
Q: The company owes no tax but abandoned its address 4 months ago — can the director be stopped at the airport?
A: Possibly — under Article 28(1)(c), after 120 days without resuming operations or terminating the tax code, the legal representative is barred even with zero tax debt.
Q: Must the full tax debt be paid to lift the ban?
A: No — under Article 28(5), the decision is cancelled as soon as the debt falls below VND 500 million.
Q: I resigned as director 6 months ago — why am I still banned?
A: If the company never registered the change of legal representative, you remain the representative on paper. Require the company to complete the enterprise registration change.
Legal sources
- Law on Tax Administration 108/2025/QH15 (effective 1 July 2026);
- Decree 252/2026/ND-CP, Article 28 — temporary exit ban in tax enforcement;
- Law on Tax Administration 38/2019/QH14 and Decree 126/2020/ND-CP — expired; not applicable to cases from 1 July 2026.
See also: FLAT Law Firm
Contact us
FLAT Law Firm advises on tax debt resolution and lifting temporary exit bans: reviewing the basis of application, planning how to bring debt below the threshold, preparing filings to the tax authority and fully resolving “abandoned address” status. Contact: contact us.
This article is for general information only and does not constitute legal advice for your specific situation.
Transparency note: This article was prepared by our editorial team with quality assurance (QA) support from the AI Legal Council; it has not been reviewed or approved by a human lawyer.
