Shall a joint-stock company required to conduct a tax statement audit upon TIN deactivation due to bankruptcy in Vietnam?

Shall a joint-stock company have its TIN deactivated due to bankruptcy in Vietnam?

Pursuant to the provisions of Clause 1, Article 39 of the Law on Tax Administration 2019, taxpayer registration is accomplished in conjunction with enterprise registration, cooperative registration, and business registration, and shall deactivate the TIN in the following cases:

Deactivation of the TIN

1. Taxpayer registration in conjunction with enterprise registration, cooperative registration, and business registration shall deactivate the TIN in any of the following cases:

a) Deactivation of business activities or dissolution, bankruptcy;

b) Revocation of business registration certificate, cooperative registration certificate, or business registration certificate;

c) Split, merger, or consolidation.

...

Thus, in the case of a joint-stock company going bankrupt, the TIN will be deactivated.

Shall a joint-stock company required to conduct a tax statement audit upon TIN deactivation due to bankruptcy in Vietnam? (Image from the Internet)

Shall a joint-stock company required to conduct a tax statement audit upon TIN deactivation due to bankruptcy in Vietnam?

Based on the provisions in Official Dispatch 5818/TCT-KK of 2023 regarding the processing of deactivation of TINs for bankrupt enterprises as follows:

Pursuant to Clause 2, Article 19 of the Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019, stipulating the powers of tax administration authorities;

Pursuant to Point g, Clause 1, Article 110 of the Law on Tax Administration No. 38/2019/QH14, dated June 13, 2019, stipulating cases of tax audit at the taxpayer's premises;

Pursuant to Clause 1, Article 72 of Circular 80/2021/TT-BTC dated September 29, 2021, specifying cases of dissolution or deactivation of operations without requiring tax statement according to Point g, Clause 1, Article 110 of the Law on Tax Administration No. 38/2019/QH14.

Based on the above legal provisions, the case of Southern Food Processing Joint Stock Company (the Company) deactivating its TIN due to bankruptcy does not fall under the cases exempt from tax statement audit according to Point g, Clause 1, Article 110 of the Law on Tax Administration No. 38/2019/QH14. Therefore, to process the deactivation of the Company's TIN, it is requested that the Soc Trang Tax Department submit a document to the People's Court of Soc Trang province to utilize the Company's records and documents for compliance with Clause 2, Article 19 of the Law on Tax Administration No. 38/2019/QH14.

Referring to Point g, Clause 1, Article 110 of the Law on Tax Administration 2019 as follows:

Tax audit at the taxpayer's premises

1. Tax audit at the taxpayer's premises is conducted in the following cases:

...

g) In cases of division, separation, merger, consolidation, conversion of the type of enterprise, dissolution, deactivation of operations, equitization, deactivation of the TIN, relocation of the business location, and cases of unexpected audit, audit directed by the competent authority, except in cases of dissolution or deactivation of operations where the tax authority is not required to conduct a tax statement according to the law.

...

And Clause 1, Article 72 of Circular 80/2021/TT-BTC stipulates the cases of dissolution or deactivation of operations that do not require a tax statement mentioned at Point g, Clause 1, Article 110 of the Law on Tax Administration 2019 as follows:

Tax audit at the taxpayer's premises

1. Cases of audit at the taxpayer's premises, audit frequency, and time for sending the Tax audit Decision are conducted according to Points a, b, d, đ, e, g of Clause 1, and Clauses 2 and 3 of Article 110 of the Law on Tax Administration.

Cases of dissolution or deactivation of operations not requiring a tax statement mentioned at Point g, Clause 1, Article 110 of the Law on Tax Administration:

a) The taxpayer is liable for corporate income tax as a percentage of sales revenue for goods and services as prescribed by the Corporate Income Tax Law and carries out dissolution or deactivation of operations.

b) The taxpayer dissolves or deactivates operations, but from the time of establishment to the time of dissolution or deactivation, the enterprise has not generated revenue, nor has it used invoices.

....

Thus, if the joint-stock company does not fall under the following cases when going bankrupt, it will be required to conduct a tax statement audit:

- The taxpayer is liable for corporate income tax as a percentage of sales revenue for goods and services as prescribed by the Corporate Income Tax Law and carries out dissolution or deactivation of operations.

- The taxpayer dissolves or deactivates operations, but from the time of establishment to the time of dissolution or deactivation, the enterprise has not generated revenue, nor has it used invoices.

Vietnam: Can the TIN of a joint-stock company be reactivated used after being deactivated?

Pursuant to Point a, Clause 3, Article 39 of the Law on Tax Administration 2019, from the date the tax authority announces the deactivation of the TIN's validity of the joint-stock company, that TIN cannot be used in economic transactions.