Does business suspension require to notify the tax authority in Vietnam?
In 2022, COVID-19 causes significant impacts on domestic businesses. As a result, the number of businesses going bankrupt and temporarily suspended business increased dramatically. Facing a difficult situation in production and export stagnation caused many companies to lose output, increase debt, and still have no solution. Many businesses choose to suspend business, but they do not know whether to notify the tax authority or not. So, to answer this question, LSX legal firm gives you: “Does business suspension require to notify the tax authority in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
- Circular 151/2014/TT-BTC
Is business suspension required to notify the tax authority?
Currently, there are no specific regulations on the concept of “business suspension“. However, according to Clause 1, Article 41 of Decree 01/2021/ND-CP:
“1. “business suspension” means the enterprise’s legal status during its business suspension as prescribed in Clause 1 Article 206 of the Law on enterprises. Starting date of “business suspension” status is the date of business suspension registered by the enterprise…”
In other words, business suspension means when an enterprise temporarily stops carrying out production and business activities for a certain period of time.
So, when I suspend my business, do I have to notify tax?
According to Article 14, Circular 151/2014/TT-BTC:
“If the taxpayer applies for business registration at a business registration authority, the business registration authority shall be informed in writing when the taxpayer suspends or resumes their business operation.
The business registration authority must inform the tax authority in writing of the information of business suspension or resumption of the taxpayer within 02 working days from the day on which the document is received. In case the taxpayer register for business suspension, the tax authority must inform the business registration authority in writing of unpaid tax to the government budget of the taxpayer within 02 working days from the day on which the document is received.”
Thus, if a company, individual, or enterprise has a business registration, they do not need to send a notice to the tax office. The business registration authority and the tax authority will notify each other. This notice must made no later than 02 working days from the date of receipt of the taxpayer’s application.
As for companies, individuals, and businesses without business registration. You have to obtain certification from the tax office before suspending business for at least 01 day.
Does business suspension require a tax return?
According to Clause 2, Article 4 of Decree 126/2020/ND-CP guiding the Tax Administration Law 2019:
Article 4. Tax administration during taxpayer’s business suspension
2. During business suspension:
a) The taxpayer is not required to submit tax declaration dossiers, unless the suspension begins in the middle of a monthly/quarterly/annual tax period, in which case the tax declaration dossier of that month/quarter/year must be submitted.
b) For household businesses and individual businesses paying fixed tax, tax authorities shall decide the tax payable upon their suspension in accordance with regulations of the Minister of Finance.
c) The taxpayer must not use invoices and are not required to submit invoice use reports. In case the taxpayer is permitted by the tax authority to use invoices in accordance with invoice laws, the taxpayer shall submit the tax declaration dossier and invoice use reports as per regulations.
d) The taxpayer shall implement the tax authority’s decisions and notices of debt collection, enforcement of tax decisions, inspection of compliance to tax laws and administrative penalties for tax offences in accordance with the Law on Tax administration.
Accordingly:
For monthly tax reports:
- You do not have to submit a tax report if the business suspends for a full month.
- You have to submit a tax report if the business suspends for less than a month.
For quarterly tax reports:
- You do not have to submit a tax report if the business suspends for a full quarter month.
- You have to submit a tax report if the business suspends for less than a quarter.
For tax reports by calendar year or fiscal year.
- In case you suspend for a whole year, you do not have to submit annual finalization dossiers and financial statements (financial statements).
- In case you suspend for less than a whole year, you must submit.
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.
Related articles
Does business suspension require tax finalization in Vietnam?
Procedures to suspend business online in Vietnam
Should businesses suspend or dissolve in Vietnam?
Related questions
According to Article 57 of Decree No.78/2015/ND-CP on Enterprise Registration:
In case an enterprise or a branch, representative office, or business location suspends its business or resumes its business ahead of the notified schedule, it shall send to the business registration section with which the enterprise or its branch, representative office, or business location has made registration at least 15 days before the date of business suspension or resumption.
Besides, the business suspension period must not exceed one year. After this notified period, if the enterprise or its branch, representative office, or business location still suspends its business, it shall send another notice thereof to the business registration section. The total period of continuous business suspension must not exceed two years.
According to the old regulations, the maximum duration of business suspension is 2 years. However, Decree 01/2021/ND-CP no longer stipulates this provision. Therefore, each time suspending business is up to 1 year. However, businesses can suspend their business many times in a row (no time limit).
Method 1: Submit the application directly to the Business Registration Office of the Department of Planning and Investment.
Method 2: Submit the application for business suspension online.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Is business suspension required to notify the tax authority in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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