In business activities of enterprises, there will be times when the business must be suspended for various reasons. In case of business suspension, can the suspended business issue invoice? To have the answer to this question, please follow the article from LSX legal firm: “Can suspended business issue invoice in Vietnam?”
Legal grounds
- Decree 126/2020/ND-CP
- Circular 151/2014/TT-BTC
Invoice
An invoice-a kind of document made by a seller that records information about the sale of goods and provision of services as prescribed by the law. Thus, when conducting business activities of buying, selling, and providing services in the market, businesses will have to issue invoices to record their revenue.
Can suspended business issue invoice?
Sales invoices are used for organizations and individuals to declare and calculate value-added tax by the direct method when selling goods or providing services in the country, exporting to a non-tariff zone, or exporting goods, providing services abroad.
The business suspension of business means that it will stop all trading activities and providing services in the market. During the period of temporary suspension of business operations, businesses do not need to submit tax returns.
Accordingly, during the period of business suspension, the enterprise can not perform new operations from the time of the notice of business suspension, which means no invoices issued.
However, for the operations performed before the notice of suspension and customers need invoices to pay costs. Then the enterprises can issue invoices for these operations but must get consent from tax authorities.
Invoices of businesses temporarily closed for a definite period of time
Invoices arising after the business suspension
If the invoice is generated after the date of business suspension, the enterprise will not be able to deduct input VAT and will not be included in deductible expenses when calculating corporate income tax.
Invoices arising before the business suspension
In this case, the enterprise must re-check. In case the enterprise really had transactions and has legal documents, reasonable and complete invoices, the enterprise may allowed to deduct input VAT and included in deductible expenses when calculating income tax.
Invoice settlement of the suspended business
Depending on the case, the settlement of invoices of an enterprise temporarily suspending business operations shall be carried out in the following two cases:
a) In case the enterprise has not yet declared VAT deduction:
In case an enterprise has not yet made a VAT deduction declaration, the tax authority will issue a written notice to the enterprise. Then, the enterprise suspends the declaration of VAT deduction for invoices showing signs of law violation
b) In case the enterprise has declared VAT deduction:
In this case, the tax authority will conduct the inspection of the following contents:
- Inspection and verification for goods: Sale contract; place of delivery; forms of freight; the costs of shipping and most importantly the owner and origin of the goods (before the time of delivery of the goods).
- Payment verification: Transaction bank; payments; deposit object and number of transactions.
Does financial statement required for business suspension?
Law on accounting 2015 defined: “Financial statement means a system of financial information of an accounting unit demonstrated according to a form provided for by accounting standards and accounting regime.”
Financial statements are one of the most important records of a business. Financial statements don’t just show the condition of assets; capital; receivables and payables; but also shows the business results of the enterprise.
Since tax declaration include financial statements, when filing a tax return, financial statements are relatively important
According to Point a, Clause 2, Article 4 of Decree 126/2020/ND-CP; Based on the submission of tax reports upon business suspension:
- Suspension of business for the whole calendar year/financial year:
If the enterprise registers to suspend its operation from January 1 to December 31 in the same year; then the businesses are exempt from paying tax. Therefore, businesses do not have to submit tax declarations. That is, there is no need to submit financial statements.
- Suspension of business for less than a calendar year/financial year:
If the time of business suspension of the enterprise is after January 1 and before December 31, the annual tax finalization dossier must be submitted. That means tax returns, including financial statements, is required.
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
During the business suspension, the enterprise must complete the performance of the contract signed with the employee; unless there are other agreements between the enterprise and the employee.
Therefore, enterprises must continue to pay social insurance for employees if the enterprise has no other agreement with the employee.
The enterprise must send a notification to the business registration office and tax office at least 15 days before suspension. The notification should content:
– Name, address of the premises, taxpayer identification number (TIN);
– Suspension period, beginning date and ending date of the suspension;
– Reasons for suspension.
The suspension period must not exceed one year. If the enterprise is still suspended after this period, another notification must be sent to Business Registration Office and tax office. The total duration of continuous suspension must not exceed two year.
After receiving the dossier from the enterprise, the business registration office shall process the dossier within 03 working days to produce the results:
– A written certification of the enterprise’s business registration of business suspension if the dossier is valid;
– Notice of amendment and supplementation of the dossier if the dossier is not valid.
There is no fee for this procedure.
– A notification of enterprise suspension
– The decision and legitimate copy of the minutes of meeting of the Board of members (if the enterprise is a multi-member limited liability company), the company’s owner (if the enterprise is a single-member limited liability company), the Board of Directors (if the enterprise is a joint-stock company), or general partners (if the company is a partnership)
Contact LSX Law Firm
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