Vietnam's First Public Interest Civil Case: Prosecutor Sues and Wins Against Tax Delinquent Firm

Hanoi, Vietnam – In a groundbreaking legal development, Vietnam's People's Procuracy has, for the first time, directly initiated and won a public interest civil lawsuit against a company for tax delinquency. The Hanoi People's Court ruled on July 31 that Landmark Luong Son Co., Ltd. must pay over VND 5.4 billion (approximately USD 212,000) in outstanding taxes and late payment penalties to the state budget. This landmark case is enabled by a pilot mechanism approved by the National Assembly, allowing the People's Procuracy to file civil lawsuits to protect vulnerable groups or public interests. The VKSND of Hanoi's District 5 received information from the tax authorities regarding significant tax arrears and, after verification and direct engagement with the company, determined that Landmark Luong Son owed over VND 6.3 billion (approximately USD 248,000) as of May 31. The company cited cash flow difficulties due to delayed payments from its partners as the reason for its financial obligations, promising to settle its tax dues by June 29, a deadline it failed to meet. While Landmark Luong Son subsequently paid VND 1.2 billion (approximately USD 47,000), the full amount remained unpaid. The tax department, despite applying all administrative enforcement measures, was unable to initiate legal proceedings itself and requested the People's Procuracy to exercise its right under the pilot program. During the trial, the prosecutor argued that the company's tax arrears not only represented a debt to the tax authority but also infringed upon state revenue and public assets. The defendant admitted to the tax liabilities, reiterating its financial struggles and noting an additional payment of VND 500 million (approximately USD 19,700) after the lawsuit was filed. Landmark Luong Son requested the court to waive late payment fees and allow a phased repayment plan. Updated figures presented by the tax authority on the day of the trial showed the total outstanding amount to be over VND 5.4 billion, comprising over VND 5.1 billion in principal and other charges, and VND 309 million in late payment penalties. The tax agency supported the procuracy's lawsuit and urged the court to compel immediate payment. In its judgment, the court acknowledged that Landmark Luong Son's failure to comply with its tax obligations negatively impacted public interests, despite prior warnings and enforcement actions. The court found no grounds for the company's request for waivers or installment plans and consequently accepted the procuracy's claim, ordering the company to pay the outstanding sum. This verdict signifies a crucial step in expanding the role of the People's Procuracy in Vietnam and strengthening legal enforcement in tax collection.