What are bases for determining the taxpayer’s business suspension time in Vietnam?

What are bases for determining the taxpayer’s business suspension time in Vietnam?

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

- For taxpayers who register taxpayer registration concurrently with enterprise registration, cooperative registration, or business registration as stipulated in Clause 1, Article 37 of the Law on Tax Administration 2019, the period of temporary business suspension of the enterprises or cooperatives is recorded by business registration authorities, cooperative registration authorities, in the National Business Registration System.

Business registration authorities, cooperative registration authorities shall send the information on temporary business suspension registrations of enterprises, cooperatives to the tax authority electronically via the information exchange system for business registration and taxpayer registration within 1 working day or at the latest the next working day from the date the business registration authorities, cooperative registration authorities record it in the National Business Registration System.

- For taxpayers approved, notified, or requested by competent state agencies to temporarily cease operations or business as stipulated in Clause 1, Article 37 of the Law on Tax Administration 2019, the period will be recorded in the documentation issued by the competent state agencies. The competent state agencies shall send the document to the tax authority directly managing the taxpayer within 3 working days from the date of issuance of the document.

- For taxpayers who are organizations, business households, or individuals not required to register for business registration as stipulated in Clause 2, Article 37 of the Law on Tax Administration 2019, they must notify the tax authority directly managing them at least 1 working day before temporarily ceasing operations or business.

The tax authority shall send a confirmation notice to the taxpayer regarding the period the taxpayer has registered for a temporary cessation of operations or business within 2 working days from the date of receipt of the taxpayer’s notification. The taxpayer may temporarily suspend operations or business for a maximum of 1 year for each registration. In the case of organizations, the total period for temporary suspension of operations or business shall not exceed 2 years for 2 consecutive registrations.

What are bases for determining the taxpayer’s business suspension time in Vietnam? (Image from the Internet))

What are guidance on tax obligations during the taxpayer’s business suspension time?

According to Clause 2, Article 4 of Decree 126/2020/ND-CP, the tax obligations during the taxpayer’s business suspension time are guided as follows:

- Taxpayers are not required to submit tax declarations unless taxpayers temporarily cease operations or business for less than a whole month, quarter, calendar year, or fiscal year, in which case they must still submit monthly, quarterly, and annual tax declarations.

- Business households and individual businesspersons paying taxes by presumptive tax method who temporarily cease operations or business shall have their presumptive tax obligations reassessed by the tax authorities as per the regulations of the Minister of Finance.

- Taxpayers are not allowed to use invoices and are not required to submit reports on the use of invoices. If taxpayers are approved by the tax authorities to use invoices according to the regulations on invoices, they must submit tax declarations and reports on the use of invoices as required.

- Taxpayers must comply with decisions and notices from tax authorities regarding debt collection, enforcement of administrative decisions on tax administration, tax law compliance inspections, and administrative violations in tax management according to the provisions of the Law on Tax Administration 2019.

What is the guidance on notification of taxpayer’s business suspension in Vietnam?

According to Article 12 of Circular 105/2020/TT-BTC, it is stipulated that when temporarily ceasing operations or business, or resuming operations or business before the stipulated time, taxpayers shall notify as per the provisions of Clauses 1, 2, Article 37 of the Law on Tax Administration 2019, Article 4 of Decree 126/2020/ND-CP, and the following regulations:

- Organizations, business households, and individuals not required to register for business registration shall send Notice Form No. 23/DK-TCT issued with Circular 105/2020/TT-BTC to the tax authority directly managing them according to the deadlines stipulated at Point c, Clause 1, and Clauses 3 and 4, Article 4 of Decree 126/2020/ND-CP.

- After the tax authority has issued a notice that the taxpayer is not operating at the registered address, if the enterprise or cooperative is approved for temporary business suspension by the business registration authority or cooperative registration authority but still owes taxes and other amounts to the state budget, or has violated the tax or invoice management laws before ceasing operations at the registered address, the taxpayer must complete the remaining tax and invoice obligations and comply with the decisions and notices from the tax authorities as stipulated in Clause 2, Article 4 of Decree 126/2020/ND-CP.