Do I have to file a tax return if I suspend my business in Vietnam?
In certain cases, the company may suspend business for a period of time. Accordingly, enterprises must suspend all activities including branches and representative offices in accordance with the law. However, when temporarily suspending business, does the enterprise need to make tax reports and submit them to the competent authority? If you do not understand clearly about the regulations, you may face some difficulties. So, in this article LSX legal firm will answer the question: “Do I have to file a tax return if I suspend my business in Vietnam?”
Legal grounds
- Decree 126/2020/ND-CP
- Circular 151/2014/TT-BTC
Do I have to file a tax return if I suspend my business?
According to Point a, Clause 2, Article 4 of Decree 126/2020/ND-CP stipulates:
“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.”
At the same time, based on Article 14 of Circular 151/2014/TT-BTC amending and supplementing Point dd, Clause 1, Article 10 of Circular 156/2013/TT-BTC stipulating:
” 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.”
Accordingly, if the enterprise during the period of business suspension does not incur any tax obligations, they do not have to submit a tax report for the period of business suspension such as VAT, or PIT.
In case an enterprise suspends operations for the whole calendar year, from January 1 to December 31 of that year. Then the business does not have to submit the annual tax finalization. On the contrary, in case the business suspends business for less than a calendar year or a financial year, for example, a few months. So, the business still has to submit annual tax finalization documents, such as corporate income tax; personal income tax finalization; other kinds of tax,…
In short, only in case, the enterprise suspends business for a full month, quarter, calendar year; or fiscal year, tax returns are still required. In other cases of business suspension, the business does not have to submit a tax report as long as no tax liability arises.
Does business suspension require financial statements?
According to the Law on Accounting 2015: “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.”
The financial statement presents the status of assets, capital sources, receivables as well as payables debts, and at the same time shows the business results of the enterprise.
Because tax reporting includes financial statements. When it comes to tax returns, financial statements keep a close relationship with tax reports. Therefore, when the enterprise suspends its business; Depending on whether or not tax returns are required, financial statements will be determined. According to Point a Clause 2, Article 4 of Decree 126/2020/ND-CP; Based on the submission of tax reports upon business suspension, the submission of financial statements divided into two cases:
- Suspension of business for the whole calendar year/fiscal year: In case the enterprise registers to suspend operations from January 1 to December 31 of the year, businesses subject to tax exemption. Therefore, businesses do not have to submit a tax report. Accordingly, they do not have to submit a financial statement.
- Suspension of business for less than a calendar year/financial year: In case the enterprise registers to suspend operations after January 1 or before December 31 of the year. The enterprise suspends business for less than a calendar year or a fiscal year, so it still has to submit the annual tax finalization. That means it still has to submit a tax return, including a financial statement.
Corporate income tax finalization dossiers
According to Point b, Clause 3, Article 16 of Circular 151/2015/ND-CP. The enterprise income tax finalization declaration dossier includes:
- Corporate income tax declaration form No. 03/TNDN.
- The annual financial statement or the financial statement at the time the enterprise has a decision on the division; separation, merger, transformation of enterprises; suspend, dissolve, or terminate the operation.
- One or several appendices attached to the declaration issued together with Circular No. 156/2013/TT-BTC and Circular 151/2015/ND-CP.
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
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Conditions for setting up an enterprise in an export processing industrial park in Vietnam
Conditions for establishing an export processing enterprise in Vietnam
Related questions
Enterprises need to draft valid business suspension documents; then send them to the management agency 03 days before the official date of business suspension;
Tax identification numbers and enterprise identification numbers are not temporarily locked; or there is a document restricting the change of the management agency;
Before suspending business, enterprises must complete other relevant documents on the national portal on business registration;
Suspended business of affiliated units (branch, representative office, business location) of the company.
The total time to suspend business in consecutive times must not exceed 2 years.
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.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Do I have to file a tax return if I suspend my business in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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