During business suspension, are taxpayers required to pay taxes under the law in Vietnam?

During business suspension, are taxpayers required to pay taxes under the law in Vietnam? (Internet image) 

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

1. During business suspension, are taxpayers required to pay taxes under the law in Vietnam?

- For license fees: Pursuant to Point c, Clause 2, Article 1 of Decree 22/2020/ND-CP, an operating payer of the license fee that has notified its supervisory tax authority in writing of its suspension of production/business in a calendar year must not pay the license fee for that year of production/business suspension if it has sent a written notification of production/business suspension to its supervisory tax authority before the prescribed deadline for paying the license fee (January 30 annually) and has made no payment of the license fee for the planned year of suspension.

It must pay the license fee for the whole year if it does not meet the abovementioned conditions for production/business suspension.

- For Value Added Tax, Personal Income, Corporate Income: Pursuant to Clause 2, Article 4 of Decree 126/2020/ND-CP: During business suspension, the taxpayer is not required to submit tax declaration dossiers, unless the suspension begins in the middle of a monthly/quarterly/annual tax period, in which case the tax declaration dossier of that month/quarter/year must be submitted.

If there are any tax liabilities arising from the tax declaration dossier, the enterprise must still fully and timely pay the required taxes according to the tax filing deadline.

In addition, Clause 3, Article 206 of the Law on Enterprises 2020 stipulates that during the suspension period, the enterprise shall fully pay the unpaid taxes, social insurance, health insurance, unemployment insurance premiums and fulfill contracts with its clients and employees, unless otherwise agreed by the enterprise, creditors, clients and employees.

2. During business suspension, are taxpayers required to submit tax declaration dossiers in Vietnam?

According to Clause 2 of Article 4 of Decree 126/2020/ND-CP, tax administration during taxpayer’s business suspension is as follows:

During business suspension:

- The taxpayer is not required to submit tax declaration dossiers, unless the suspension begins in the middle of a monthly/quarterly/annual tax period, in which case the tax declaration dossier of that month/quarter/year must be submitted.

- For household businesses and individual businesses paying presumptive tax, tax authorities shall decide the tax payable upon their suspension in accordance with regulations of the Minister of Finance.

- The taxpayer must not use invoices and are not required to submit invoice use reports. In case the taxpayer is permitted by the tax authority to use invoices in accordance with invoice laws, the taxpayer shall submit the tax declaration dossier and invoice use reports as per regulations.

- The taxpayer shall implement the tax authority’s decisions and notices of debt collection, enforcement of tax decisions, inspection of compliance to tax laws and administrative penalties for tax offences in accordance with the Law on Tax administration.

Thus, according to the above regulations, during business suspension, the taxpayer is not required to submit tax declaration dossiers, unless the suspension begins in the middle of a monthly/quarterly/annual tax period, in which case the tax declaration dossier of that month/quarter/year must be submitted.

Nguyen Ngoc Que Anh

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