From February 6, 2025, shall a taxpayer suspending operations be required to notify the supervisory tax authority in Vietnam?

From February 6, 2025, shall a taxpayer suspending operations be required to notify the supervisory tax authority in Vietnam?

Based on Clause 1, Article 12 of Circular 86/2024/TT-BTC (effective from February 6, 2025), the regulation is as follows:

Notice of suspension of operations, business or resumption of operations, business before the scheduled time

When suspending operations, business or resuming operations, business before the scheduled time, taxpayers shall notify as prescribed in Clause 1, Clause 2, Article 37 of the Law on Tax Administration, Article 4 of Decree No. 126/2020/ND-CP, and the following provisions:

1. Organizations not subject to business registration must send Notification form No. 23/DK-TCT issued with this Circular to the supervisory tax authority within the time specified in point c, clause 1, clause 3, and clause 4, Article 4 of Decree No. 126/2020/ND-CP.

2. After the tax authority has issued a Notification that taxpayers are not operating at the registered address, enterprises, cooperatives, or cooperative groups must carry out procedures to restore their tax code as prescribed in point b, clause 1, Article 18, and point b, clause 1, Article 19 of this Circular before registering the suspension of business activities with the business registration authority.

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Simultaneously, Article 37 of the Law on Tax Administration 2019 provides:

Notification upon suspension of operations, business

1. Organizations, business households, or individuals engaged in business subject to business registration that suspend operations, business for a specified period or resume operations, business before the scheduled time as notified according to the Enterprise Law and other related legal regulations, shall have the tax authority manage tax based on the taxpayer's notification or an authorized state agency notification during the time the taxpayer suspends operations, business or resumes operations, business before the scheduled time as stipulated by this Law.

2. Organizations, business households, or individuals engaged in business not subject to business registration must notify the supervisory tax authority at least 1 working day before suspending operations, business or resuming operations, business before the scheduled time notified for tax management.

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According to the above two provisions, from February 6, 2025, taxpayers when suspending business must notify the supervisory tax authority, specifically:

- Taxpayers subject to business registration when suspending operations shall notify according to the regulations of the Enterprise Law 2020 and other relevant legal regulations;

- Taxpayers not subject to business registration when suspending operations must send Notification form No. 23/DK-TCT issued together with Circular 86/2024/TT-BTC to the supervisory tax authority no later than 1 working day before suspending operations.

From February 6, 2025, shall a taxpayer suspending operations be required to notify the supervisory tax authority in Vietnam? (Image from the Internet)

What is the basis for determining the taxpayer’s business suspension in Vietnam?

According to Clause 1, Article 4 of Decree 126/2020/ND-CP, the basis for determining the taxpayer’s business suspension is:

- For taxpayers who register with enterprise registration, cooperative registration, or business registration as prescribed in Clause 1, Article 37 of the Law on Tax Administration 2019, it is the business suspension period of the enterprise or cooperative recorded by the business registration office, cooperative registration office on the National Business Registration System. The business registration office, cooperative registration office shall send the business suspension registration information of the enterprise, cooperative to the tax authority via electronic means through the business registration information exchange system and taxpayer registration within 1 working day or at the latest the next working day from the date the business registration office, cooperative registration office records it on the National Business Registration System.

- For taxpayers approved, notified, or requested to suspend operations, business by a competent state agency as prescribed in Clause 1, Article 37 of the Law on Tax Administration 2019, it is the date recorded on the document issued by the competent state agency. The competent state agency must send the document to the supervisory tax authority of the taxpayer within 3 working days from the date of issuance.

- For taxpayers who are organizations, business households, individuals not subject to business registration as prescribed in Clause 2, Article 37 of the Law on Tax Administration 2019, they must notify the supervisory tax authority of their suspension of operations, business at least 1 working day before suspending operations, business. The tax authority shall send a confirmation notification to the taxpayer regarding the duration they registered for suspension within 2 working days from the date of receiving the taxpayer’s notification. Taxpayers may suspend operations, business no longer than 1 year per registration. For organizations, the total suspension period shall not exceed 2 years for two consecutive registrations.

Can taxpayers use invoices during the suspension period?

Based on Clause 2, Article 4 of Decree 126/2020/ND-CP, it is regulated as follows:

Tax management for taxpayers during the suspension of operations, business

Taxpayers shall notify when suspending operations, business as prescribed in Article 37 of the Law on Tax Administration and the following provisions:

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2. During the time a taxpayer suspends operations, business:

a) The taxpayer is not required to submit tax declaration dossiers, except in cases where the taxpayer suspends operation, business not covering a full month, quarter, calendar year, or fiscal year, in which case they must submit monthly, quarterly tax declaration dossiers; annual settlement dossiers.

b) Business households, individual businesses paying tax according to a presumptive method that suspends operations, business shall have re-assessed tax obligations as determined by the Ministry of Finance.

c) The taxpayer is not permitted to use invoices and is not required to report on the invoice usage status. In cases where taxpayers are allowed to use invoices by the tax authority as prescribed by the law on invoices, they must submit tax declaration dossiers and reports on the invoice usage status as required.

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Thus, during the period of suspension, taxpayers are not permitted to use invoices.