Is a tax declaration required when business operation are temporarily suspended in Vietnam?
What is a tax declaration in Vietnam?
According to Clause 7, Article 3 of the 2019 Tax Administration Law, the regulations are as follows:
Article 3. Interpretation of Terms
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- A tax declaration is a form document prescribed by the Minister of Finance, used by taxpayers to declare information for determining the payable tax amount.
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A tax declaration is understood to be a form document prescribed by the Minister of Finance, used by taxpayers to declare information for determining the payable tax amount.
Is a tax declaration required when business operation are temporarily suspended?
According to Clause 3, Article 7 of Decree 126/2020/ND-CP, supplemented by Clause 2, Article 1 of Decree 91/2022/ND-CP regarding tax declaration dossiers, the regulations are as follows:
Tax Declaration Dossiers
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3. Taxpayers are not required to submit tax declaration dossiers in the following cases:
a) Taxpayers only engage in activities exempt from tax according to the tax law applicable to each type of tax.
b) Individuals with incomes exempt from tax under the personal income tax law and Point b, Clause 2, Article 79 of the Tax Administration Law, except for individuals receiving inheritance or gifts being real estate; transferring real estate.
c) Export-processing enterprises engaging solely in export activities are not required to submit value-added tax declaration dossiers.
d) Taxpayers temporarily suspending operations or business operation as stipulated in Article 4 of this Decree.
dd) Taxpayers submitting dossiers to terminate the tax identification number, except for cases of termination of operations, termination of contracts, reorganizing enterprises as per Clause 4, Article 44 of the Tax Administration Law.
Thus, if taxpayers temporarily suspend their business operation, they are not required to submit a tax declaration.
Is a tax declaration required when business operation are temporarily suspended in Vietnam? (Image from the Internet)
When do state agencies have the authority to request enterprises to temporarily suspend their business operation in Vietnam?
Based on Clause 2, Article 206 of the 2020 Enterprise Law regarding the cases in which the business registration authority can request enterprises to temporarily suspend their business operation, the regulations are as follows:
Suspend, cease operations, terminate business
- The enterprise must notify the Business Registration Authority in writing at least 03 working days before the temporary suspension of business operation or resuming business operation before the notified resumption period.
2. The Business Registration Authority, a competent state agency, can request enterprises to temporarily suspend, cease operations, terminate business in the following cases:
a) Temporarily suspending or terminating business in industries, professions with conditional business requirements, or conditional market access for foreign investors when it is discovered that enterprises do not meet the corresponding conditions as prescribed by law;
b) Temporarily suspending business operation as requested by relevant agencies according to the regulations of the tax administration law, environment law, and other related laws;
c) Suspending operations, terminating business operation in one or some industries, professions, or areas as decided by the Court.
During the period of temporary suspension of business operation, enterprises must pay all due taxes, social insurance, health insurance, unemployment insurance; continue to pay debts, fulfill contracts signed with customers and employees, except in cases where enterprises, creditors, customers, and employees have other agreements.
the Government of Vietnam details the procedures and coordination mechanisms between the Business Registration Authority and competent state agencies in cases stipulated in Clause 2 of this Article.
Thus, state agencies have the authority to request enterprises to temporarily suspend their business operation when:
- Temporarily suspending business in industries, professions with conditional business requirements, or conditional market access for foreign investors when it is discovered that enterprises do not meet the corresponding conditions as prescribed by law;
- Temporarily suspending business operation as requested by relevant agencies according to the regulations of the tax administration law, environment law, and other related laws;
- Suspending operations, terminating business operation in one or some industries, professions, or areas as decided by the Court.
How long can an enterprise temporarily suspend its business operation in Vietnam?
According to Clause 1, Article 66 of Decree 01/2021/ND-CP regarding the registration for temporary suspension of business operation, the regulations are as follows:
Registration for temporary suspension, resumption of business before the notified period for enterprises, branches, representative offices, business locations
- In cases where enterprises, branches, representative offices, or business locations temporarily suspend their business operation or resume business before the notified resumption period, the enterprises shall send notifications to the Business Registration Authority where the enterprises, branches, representative offices, or business locations are headquartered no later than 03 working days before the temporary suspension or resumption of business operation. If enterprises, branches, representative offices, or business locations need to continue suspending business operation after the notified period, they must notify the Business Registration Authority no later than 03 working days before the continuation of the temporary suspension of business operation. The period of temporary suspension of business operation for each notification shall not exceed one year.
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Thus, enterprises can only temporarily suspend their business operation for a maximum of one year per notification.
