In the course of business operations, sometimes an enterprise needs to suspend its business operations for many subjective and objective reasons. However, owners have to pay attention to many problems before carrying out procedures for business suspension such as tax, insurance,… So, in this article LSX legal firm will answer the question: “Does business suspension have to pay social insurance in Vietnam?”
Legal grounds
- Law on Enterprise 2020
- Law on Social Insurance 2014
- Decree 115/2015/ND-CP
- Circular 59/2015/TT-BLDTBXH
Business suspension
Suspending business means an enterprise carrying out administrative procedures with the business registration authority as well as the competent authority for the purpose of not doing business for a certain period of time.
This means that the enterprise does not carry out any production or business activities during the temporary shutdown. Also, do not sign contracts with partners and customers, not issue invoices, and do not have to declare and finalize tax when it comes to the final settlement period.
Currently, there are many different reasons leading to enterprises having to decide to suspend their business such as enterprises having financial and human resource difficulties and cannot continue to operate, enterprises having new orientations in their business structure, or corporate organization…
Besides, enterprises must suspend business operations when they no longer satisfy business conditions; according to regulations at the request of the business registration agency; or other competent authority.
When an enterprise wishes to suspend its business, it must carry out procedures for business suspension and notify the suspension to the business registration office and tax agency that directly manage the business.
Who has to pay social insurance when the business temporarily suspended?
According to the provisions of the law on cases of temporary suspension of payment of compulsory social insurance in force majeure and objective cases, the parties cannot fulfill the obligation to pay social insurance:
Suspension of payment to the retirement and survivor fund in the following cases:
- Individuals and organizations temporarily stop paying to the social insurance fund.
- In case of suspending production and business for 01 month or more due to difficulties in restructuring, technology or due to crisis, economic recession, or implementation of State policies when restructuring the economy or implementation of international commitments;
- When individuals and organizations face difficulties due to natural disasters, fires, epidemics, and crop failures. Due to the inability to pay social insurance contributions, the payment of social insurance premiums will be suspended until the operation stabilizes again.
Does business suspension have to pay social insurance in Vietnam?
Clause 1, Article 88 of the Law on Social Insurance 2014 provides for the temporary suspension of payment of social insurance as follows:
Article 88. Suspension from payment of compulsory social insurance premiums
Suspension from payment to the retirement and survivor allowance fund is
specified as follows:
a/ In case employers meet with difficulties and have to suspend their production or business activities, making them and their employees unable to pay social insurance premiums, the payment to the retirement and survivor allowance fund may be suspended for 12 months at most;
b/ Upon the expiration of the time limit for payment suspension specified at Point a of this Clause, employers and employees shall continue paying social insurance premiums and make supplementary payment for the suspension period. The supplementary amount paid for the suspension period is not subject to late payment interest under Clause 3, Article 122 of this Law.
Does suspended company pay license tax?
Companies carry out procedures for business suspension when they encounter difficulties and cannot continue operating. The enterprises shall carry out the procedures for suspending the company by sending a notice to the business registration office where the enterprises have registered their operations at least 03 working days before the date of business suspension.
Besides, Point c, Clause 2, Article 1 of Decree 22/2020/ND-CP stipulates:
c) Clause 5 Article 4 is amended as follows:
“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 a 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.”
Thus, during the business suspension, companies will not have to pay a license tax.
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;
- 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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Certificate of business suspension of business in Vietnam
Conditions for business suspension of business in Vietnam
Related questions
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.
Firstly, notice of business suspension;
Secondly, decision of the Board of Members on business suspension;
Thirdly, a copy of the meeting minutes of the Board of Members on business suspension;
Fourthly, power of attorney for individuals to carry out the procedures (if enterprises cannot do it themselves);
Lastly, copy of the company’s business registration certificate (if any).
Firstly, notice of business suspension;
Secondly, decision of the Board of Directors on business suspension;
Thirdly, a copy of the meeting minutes of the Board of Directors on business suspension;
Fourthly, power of attorney for individuals to carry out the procedures (if enterprises cannot do it themselves);
Lastly, copy of the company’s business registration certificate.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Does business suspension have to pay social insurance in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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