THE BUSINESS SUSPENSION PROCEDURE. DOES THE BUSINESS SUSPENDING BUSINESS NEED TO SUBMIT A REPORT OR

Answer:

Thank you for sending your questions to FDVN Law Firm (FDVN). For the consulting requests of customers, after researching the relevant legal regulations, we have the following information to exchange:

1. Procedures and documents for suspension of business

Based on Clause 1, Article 206 of the Law on Enterprise 2020 and guided in Article 66 of Decree No. 01/2021/ND-CP. Accordingly, enterprises temporarily suspending business shall follow specific procedures as follows:

• The enterprise shall send a notification to the Business Registration Office of the province where the enterprise or its branch/representative office/business location is located at least 03 days before the planned date of suspension.
• Documents to be prepared:

• The notification of business suspension
• The resolution or decision and the copy of the minutes of meeting of the Board of Members of the multi-member limited liability company or partnership, or of the Board of Directors of the joint-stock company, or the resolution or decision of the owner of the single-member limited liability company on business suspension
• In case the enterprise authorizes another person to carry out the procedures, a power of attorney or an authorization contract with a copy of the authorized person's ID card is required.

• Procedure:

After receiving the application for enterprise registration, the Business Registration Office shall give a confirmation slip, examine the validity of received documents, and issue a certification that the enterprise or its branch/representative office/business location has registered the business suspension or resumption of business ahead of schedule within 03 working days from the receipt of satisfactory documents.

In case of an enterprise wishes still suspended after the notified suspension period, another notification must be sent to the Business Registration Office at least 03 days before the planned date of suspension. Each notified suspension period must not exceed one year.

2. Does the business suspending business need to submit a report or tax finalization file?

This issue is specified in Clause 2, Article 4 of Decree No. 126/2020/ND-CP guiding the Law on Tax Administration:

"2. During the time the taxpayer suspends business:

a) 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.

…c) The taxpayer must not use invoices and is 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.

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

Thus, during the time that the enterprise suspends its business, the enterprise is not required to submit tax declaration dossiers, except for the case that 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.

Above is FDVN LAW FIRM’s opinion for your consulting requests based on researching the relevant legal provisions. Hopefully, FDVN’s advice would be helpful to you.

Nguyen Thi Huyen Trang- FDVN Law Firm 

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