Tax administration for suspension of business

On 19/10/2020, the Government issued Decree No. 126/2020/ND-CP detailing regulations a number of articles of the Law on Tax Administration. Accordingly, This Decree elaborates some Articles of the Law on Tax administration on the management of taxes and other amounts payable to the state budget, excluding regulations on tax administration of enterprises having related-party transactions, use of invoices and documentation, administrative penalties for tax-related offences, invoice-related offences and customs offences.

✨According to Article 37 of the provisions on notices when suspending operations and business in the Tax Administration Law, which was passed by the National Assembly on 13/06/2019 and took effect from 01/07/2020, the organization, business households and individuals subject to business registration suspend operation or business for a definite time or resume operations and business before the notice period in accordance with the Law on Enterprises and other regulations. of relevant laws, the tax authority shall base itself on the notice of the taxpayer or a competent state agency to perform tax administration during the time the taxpayer suspends operations, does business or continues to operate. conduct business ahead of time in accordance with this Law.

📌If the taxpayer is an organization, household business, or individual business that is not required to apply for business registration, the business suspension notice shall be sent to the supervisory tax authority at least 01 working day before the suspension date.

📌This Decree clearly stipulates the tax administration for taxpayers during the temporary suspension of business operations as follows: Taxpayers must make a notification when suspending business according to the provisions of Article 37 of the Law on Administration of Taxpayers, specifically:

The basis for determining the time the taxpayer suspends business:

⭐If the taxpayer applies for taxpayer registration together with enterprise/cooperative/business registration, the business suspension time is also the suspension time of the enterprise/cooperative recorded by the business registration authority on the National Enterprise Registration Information System. The business registration authority shall send electronic information about the suspension to the tax authority by the business registration authority.

⭐In case the business suspension is accepted, notified, or requested by a competent authority, the business suspension time will be that written on the document issued by such competent authority, which will be sent by the issuing authority to the supervisory tax authority of the taxpayer within 03 working days from its issuance date.

⭐ If the taxpayer is an organization, household business, or individual business that is not required to apply for business registration as prescribed in 2 points above, the business suspension notice shall be sent to the supervisory tax authority at least 10 working days before the suspension date or receiving a notice of approval from the tax authority to suspend business operations, the duration of the business suspension shall be stated in the tax agency's notice.

✨Also according to the Decree, during the time taxpayers suspend business operations, taxpayers are not required to submit tax returns, if no tax obligations arise during the period of suspension of business operations.

✨In case the taxpayers (except business households paying tax by the presumptive method) temporarily stop operating or do business for less than a calendar year or a fiscal year, they still have to submit annual tax finalization dossiers, including cases to the deadline for submission of finalization dossiers for taxpayers who are still in the period of suspension of business operations; No need to submit the report on the use of invoices if the use of invoices does not arise in accordance with the law on invoices.

📌Business households paying tax by the presumptive method of temporarily suspending operations or doing business may be re-determined tax obligations by the tax authorities to suit their actual time of operation and business.

📌Taxpayers are not allowed to use invoices, except for the case of performing contracts signed before the time of suspension of operation and business and approved by tax authorities in accordance with the law on invoices.

📌Taxpayers must comply with decisions and notices of tax administration agencies on urging debt collection, enforcement of administrative decisions on tax administration, inspection and examination of tax law observance, and handling of tax laws. administrative violations on tax administration according to the provisions of the Law on Tax administration.

✨ The decree also clearly stipulated that taxpayers who resume their operation and business before the deadline must notify the business registration agency, competent state agency, and tax agency according to regulations. Taxpayers who resume operations or do business before the deadline or after the suspension period ends, their business must fully comply with tax regulations and submit tax returns and report on the use of invoices as prescribed.

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