Does the suspension of a business require a tax return to be submitted?

by DangKhoi

Is your business operating inefficiently? Do you want to suspend your business? Does the suspension of a business require a tax return to be submitted? Let’s find out in this article with LSX Law firm.

Legal Ground

  • Law on Enterprises in 2020
  • Decree 01/2021/ND-CP
  • Decree 50/2016/ND-CP

What is the suspension of a business?

Suspension of business is the temporary halt of business activities by an enterprise. Enterprises in suspension can’t sign contracts, issuing invoices, or any other activities during the suspension. After the expiration of the suspension’s time limit, the enterprise must resume operation if it didn’t carry out procedures for extension of business suspension, dissolution, or transfer.

Conditions for the suspension of a business, does a tax return need to be submitted?

Enterprises have the right to suspend business. But they must comply with the provisions of Article 206 of the Enterprise Law 2020 on business suspension. Accordingly: 

The enterprise must notify in writing the business registration agency within 03 working days; before the date of business suspension; or resume business before the announced deadline.

The competent authority shall request an enterprise to suspend its business in the following cases:

  • Suspending conditional business lines; industries and professions with conditional market access for foreign investors; when detecting that the enterprise does not fully satisfy the corresponding conditions as prescribed by law;
  • Suspend business at the request of relevant tax administration agencies; environment and other provisions of relevant laws;

Does the suspension of a business require a tax return to be submitted?

During the period when the taxpayer suspends operation or business, the taxpayer doesn’t have to submit a tax return. But, if the taxpayer suspends operation or business for less than a full month, quarter, calendar year or fiscal year, they still need to submit monthly and quarterly tax declaration dossiers; annual settlement records.

Taxpayers must comply with decisions and notices of tax administration agencies on urging debt collection, enforcing enforcement of administrative decisions on tax administration, inspecting and examining tax law observance, and handling tax laws. administrative violations on tax administration according to the provisions of the Law on Tax Administration.

Should the business be suspended?

During the temporary suspension of business, enterprises can focus on solving their difficulties, finding ways to raise capital to restructure the business.

When the business is likely to resume operations earlier than the time of suspension of business; the enterprise only needs to go to the business registration office about the operation ahead of time. In the case after the business suspension period, If the enterprise feels that it is not able to continue operating anymore, it can choose to dissolve. Therefore, many businesses have chosen this form to solve the immediate difficulties.

Hope this article is useful for you. If you need any further information, please contact LSX Law Firm0833102102

Frequently Asked Questions

How long is the suspension of the business?

An enterprise may suspend its business for the first time for a maximum period of one year. If the business cannot resume operation, the enterprise may continue to notify the business suspension (for the second time) to the Business Registration Office; The second business suspension period is a maximum of 01 year.

What is the time limit for sending notices to the Business Registration Office when before the suspension of the business?

According to the provisions of the Enterprise Law 2020:

In case an enterprise suspends its business, the enterprise must send a notice to the Business Registration Office where the enterprise has a headquarter at least 03 working days before the date of business suspension.

Does business have to pay license fees if it’s in suspension?

If the enterprise sends a document to the tax authority directly managing the suspension of production and business activities in the calendar year, it doesn’t have toto pay the license fee for the year of business suspension, provided: stop production and business activities and send them to the tax authorities before the prescribed fee payment deadline (January 30 of each year) and have not yet paid the license fee for the year of application for suspension of production and business activities.

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