Regulations on tax administration applicable to taxpayers during suspension of operations or business

Decree No. 126/2020/ND-CP has just been issued by the Government on October 19th, 2020 detailing a number of articles of the Law on Tax Administration, which specifies the criteria for quarterly tax declaration for value-increased tax and personal income tax.

Accordingly, this Decree details the implementation of a number of articles of the Law on Tax Administration applicable to the management of taxes and other state budget revenues, except for the provisions on tax administration for enterprises with associated transactions, applying invoices and vouchers, sanctioning administrative violations in the field of tax and invoices, sanctioning administrative violations in the customs domain. In which, there is a remarkable content about tax administration for taxpayers during the period of business suspension.

According to this Decree, taxpayers shall notify when suspending their operation or business in accordance with Article 37 of the Law on Tax Administration and the bases for determining the time that taxpayers suspend operations and do business as follows:

– For taxpayers with tax registration together with enterprise registration, cooperative registration, business registration according to the provisions of Clause 1, Article 37 of the Law on Tax Administration:

Is the period of business or cooperative suspension recorded by the business registration agency or the cooperative registration agency on the National Information System on enterprise registration and cooperative registration. The business registration agency and the cooperative registration agency shall send information on the registration of business suspension of the enterprise or the cooperative electronically to the tax authority via the system of exchanging information on business registration and tax registration within 01 working day or no later than the next working day from the date on which the business registration agency or cooperative registration agency records it on the National Registration Information System. enterprise, cooperative registration.

– For taxpayers who are approved, notified or requested by competent State agencies to suspend operations or business according to the provisions of Clause 1, Article 37 of the Law on Tax Administration:

Is the time recorded in the document issued by a competent state agency. The competent state agency shall send the document to the tax agency directly managing the taxpayer within 03 working days from the date of issuance of the document.

– For taxpayers being organizations, business households and individuals that are not required to register their business under Clause 2, Article 37 of the Law on Tax Administration:

To notify the suspension of operations and business to the supervisory tax authority within 01 working day before the business is suspended. The tax authority shall send a confirmation notice to the taxpayer of the time the taxpayer registers to suspend operations or business within 2 working days from the date of receipt of the notice from the taxpayer. Taxpayers may suspend operations or do business for no more than 1 year for 1 registration. In case the taxpayer is an organization, the total period of temporary suspension of business or operation does not exceed 2 years for 2 consecutive registration.

– During the time the taxpayer suspends operation or business:

Taxpayers are not required to submit tax declaration dossiers, unless they suspend their operation or business for an entire month, quarter, calendar year or fiscal year, they must still submit monthly or quarterly tax declaration dossiers; year settlement records.

Business households and individuals that pay flat tax, suspend their operations or do business, are re-determined by tax authorities in accordance with regulations of the Minister of Finance.

Taxpayers are not allowed to use invoices and are not required to submit reports on use of invoices. If the taxpayer is approved by the tax agency to use invoices in accordance with the law on invoices, he / she must submit a tax declaration dossier and submit a report on the use of invoices according to regulations.

Taxpayers must abide by decisions and notices of tax administration agencies on urging debt collection, coercive enforcement of administrative decisions on tax administration, inspection and examination of tax law observance, and handling administrative violations in tax administration according to the provisions of the Law on Tax Administration.

If the taxpayer resumes its operation or resumes business on time as registered, it is not required to notify the agency where the business is registered for suspension of operation or business as prescribed.

In case the taxpayer resumes its operation and business activities ahead of time, it must notify the agency where the business is registered to suspend operations and business and fully comply with tax regulations, submit tax declaration and submit reports on the use of invoices according to regulations.

For taxpayers falling into the cases specified at Point c, Clause 1 of this Article, they shall notify the supervisory tax authority at least 01 working day before resuming operations and resuming business before the due date.

Taxpayers who register tax directly with tax offices are not allowed to register for suspension of business operations when the tax authority has issued a notice of taxpayer’s inactivity at the registered address.

This Decree takes effect on December 5th, 2020.

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