In fact, when the company encounters difficulties, it can suspend business for a while to overcome. So according to the regulations, the company that owes tax can temporarily stop doing business? Does the company that is owed tax need to do any procedures to be suspended from business? How long can a company that owes tax be suspended from doing business? The following article of Lawyer X will help readers answer questions about these issues, please follow along.
Legal grounds
Enterprise Law 2020
Decree 01/2021/ND-CP
What is business suspension?
Pursuant to the provisions of Clause 1, Article 41 of Decree No. 01/2021/ND-CP:
“Suspension of business” means the legal status of an enterprise that is in the process of suspending business as prescribed in Clause 1, Article 206 of the Law on Enterprises. The date of changing the legal status of “Suspended from business” is the date the enterprise registers to start suspending its business. The end date of the legal status of “Suspended business” is the end date of the business suspension period announced by the enterprise or the date the enterprise registers to resume business before the announced time limit.
Can a company that owes tax be able to suspend its business?
Pursuant to the provisions of Clause 3, Article 206 of the Enterprise Law 2020, then:
During the business suspension period, the enterprise must fully pay the outstanding tax, social insurance, health insurance and unemployment insurance amounts; continue to pay debts, complete the performance of contracts signed with customers and employees, unless otherwise agreed upon by enterprises, creditors, customers and employees.
According to this regulation, in case the company suspends its business, the company still has to pay the full amount of tax owed. However, it does not mean that a company that is owed taxes is not allowed to suspend business. Accordingly, the company only needs to notify at least 03 working days in advance before the date of business suspension, and at the same time, during the time of business suspension, make the payment of tax debt.
However, in practice, businesses that owe taxes often will not be allowed to suspend business until they have fulfilled their tax obligations with the tax authorities. Enterprises should actively fulfill their tax obligations with state agencies.
How long can a company that owes tax be suspended from doing business?
In case an enterprise, branch, representative office or business location suspends business or resumes business before the notified time limit, the enterprise shall send a notice to the Business Registration Office where the enterprise or branch is located. , representative office, business location at least 03 working days before the date of business suspension or resumption of business before the notified time limit. If an enterprise, branch, representative office or business location wishes to continue to suspend business after the notice period expires, it must notify the Business Registration Office within 03 working days. before the date of resumption of business suspension. The duration of business suspension of each notice shall not exceed one year.
Enterprises are allowed to suspend business many times, but each time is only allowed to suspend for a maximum of 1 year.
What documents should the company that owes tax prepare to be suspended from business?
The company that owes tax needs to prepare the following documents to be temporarily suspended from business:
Notice of business suspension;
Minutes of the meeting of the Board of Directors/Board of members on business suspension for joint stock companies/limited liability companies with two or more members;
Decision on business suspension;
Authorization letter for applicants: Posting unusual information disclosure: The company must publish it on its website, publications (if any) and publicly list it at its head office and business location. of the company about unusual information within 36 hours from the time of partial or total suspension of business activities.
Does the business suspending business have to notify the tax authority?
Pursuant to the provisions of Article 37 of the Law on Tax Administration 2019 stipulates as follows:
Notice when suspending operation, business
- Business organizations, households and individuals subject to business registration shall suspend their operation or business for a definite term or resume their operation and business before the notified deadline in accordance with the Law on Enterprises. and other relevant provisions of law, the tax authority shall base itself on the notice of the taxpayer or a competent state agency to conduct tax administration during the time the taxpayer suspends operations or business. or resume operations and business ahead of time in accordance with this Law.
- Business organizations, households and individuals that are not subject to business registration shall notify the tax authority directly managing them at least 01 working day before suspending their operation or business or continue to operate and do business before the announced deadline for tax administration.
- The Government shall stipulate tax administration for taxpayers during the period of temporary suspension of operation or business or resumption of operation or business ahead of time.
According to the above regulations, if an enterprise is subject to business registration, when suspending its business, it only needs to notify the business registration agency, not the tax office.
As for an enterprise that is not subject to business registration, when temporarily suspending business, it must notify the tax authority directly managing it.
What procedures should the company that is owed tax do to be suspended from business?
Business suspension procedures will be carried out according to the following steps:
Step 1: Prepare documents to suspend business
Individuals and organizations: Drafting records and documents in accordance with regulations (for specific information, please see the section below). The business suspension dossier has an important part as the reason for business suspension, usually businesses take the reason as financial difficulties and cannot continue to operate.
Step 2: Submit a business suspension application to the Department of Planning and Investment
After preparing the application for business suspension, individuals and organizations submit online to the Department of Planning and Investment of the province/city to register the head office of the enterprise.
Step 3: Receive and appraise the company’s business suspension documents
The Business Registration Office handles the dossiers, consults the relevant agencies (if necessary) in the process of processing and completes the results of handling the dossiers and updates the status of the dossiers on the online database online for businesses to update the status of their records.
Step 4: Receive notice of business suspension
In case the application is valid, the enterprise will submit the paper (hard copy) application to the Business Registration Office to receive the result. In case the dossier needs to be amended or supplemented, the enterprise will amend and supplement the dossier at the request of the registration agency.
Note: The procedure to suspend the company’s business operation only needs to be filed at the Department of Planning and Investment and NOT at the hiring agency that is managing the enterprise’s tax.
Step 5: Officially suspend the company’s business activities
After receiving the notice of business suspension, the enterprise will suspend from the time stated on the notice, all business activities after the date of suspension must stop, the enterprise is allowed to resume operations after when the suspension period expires or requests to resume operation soon before the suspension period has expired.
Related articles
How to extend the business suspension?
Procedures for temporary suspension of private enterprises in Vietnam
Term of business suspension of the enterprise in Vietnam
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Frequently asked questions
According to regulations, for business individuals not subject to business registration as prescribed, the notice of business suspension shall be sent to the tax authority directly managing them no later than 01 working day before the temporary suspension. operations and business. Therefore, you are a business individual not subject to business registration must notify the business suspension to the tax office.
According to regulations, representative offices of enterprises are allowed to suspend business for no more than 1 year for each notice, that is, they can announce business suspension many times, but each time is up to 1 year.
Conclusion: So the above is Can a company in Vietnam that owes tax be able to suspend business. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
