Vietnam: 05 new points on tax administration during taxpayer’s business suspension

Official Dispatch No. 5189/TCT-CS of the General Department of Taxation of Vietnam has introduced certain contents on tax administration during taxpayer’s business suspension of Decree No. 126/2020/NĐ-CP on elaboration of the Law on Tax Administration of Vietnam, including:

Basis for determination of business suspension time or business resumption ahead of schedule provided for in clause 1, clause 3 Article 4 of Decree No. 126/2020/NĐ-CP:

- New point 1: Pursuant to Clause 1 Article 37 of the Law on Tax Administration of Vietnam, Decree No. 126/2020/NĐ-CP requires that in case the business suspension is accepted, notified or requested by a competent authority, the business suspension time or business resumption ahead of schedule will be that written on the document issued by such competent authority. The tax authority shall not receive any application for business suspension or business resumption ahead of schedule from the taxpayer, but only receive the document sent by the aforementioned competent authority.

Before: Clause 2 Article 21 of the Circular No. 95/2016/TT-BTC stipulates that the business suspension time or business resumption ahead of schedule shall conform to applications for registration of taxpayers. The tax authority shall receive applications for business suspension time or business resumption ahead of schedule from every taxpayer.

- New point 2: Pursuant to clause 2 Article 37 of the Law on Tax Administration of Vietnam, Decree No. 126/2020/NĐ-CP stipulates that if the taxpayer is an organization, household business or individual business that is not required to apply for business registration, the application for business suspension or business resumption ahead of schedule shall be sent to the tax authority at least 01 working day before the suspension date.

Before: Clause 1 Article 21 of the Circular No. 95/2016/TT-BTC requires 15 days for corporates and 1 working days for households, groups of individuals, self-employed individuals.

- New point 3: Supplementing the time for processing and returning results of business suspension or business resumption ahead of schedule by the tax authority to corporates, household businesses, self-employed individuals that are not required to apply for business registration.

Before: There was no such regulation.

Tax administration during taxpayer’s business suspension prescribed in clause 2 Article 4 of Decree No. 126/2020/NĐ-CP:

- New point 4: Amend regulations on powers and responsibilities of tax authorities regarding tax administration and rights and responsibilities of taxpayers regarding tax administration during taxpayer’s business suspension.

Before:

Article 14 of Circular No. 151/2014/TT-BTC on amendments to point d clause 1 Article 10 of Circular No. 156/2013/TT-BTC:

“dd) If the taxpayer’s business operation is suspended and tax is not incurred, the tax declaration for the suspension period might not be submitted. If the taxpayer’s business is not suspended over the whole calendar year or tax year, the annual tax statement must be submitted…”

- New point 5: Supplement the regulation “the taxpayer that directly applies for taxpayer registration with a tax authority must not suspend its business if the tax authority has issued a notice that the taxpayer does not operate at the registered address” as prescribed in clause 4 Article 4 of Decree No. 126/2020/NĐ-CP of Vietnam’s Government.

Before: Applying regulation on management of other amounts payable to the state budget by tax authorities.

Above are 5 new points on tax administration during the taxpayer's business suspension, Customers and Members can view more new points at the Official Dispatch No. 5189/TCT-CS, issued by the General Department of Taxation of Vietnam on December 07, 2020.

Thuy Tram

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