When an enterprise suspends its business operation, not only must carry out the suspension procedures with the Business Registration Office but also must fulfill tax duties to complete the suspension. Hereinafter, Dream Law will provide you with information about tax duties to do when the business is suspended.
1. Tax duties before suspending business
According to previous regulations, enterprises must fulfill their outstanding tax duties to the State budget before suspending their business.
However, the current law stipulates that in case an enterprise suspends its business and still owes tax, this amount can be paid during the suspension. Therefore, at present, when the business is suspended, the enterprise proceeds to prepare and submit the dossier at the Business Registration Office without having to fulfill the outstanding tax duties before filing.
For the content of the dossiers and procedures for business suspension, please refer to the following article: https://dreamlaw.vn/en/enterprise-suspension/
2. Tax duties while suspending business
In case the enterprise owes tax to the State budget, the enterprise needs to complete that amount with the tax authority during the period of business suspension.
If during the period of business suspension, the enterprise does not have a tax duty, it will not have to file tax return and vice versa.
Therefore, if the enterprise has no tax debt and no tax liability arises during the suspension period, the duty is not required during this period.
3. Tax duties after suspending business
3.1. License charges duty
When suspending its business operation, an enterprise is exempt from paying license charges when it meets the following conditions:
– A written request for business suspension sent to the tax authority before January 30.
– Have not paid the license charges of the year applying for suspension.
– Suspension for full calendar year or fiscal year.
In case of suspension of production and business without meeting the above conditions, the enterprise must pay the license charges for the whole year.
The rates of license charges payment for enterprises are prescribed:
– The rate of license charges is 3,000,000 VND / year for enterprises with charter capital and investment capital of over 10 billion VND.
– The license charges rate is 2,000,000 VND for enterprises with charter capital or investment capital of 10 billion VND or less.
– The license charges is 1,000,000 VND for branches, representative offices, business locations, non-business units or other economic organizations.
The basis for collecting license charges is the charter capital stated in the business registration certificate or investment capital stated in the Investment Registration Certificate.
If there is a change in the charter capital or investment capital, the basis for determining the license charges rate shall be the charter capital or investment capital of the year preceding the year of calculation of the license charges.
To learn more about license charges, please read the following article: https://dreamlaw.vn/en/license-charges-in-2020/
3.2. Tax declaration
In the circumstances where the enterprise suspends its business operation for a period not in the calendar year or fiscal year, the enterprise must still submit quarterly tax reports, annual financial statements, and annual tax finalization report.
For example: An enterprise suspends its business from February 25 2020 to February 25 2021, it still has to submit its tax report for the first quarter of 2020, its financial statement for 2020 and the annual tax finalization report. 2020.
At the end of the suspension period, the enterprise shall make a full tax declaration according to regulations.
4. Enterprise suspension extension
The law stipulates that the enterprise suspension period cannot exceed one year and can be extended but the total consecutive period of suspension must not exceed one year.
After the expiration of the one-time suspension period, if the enterprise wants to continue to suspend its business, it must notify the business registration office at least 15 days before suspending the next period.
For example: Enterprise expires for the first suspension on July 30 2020. If the enterprise wants to continue to suspend on August 01 2020, a notice of suspension must be sent to the business registration office no later than July 15 2020.
If the enterprise is operating on August 01, 2020 and then suspends it, the enterprise must pay the license charges for the whole year 2020, the third quarter tax report, the 2020 financial statement and the tax finalization report year 2020.
Here are the duties that enterprises must fulfill when they suspend their businesses. To know more about this issue or other related matters, please contact: 024 6653 9546 to get further consultancy and support.
——————————————————
Dream Law LLC, Ltd.
Add: 401, No. 68, Phan Ke Binh road, Cong Vi ward, Ba Dinh district, Hanoi.
Hotline: 02466539546
Email: dreamlawllc@gmail.com
Website: https://dreamlaw.vn/
