Facing the impact of the Covid-19 epidemic, many businesses have decided to suspend business for a while. At present, companies and individuals can carry out the procedures for business suspension quickly. Businesses should pay attention to many other problems related to business suspension such as tax declaration and tax finalization. However, many people do not understand clearly about the regulations of the law regarding these problems. So, in this article LSX legal firm will answer the question: “Do business suspensions have to file tax returns in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Law on Tax Administration 2019
Business suspension
Business suspension understood as a case where an enterprise suspends production and business activities for a certain period of time. Besides, businesses must notify in writing of the time to start and duration of the suspension.
On the other hand, clause 1, Article 41 of Decree No. 01/2021/ND-CP stipulates business suspension as follows:
“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. Ending date of “business suspension” status is the ending date of business suspension period as notified by the enterprise or the date of resumption of business ahead of schedule registered by the enterprise.”
One outstanding advantage of suspending business is that when the business resumes operations, the procedure is very simple. In case the suspension period expires, the business will resume operation by itself, and if the business wants to resume earlier than the suspension period, it only needs to make a written notice.
Term of suspension of business
The duration of the business suspension shall not exceed 1 year. After the notice period expires, if the enterprise, branch, representative office, or business location continues to suspend business, then it must further notify the Business Registration Office. Similarly, the extension period must not exceed 1 year.
Thus, the maximum consecutive suspension period cannot exceed 2 years.
Conditions for suspending business
- The Company needs to notify the Business Registration Office of the business suspension at least 3 days in advance to receive a certification of the Company’s business suspension;
- During the time when the Company registers to suspend its business, the Company’s tax identification number must be in operation to ensure the tax declaration obligations are transparent before and after the business suspension registration.
Do business suspensions have to file tax returns?
Monthly tax return:
- In case the business suspends for the whole month (01 month, first day of month to last day of month): then no need to file a tax report.
- In case the business suspends for less than a month: the monthly report must still be submitted.
Quarterly tax return:
- In case the business suspends for a full quarter (3 months, counting from the beginning of the first day of the first month of the quarter to the last day of the last month of the quarter): no tax return required.
- In case the business suspends for less than a quarter, then the business has to submit a tax return.
Tax report by calendar year, fiscal year:
- If the suspension is not for a full year: financial statements must be submitted.
- If suspended for a full year: no financial statements required.
Does suspended business have to pay tax?
According to Point c, Clause 2, Article 1 of Decree 22/2020/ND-CP:
” 5. An operating payer of the license fee that has notified its supervisory tax authority in writing of its suspension of production/business in a calendar year must not pay the license fee for that year of production/business suspension if it has sent written notification of production/business suspension to its supervisory tax authority before the prescribed deadline for paying the license fee (January 30 annually) and has made no payment of the license fee for the planned year of suspension.
It must pay the license fee for the whole year if it does not meet the above-mentioned conditions for production/business suspension.”
Besides, Pursuant to Point a, Clause 2, Article 4 of Decree 126/2020/ND-CP:
“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.”
Accordingly, enterprises temporarily suspending business do not have to pay tax during the period of business suspension as long as they satisfy the above regulations.
Note: Enterprises must notify in writing of business suspension to the business registration office; at least 03 working days before the date of suspension (Clause 1, Article 206 of the Enterprise Law 2020).
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
The content of the notice includes:
Name, head office address, tax identification number;
Firstly, The business suspension period, the start date and the end date of the suspension period;
Secondly, Reason for business suspension;
Thirdly, Full name and signature of the legal representative of the enterprise, the representative of a group of business individuals or the owner of the business household.
Step 1: Prepare a set of business suspension dossiers corresponding to the type of business and prepare valid documents.
Step 2: Submit your application online at: https://dangkykinhdoanh.gov.vn (enterprise must have a business registration account). The enterprise sends a notice to the Business Registration Office where the enterprise has registered its business operation at least 03 working days before the date of business suspension.
Step 3: Within 03 working days after receiving the valid application, the Business Registration Office will send a receipt to the enterprise.
Enterprises: Taxpayers are entitled to suspend their operations of the business for no more than 1 year/each time. Organization: the total period of suspension of business shall not exceed 2 years for 2 consecutive registrations.
Contact LSX Law Firm
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