Are taxpayers who temporarily suspend business operations for less than a full month in Vietnam required to submit tax declaration?

What are regulations on notification of temporary suspension of activities to tax authorities in Vietnam?

According to Article 37 of the Law on Tax Administration 2019 on the notification of temporary suspension of activities to tax authorities:

- Organizations, business households, and individuals engaged in business activities that are subject to business registration temporarily suspend their activities, conduct business with a limited duration, or resume activities before the notified time according to the provisions of the Law on Enterprises and other related laws. The tax authorities will manage taxes during the suspension or early resumption of activities based on the taxpayer's notification or the competent state authority's notification according to this Law.

- Organizations, business households, and individuals who are not subject to business registration must notify the direct tax authorities at least 01 working day before suspending or resuming activities before the notified time to manage taxes.

- The Government of Vietnam regulates tax management for taxpayers during the period of temporary suspension or early resumption of activities.

Furthermore, the notification when temporarily suspending activities with tax authorities is guided in Article 12, Section 3, Chapter II of Circular 105/2020/TT-BTC as follows:

Notification of temporary suspension of activities or resumption of activities before the notified time

When temporarily suspending business activities or resuming activities before the notified time, taxpayers must notify in accordance with Clauses 1 and 2 of Article 37 of the Law on Tax Administration, Article 4 of Decree No. 126/2020/ND-CP dated October 19, 2020, of the Government of Vietnam detailing some articles of the Law on Tax Administration, and other regulations as follows:

1. Organizations, business households, and individuals who are not subject to business registration must send Notification form No. 23/DK-TCT attached with this Circular to the direct tax authorities according to the deadlines specified in Point c, Clause 1, Clauses 3 and 4 of Article 4, Decree No. 126/2020/ND-CP dated October 19, 2020, of the Government of Vietnam detailing some articles of the Law on Tax Administration.

2. After the tax authority has issued a notification that the taxpayer is not operating at the registered address, enterprises, cooperatives approved for business suspension but still owe taxes and other amounts due to the state budget and have violated tax management and invoice laws before stopping operations at the registered address must fulfill the outstanding tax and invoice obligations and comply with decisions and notifications of tax management authorities according to Clause 2, Article 4 of Decree No. 126/2020/ND-CP dated October 19, 2020, of the Government of Vietnam detailing some articles of the Law on Tax Administration.

At the same time, the handling of notifications of temporary suspension of activities or early resumption of activities is also guided in Article 13, Section 3, Chapter II of Circular 105/2020/TT-BTC as follows:

The handling of notifications of temporary suspension of activities or early resumption of activities of taxpayers, handling of documents approving temporary suspension or early resumption of activities of competent state authorities shall be carried out according to Clauses 1 and 2 of Article 37 of the Law on Tax Administration; Clauses 1, 3, and 4 of Article 4 of Decree 126/2020/ND-CP dated October 19, 2020, of the Government of Vietnam detailing some articles of the Law on Tax Administration and other regulations as follows:

- For notifications of temporary suspension of activities or early resumption of activities of taxpayers:

The tax authority handles the dossier and issues a notification of approval or non-approval of temporary suspension of activities, Form No. 27/TB-DKT download here, a notification of temporary suspension of activities under the management unit, Form No. 33/TB-DKT download here (if any), a notification of early resumption of activities under the management unit, Form No. 34/1B-DKT download here (if any) attached with this Circular to the taxpayer within 02 (two) working days from the date of receipt of the full dossier according to regulations.

- For documents approving temporary suspension of activities or early resumption of activities of competent state authorities:

The tax authority updates the information on the temporary suspension of activities or early resumption of activities of the taxpayer into the taxpayer registration application system.

Are taxpayers who temporarily suspend business operations for less than a full quarter in Vietnam required to submit tax declaration? (Image from the Internet)

Are taxpayers who temporarily suspend business operations for less than a full month in Vietnam required to submit tax declaration?

According to Clause 2, Article 4 of Decree 126/2020/ND-CP:

Tax management for taxpayers during the temporary suspension of activities or business

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2. During the temporary suspension of activities or business:

a) Taxpayers do not have to file tax declarations, except in cases where taxpayers temporarily suspend activities or business for less than a month, quarter, calendar year, or financial year; in such cases, they must still file monthly or quarterly tax declarations and annual settlement returns.

b) Business households and individuals who pay flat-rate taxes temporarily suspend activities or business and are determined by the tax authority to reassess tax obligations according to regulations issued by the Minister of Finance.

c) Taxpayers are not allowed to use invoices and do not have to submit invoice usage reports. If taxpayers are approved by the tax authority to use invoices according to the law on invoices, they must submit tax declarations and invoice usage reports as required.

d) Taxpayers must comply with the decisions and notifications of the tax administration authority regarding debt collection, enforcement of administrative decisions on tax management, inspection, examination of tax law compliance, and handling of administrative violations in tax management according to the provisions of the Law on Tax Administration.

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Thus, taxpayers during the temporary suspension of activities do not have to file tax declarations.

However, in cases where taxpayers temporarily suspend activities or business for less than a month, quarter, calendar year, or financial year, they must still file monthly or quarterly tax declarations and annual settlement returns.

Therefore, taxpayers who temporarily suspend business activities for less than a quarter still have to file monthly tax declarations.

Do taxpayers in Vietnam need to notify the authorities when resuming business activities?

According to Clause 3, Article 4 of Decree 126/2020/ND-CP:

Tax management for taxpayers during the temporary suspension of activities or business

...

3. Taxpayers who resume activities or business at the registered time do not need to notify the authorities where they registered the temporary suspension of activities or business.

If taxpayers resume business activities before the registered time, they must notify the authority where they registered the temporary suspension of activities or business and perform all tax obligations, file tax declarations, and submit invoice usage reports according to regulations.

For taxpayers specified in Point c, Clause 1 of this Article, they must notify the direct tax authorities at least 01 working day before resuming activities or business early.

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Thus, according to the above regulations, taxpayers who want to resume business activities do not need to notify the authorities where they registered the temporary suspension of activities.