Shall the enterprises have their TIN deactivated in case of shutdown in Vietnam?

Shall the enterprises have their TIN deactivated in case of shutdown in Vietnam?

According to Clauses 1 and 2, Article 39 of the 2019 Law on Tax Administration, the circumstances under which taxpayers must deactivate their TINs are regulated as follows:

Deactivation of TIN

1. Taxpayers registered with the business registration, cooperative registration, business registration are required to deactivate their TINs in the following circumstances:

a) Shutdown or dissolution, bankruptcy;

b) Business registration certificates, cooperative registration certificates, business registration certificates are revoked;

c) Division, merger, consolidation occurs.

2. Taxpayers directly registered with the tax authority must deactivate their TINs in the following circumstances:

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

b) Revocation of business registration certificate or equivalent license;

c) Division, merger, consolidation occurs;

d) Tax authority issues a notice that the taxpayer is not operating at the registered address;

dd) Individual dies, is missing, or loses civil act capacity as prescribed by law;

e) Foreign contractors upon contract conclusion;

g) Contractors, investors involved in petroleum contracts upon contract deactivation or full transfer of rights to participate in petroleum contracts.

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Therefore, taxpayers in the case of dissolved business activities must deactivate their TINs.

Shall the enterprises have their TIN deactivated in case of shutdown in Vietnam? (Image from the Internet)

What are the obligations of taxpayers before TIN deactivation in Vietnam?

According to Article 15 of Circular 105/2020/TT-BTC, there are regulations concerning the obligations that taxpayers must fulfill in each case before TIN deactivation. Specifically:

- For taxpayers as per Point a, b, c, d, đ, e, g, h, m, n Clause 2 Article 4 of Circular 105/2020/TT-BTC:

+ Taxpayers must submit a report on the use of invoices as prescribed by invoice law;

+ Taxpayers must complete the obligation to submit tax declarations, pay taxes, and handle excess tax payments and VAT not yet deducted (if any) under Articles 43, 44, 47, 60, 67, 68, 70, 71 of the 2019 Law on Tax Administration with the tax authority;

+ In cases where there are dependent units, all must fulfill procedures to deactivate the TIN before the main unit deactivates its TIN.

- For business households, individual businesses under Point i Clause 2 Article 4 of Circular 105/2020/TT-BTC:

+ Taxpayers must submit a report on invoice usage as prescribed by law if using invoices;

+ Taxpayers must complete tax payment obligations and handle the excess tax payments under Articles 60, 67, 69, 70, 71 of the 2019 Law on Tax Administration with tax authorities for business households, individual businesses paying tax via lump sum;

+ Taxpayers must complete tax declaration, tax payment obligations, and handle excess tax payments, undeducted VAT (if any) under Articles 43, 44, 47, 60, 67, 68, 70, 71 of the 2019 Law on Tax Administration with tax authorities for business households, individual businesses paying tax via declaration method.

- Business households transitioning to small and medium enterprises in accordance with the Law on Supporting Small and Medium Enterprises must complete tax obligations with the directly managing tax authority or send a written commitment to the tax authority stating that the small and medium enterprise converted from a business household inherits all the tax obligations of the business household as prescribed by the law on supporting small and medium enterprises.

- For individuals under Point k, l Clause 2 Article 4 of Circular 105/2020/TT-BTC:

Taxpayers must complete tax payment obligations and handle excess tax payments as prescribed in Articles 60, 67, 69, 70, 71 of the 2019 Law on Tax Administration with tax management agencies.

What are principles of TIN deactivation in Vietnam?

Based on Clause 3, Article 39 of the 2019 Law on Tax Administration, regulations on the principles of deactivating TIN are specified:

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

- The TIN of an organization, when deactivated, must not be reused, except as prescribed in Article 40 of this Law;

- When business households or individual businesses deactivate TIN, the TIN of the household representative does not lose its validity and can be used for other tax obligations of that individual;

- When enterprises, economic organizations, other organizations, and individuals deactivate their TIN, they must simultaneously deactivate the validity of the substitute TIN;

- If the taxpayer as the main unit deactivates the TIN, the dependent units must also have their TIN deactivated.