Regulations on fulfillment of tax liability upon enterprise rearrangement in Vietnam

Regulations on fulfillment of tax liability upon enterprise rearrangement in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Regulations on fulfillment of tax liability upon enterprise rearrangement in Vietnam

The fulfillment of tax liability upon enterprise rearrangement according to Article 68 of the Law on Tax Administration 2019 is as follows:

- A fully divided enterprise shall fulfill its tax liability before the division. Otherwise, it shall be fulfilled by the new enterprises established from the division.

- A partially divided enterprise, consolidating enterprise or acquired enterprise shall fulfill its tax liability before the division. Otherwise, it shall be fulfilled by both the partially divided enterprise and the new enterprise, the consolidated enterprise or the acquirer.

- An enterprise that is converted into another type of business entity shall fulfill its tax liability before the conversion. Otherwise, it shall be fulfilled by the enterprise after conversion.

- The rearrangement does not change the time for tax payment by the rearranged enterprise. $the rearranged enterprise or the new enterprise(s) that fails to fully pay tax by the deadline will face penalties as prescribed by law.

2. Regulations on fulfillment of tax liability upon dissolution, bankruptcy and shutdown in Vietnam

According to Article 67 of the Law on Tax Administration 2019, the fulfillment of tax liability upon dissolution, bankruptcy and shutdown is as follows:

- Tax liability shall be fulfilled upon enterprise dissolution in accordance with regulations of law on enterprises, credit institutions, insurance business and relevant laws.

- Tax liability shall be fulfilled upon bankruptcy in accordance with bankruptcy laws.

- When a enterprise shuts down or leaves the registered location before it fulfills its tax liability, the outstanding tax shall be paid by the owner of the sole proprietorship, single-member limited liability company, shareholders, partners or general partners (depending on the type of business entity).

- When a household business or individual businesses ceases business operation before its tax liability is fulfilled, the outstanding tax shall be paid by its owner.

- In the cases where a branch or dependent unit of a taxpayer shuts down without fully paying its tax and other amounts payable to state budget, the taxpayer shall incur such debts.

3. Regulations on fulfillment of tax liability upon taxpayer’s exit in Vietnam

Fulfillment of tax liability upon taxpayer’s exit according to Clauses 1 and 2, Article 66 of the Law on Tax Administration 2019 as follows:

- Taxpayers against whom tax decisions are enforced, Vietnamese citizens exiting Vietnam to reside overseas, Vietnamese people residing overseas, foreigners exiting Vietnam shall fulfill their tax liability before the exit.

Otherwise, they shall be suspended from exit in accordance with immigration laws.

- Tax authorities shall inform immigration authorities of the cases specified in Clause 1 of Article 66 of the Law on Tax Administration 2019.

Quoc Dat

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