Suspending business is an active activity and is the right of the company in accordance with the law. However, a company can not suspend anytime it wants to, but must comply with the law. In some cases, you want to suspend your business, but because of some conditions, you can’t suspend it. On the other hand, many businesses wonder whether they have to do tax finalization or not when suspended. So, in this article LSX legal firm will answer the question: “Does business suspension require tax finalization in Vietnam?”
Legal grounds
- Decree 126/2020/ND-CP
- Circular 151/2014/TT-BTC
Does business suspension require tax finalization
According to Article 14 of Circular 151/2014/TT-BTC:
“If the taxpayer’s business operation is suspended and tax is not incurred, the tax declaration for the suspension period might not be submitted. If the taxpayer’s business is not suspended over the whole calendar year or tax year, the annual declaration must be submitted.”
Thus, according to current regulations, if your company suspends business for 1 full calendar year or does not incur tax obligations to the state; then it is not required to submit tax finalization documents. On the contrary, if your company suspends business for less than a calendar year, it must submit a tax finalization dossier to the tax agency directly managing your company.
Do business suspensions have to file tax reports?
According to current regulations, after the expiration of the business suspension period, if the company does not request an extension, it must declare tax according to the provisions of law. The company can also declare tax before the expiration of the business suspension at the competent tax authority. However, you need to send a written notice to the tax office directly managing your company. After that, the company will carry out tax declaration procedures according to current regulations.
Note: during the business suspension period, if the business does not incur any tax obligations; then they are not required to submit tax reports within this time limit. Types of tax obligations that may arise during the business suspension period such as value-added tax, and personal income tax.
As mentioned above, if the business suspends for a full calendar year; The company not required to file a tax return. Except for cases in which other tax obligations arise during the business suspension period, it must file a tax return. Or in case the business suspension period is not full-time 1 calendar year; then must report tax / tax finalization to the competent tax authority.
In short, only in case the enterprise suspends business for not a full month, quarter, or calendar year; or fiscal year, the enterprise has to submit a tax return. The remaining cases are not required to submit tax reports; but provided that no tax liability arises during the business suspension period.
What does a tax finalization file include?
According to Clause 3, Article 16 of Circular 151/2014/TT-BTC dated October 10, 2014; The enterprise income tax finalization declaration dossier includes:
“CIT declarations shall include:
b.1) CIT declarations form using form No. 03/TNDN enclosed herewith.
b.2) An annual financial statement or a financial statement that up to the time a decision on division, consolidation, merger, conversion, dissolution, or shutdown of the company is made.
b.3) An appendix or appendices enclosed with the tax declaration form issued together with Circular No. 156/2013/TT-BTC and this Circular (on a case-by-case basis)”
Thus, in the case of business suspension, to know whether or not to submit tax finalization; Business owners must consider how long the company has suspended. At the same time, consider whether other tax obligations arise during the business suspension period.
Procedures for business suspension with tax authorities
Step 1: Submit a dossier including the business registration office’s decision to suspend business.
Step 2: Perform the outstanding tax obligations, and fully submit the tax returns of the month or quarter before the business suspension. Also, businesses must submit declarations such as the Finalization of corporate income tax; personal income, financial statements, and notes to financial statements of the year in which the business operates.
Business suspension service of LSX Legal Firm
Business suspension-a necessary solution for businesses when they cannot continue doing business for a specified period of time. Suspending business quickly will help businesses avoid unnecessary costs. Meanwhile, the business suspension process contains complicated procedures so if businesses do it themselves, they will face many risks. Using the business suspension service of LSX will make you feel secure in each stage of implementation.
To make your case more convenient, LSX will perform:
- Legal advice related to new regulations in business suspension;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself, We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
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Related questions
Usually, businesses declare reasons such as objective factors, business processes, need for improvement, etc.
Companies that are unable to meet the deadline and submit their declaration late will face a fine. The fine for non-timely financial statements in Vietnam starts from VND 700,000 (~US$30) and can go up to VND 25,000,000 (~US$1,100).
Under the Vietnamese law on accounting, the financial statement in Vietnam must include the following:
– Balance sheet
– Profit and loss
– Cash flow
– Note of financial statement
Contact LSX
Finally, hope this article is useful for you to answer the question about “Does business suspension require tax finalization in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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