“How are Vietnam’s current regulations on fulfillment of tax liability upon dissolution, bankruptcy and shutdown of enterprises or cooperatives? Who will take the responsibility to fulfill tax liability?” Mr. Nguyen Hoang Anh in Ho Chi Minh City sent these questions to LawNet for advice.
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LawNet would like to answer Mr. Hoang Anh’s questions as follows:
According to Article 138 of Circular No. 38/2015/TT-BTC amended by Clause 70 Article 1 of Circular No. 39/2018/TT-BTC of the Ministry of Finance of Vietnam, the fulfillment of tax liability upon dissolution, bankruptcy and shutdown shall comply with Article 54 of the Law on Tax administration of Vietnam, regulations of law on enterprises, cooperatives and bankruptcy. Responsibility to fulfill tax liability is specified as follows:
- The owner (of a sole proprietorship), the Board of members, the Board of Directors, the liquidating organization and relevant executives specified in the company’s charter shall be responsible for fulfilling the enterprise’s tax liability before submitting the notice of dissolution to the business registration authority;
- The cooperative dissolution council shall be responsible for fulfillment of tax liability of the cooperative before submitting the dissolution documents to the issuer of the registration certificate;
- The bankruptcy trustee or the asset-liquidating enterprise shall be responsible for fulfillment of the enterprise’s tax liability after a decision to initiate bankruptcy process is issued according to the Law on Bankruptcy of Vietnam.
Responsibility to fulfill tax liability in case an enterprise is shut down without following procedures for dissolution or bankruptcy is specified as follows:
- When an enterprise whose tax liability is unfulfilled is shut down without following procedures for dissolution or bankruptcy, its owner (of a sole proprietorship), the Board of members or Board of Directors or the management board (of a cooperative) or relevant executive specified in the enterprise’s charter shall be responsible for paying the outstanding tax;
- When a household business or sole trader whose tax liability is unfulfilled shuts down the business, the owner of the household or the sole trader is responsible for paying the outstanding tax;
- When an artel whose tax liability is unfulfilled is shut down, the head of the artel is responsible for paying the outstanding tax.
Nguyen Trinh
