Regulations on tax liability for suspension of operation

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Taxpayers are required to comply with the regulations on tax laws during the suspension of operation. Photo: Thuy Linh

Under Decree 126/ND-CP detailing some articles of the Law on Tax Administration, taxpayers are required to notify the suspension of operation. Foundations to determine the suspension period are also stipulated.

The suspension period of operation for the taxpayer who made tax registration together with enterprise registration, cooperative registration and business registration according to the provisions of Clause 1, Article 37 of the Law on Tax Administration is the period of business suspension of the enterprise and the cooperative updated by the business registration agency and the cooperative registration agency on the National Information System for enterprise registration and cooperative registration. In this case, the business registration agency or cooperative registration agency shall send information about the registration of operation suspension of the enterprise or the cooperative to the tax agency electronically within one working day or no later than the next working day from the date on which the business suspension of the enterprise and the cooperative is updated.

For the taxpayer who is approved, notified or requested for the suspension of operation or business by a competent State agency, the suspension period shall be stated in the written document issued by an authorised State agency. This agency shall send the document to the tax agency directly managing the taxpayer within three working days ofthe date of issuance of the document.

The taxpayer as an organisation, a business household or an individual not subject to business registration as prescribed in Clause 2, Article 37 of the Law on Tax Administration shall notify the suspension of operation and business to the tax agency directly managing them within aworking day at the latest before the business is suspended. The tax agency shall send a confirmation notice to taxpayers of the period the taxpayer registersthe suspension of business, operation within two working days from the date of receiving the notice from the taxpayer. The taxpayer may suspend operation or business for no more than a year for one registration. If the taxpayer is an organisation, the total period of business suspension must not exceed two years for two consecutive registrations.

Decree 126 stipulates that during the suspension period, the taxpayer is not required to submit a tax declaration, except inthe case that the taxpayer suspends operation or business for not full month or quarter, calendar year or fiscal year, monthly, quarterly tax declaration and tax finalisation must be submitted.

If a business household and an individual making tax payment by poll-tax register the suspension of operation or business, the tax agency will re-determine their tax liability.

Decree 126 states the taxpayer is not allowed to use invoices and is not required submitting a report on the use of invoices. In cases where the taxpayer is approved by the tax agency for using invoices in accordance with the law on invoices, they must submit a tax declaration and submit a report on the use of invoices.

The taxpayer must abide by the decisions and notices of tax administration agencies on debt collection and enforcement of administrative decisions on tax administration, inspection and examination of observance of tax law and sanctions for administrative violations of tax administration.

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In addition, when the taxpayer resumes its operation or business on time as registered, they are not required to notify the agency where the business suspension is registered. If the taxpayer resumes operation and business ahead of time, they must notify the agency where the business suspension is registered and must comply with tax regulations and submit a tax declaration and submit a report on the use of invoices according to regulations.