Shall an enterprise finalize tax before having its TIN deactivated due to dissolution in Vietnam?

Shall an enterprise have its TIN deactivated due to dissolution in Vietnam?

Based on the provisions in Clause 1, Article 39 of the Law on Tax Administration 2019, taxpayers must deactivate the validity of their TIN in conjunction with business registration, cooperative registration, or business activity registration when in one of the following situations:

TIN Deactivation

1. Taxpayers must deactivate the validity of their TIN in conjunction with business registration, cooperative registration, or business activity registration when in one of the following situations:

a) Cessation of business activities or dissolution*, bankruptcy;*

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

c) Division, merger, or consolidation.

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Therefore, in the case of a company dissolution, the TIN validity will be deactivated.

Shall an enterprise finalize tax before having its TIN deactivated due to dissolution in Vietnam? (Image from Internet)

Shall an enterprise finalize tax before having its TIN deactivated due to dissolution in Vietnam?

According to the provisions in Subsection 2, Section I of Official Dispatch 883/TCT-DNNCN of 2022 regarding the settlement of personal income tax when a company is dissolved, as follows:

"I. ENTITIES REQUIRED TO SETTLE TAX

...

2. For organizations and individuals paying income from wages and salaries

Organizations and individuals paying income from wages and salaries are responsible for filing tax settlements for personal income tax, regardless of whether tax withholding arises or not, and settling tax for individuals who are authorized. In cases where an individual authorizes tax settlement and the additional tax payable after settlement is 50,000 VND or less and eligible for tax exemption, the organization or individual paying income must still declare the personal information of those receiving income in the settlement tax dossier and not aggregate the additional tax payable of individuals whose payable tax after settlement is 50,000 VND or less. Organizations paying income that have settled personal income tax before the effective date of Decree No. 126/2020/ND-CP will not undergo retrospective examination.

In cases where individuals are employees transferred from an old organization to a new one due to mergers, consolidations, divisions, separations, or changes in business form by the old organization, or where both the old and new organizations are within the same system, the new organization is responsible for settling tax as authorized by individuals for both the portion of income paid by the old organization and must collect tax withholding documents issued by the old income-paying organization (if any).

In cases where income-paying organizations or individuals are dissolved, bankrupt, cease operations, end contracts, or reorganize enterprises, they must file a personal income tax settlement until the time of dissolution, bankruptcy, cessation of operation, end of contract, or enterprise reorganization. When the business form changes (excluding state enterprise equitization) and the transformed enterprise inherits all tax obligations of the pre-transformation enterprise, they are not required to file a personal income tax settlement up to the decision date on enterprise transformation, and will file settlement at the end of the year.

Therefore, in the case of company dissolution, a personal income tax settlement must be completed before the TIN validity is deactivated.

What are regulations on finalize tax on behalf of authorizing individuals of enterprises in Vietnam?

Under the provision in subpoint d.1, point d, Clause 6, Article 8 of Decree 126/2020/ND-CP, companies paying income from wages and salaries are responsible for filing tax settlements and settling on behalf of individuals who are authorized, regardless of whether tax withholding arises.

- If an organization or individual does not generate income payment, they are not required to file a personal income tax settlement.

- In cases where individuals are employees transferred from an old organization to a new one due to mergers, consolidations, divisions, separations, or changes in business form by the old organization, or both the old and new organizations are within the same system, the new company is responsible for settling tax on behalf of the individual for both the part of the income paid by the old company and must retrieve tax withholding documents issued by the old income-paying company for the labor (if any).