Shall enterprise merger lead to TIN deactivation in Vietnam?

Shall enterprise merger lead to TIN deactivation in Vietnam?

Based on Article 39 of the Law on Tax Administration 2019 which provides regulations on the deactivation of the validity of TINs as follows:

Deactivation of TINs

1. Taxpayers with taxpayer registration along with enterprise registration, cooperative registration, business registration shall deactivate the validity of TINs in the following cases:

a) deactivation of business operations or dissolution, bankruptcy;

b) Withdrawal of enterprise registration certificate, cooperative registration certificate, business registration certificate;

c) Separation, merger, consolidation.

2. Taxpayers directly registered with the tax authority shall deactivate the validity of TINs in the following cases:

a) deactivation of business operations, no longer incurring tax obligations for non-business organizations;

b) Withdrawal of business registration certificate or equivalent license;

c) Separation, merger, consolidation;

d) Notified by the tax authority that the taxpayer is not operating at the registered address;

đ) Death, missing, loss of civil legal capacity according to the provisions of law;

e) Foreign contractor when the contract ends;

g) Contractor, investor participating in the oil and gas contract when the contract ends or transferring all rights in participating in oil and gas contract.

...

Additionally, based on Clause 4, Article 20 of Circular 105/2020/TT-BTC:

Tax Registration in Case of Reorganization

...

4. Consolidating Organizations

a) Organizations being consolidated:

The organizations that are consolidated must carry out procedures to deactivate the validity of their TINs with the directly managing tax authority as stipulated in Article 39 of the Law on Tax Administration and Article 14 of this Circular.

Based on the documentation for deactivating the validity of TINs of the organizations being consolidated, the tax authority shall carry out the procedures and process to deactivate the validity of the TINs of the organization being consolidated as stipulated in Article 39 of the Law on Tax Administration and Articles 15, 16 of this Circular.

b) Consolidating Organization:

The consolidating organization must carry out taxpayer registration procedures with the tax authority as stipulated in Articles 31, 32, and 33 of the Law on Tax Administration and Article 7 of this Circular.

Based on the taxpayer registration documentation of the consolidating organization, the tax authority shall carry out the procedures and process to issue a TIN to the taxpayer as prescribed in Article 34 of the Law on Tax Administration and Article 8 of this Circular.

The enterprise being consolidated must carry out the procedures to deactivate the validity of its TIN.

Thus, the merger of enterprises will result in the deactivation of the TIN's validity for the enterprise being consolidated. For the consolidating enterprise, it will proceed to apply for a new TIN as prescribed.

Shall enterprise merger lead to TIN deactivation in Vietnam? (Image from the Internet)

Vietnam: What does the application for TIN deactitation due to enterprise merger Include?

Based on Clause 4, Article 20 of Circular 105/2020/TT-BTC:

Tax Registration in Case of Reorganization

...

4. Consolidating Organizations

a) Organizations being consolidated:

The organizations that are consolidated must carry out procedures to deactivate the validity of their TINs with the directly managing tax authority as stipulated in Article 39 of the Law on Tax Administration and Article 14 of this Circular.

Based on the documentation for deactivating the validity of TINs of the organizations being consolidated, the tax authority shall carry out the procedures and process to deactivate the validity of the TINs of the organization being consolidated as stipulated in Article 39 of the Law on Tax Administration and Articles 15, 16 of this Circular.

b) Consolidating Organization:

The consolidating organization must carry out taxpayer registration procedures with the tax authority as stipulated in Articles 31, 32, and 33 of the Law on Tax Administration and Article 7 of this Circular.

Based on the taxpayer registration documentation of the consolidating organization, the tax authority shall carry out the procedures and process to issue a TIN to the taxpayer as prescribed in Article 34 of the Law on Tax Administration and Article 8 of this Circular.

Additionally, based on Clause 3, Article 14 of Circular 105/2020/TT-BTC:

Application for TIN deactivation

...

3. The documentation for deactivating the validity of TINs for taxpayers with taxpayer registration along with enterprise registration, cooperative registration, business registration includes the Application for deactivation of TIN Validity form 24/ĐK-TCT issued with this Circular and other documents as follows:

a) The documentation for deactivating the validity of the TIN of enterprises, cooperatives being divided, merged, or consolidated includes one of the following documents: A copy of the decision on division, a copy of the merger contract, a copy of the consolidation contract.

b) The documentation for deactivating the validity of the TIN for dependent units of the enterprise and cooperative includes one of the following documents: A copy of the decision or notification of the enterprise, cooperative on deactivating the operations of the branch, representative office; a copy of the decision to revoke the operation registration certificate of the branch, representative office by the competent authority.

...

Thus, according to regulations, the documentation for deactivating the validity of the TINs in the event of a merger includes:

[1] The Application for deactivation of TIN Validity form 24/DK-TCT issued with Circular 105/2020/TT-BTC: Download

[2] A copy of the enterprise merger contract.

Regulations after the TIN deactivation

Based on Clause 3, Article 39 of the Law on Tax Administration 2019 regulating as follows:

The principles for deactivating the validity of TINs are regulated as follows:

- The TIN cannot be used in economic transactions from the date the tax authority announces the deactivation of its validity;

- The TIN of an organization, once its validity is deactivated, cannot be reused, except in cases stipulated in Article 40 of the Law on Tax Administration 2019;

- The TIN of a business household, individual business, when deactivated, the TIN of the business household representative is not deactivated and is used to fulfill other tax obligations of that individual;

- When enterprises, economic organizations, other organizations, and individuals deactivate the validity of their TINs, they must also deactivate the validity of the TIN used for substitutive purposes;

- Taxpayers who are parent units deactivating their TINs must coincide with the deactivation of the TINs of their dependent units.