During operation, many enterprises were forced to take measures of business suspension due to incapability to maintain. This is considered the right of each enterprise, however to ensure legal implementation, enterprises need to pay attention to some tasks that need to be fully carried out as follows..
Notice of business suspension
In case an enterprise temporarily suspends business, the enterprise shall send a notice to the Business Registration Office where the enterprise is headquartered no later than 03 working days before the date of business suspension. In case an enterprise wishes to continue business suspension after the end of the notified period, they must implement the procedures of notifying the Business Registration Office at least 03 working days before the date of continued temporary business suspension.
Dossiers for company business suspension include:
– Notice of business suspension;
– Meeting minutes of the Board of directors/Council of members; Decision of Owner; Decision of the Board of members/Board of directors on business suspension;
– Authorization document for the applicant;
Unusual information announcement: The company must publish on the website, publications (if any) and publicly post at the company’s headquarters and business locations unusual information in the company’s information within 36-hour period from the partial or the whole business suspension.
Business suspension period
The law clearly stipulates that the business suspension period of each notification must not exceed one year. Therefore, at the end of the business suspension period, if the enterprise with demand to continue business suspension must carry out notice procedures to the Business Registration Office.
For example: On January 1, 2021, the enterprise submitted a business suspension application to the Department of Planning and Investment. If the documents are valid, the business will be allowed to temporarily suspend business from January 4, 2021.
Tax obligation
Pursuant to Clause 2, Article 4 of Decree 126/2020/ND-CP, it is stipulated that enterprises are not required to submit tax declaration documents, except the cases of business suspension for less than a full month, quarter, calendar year or financial year where enterprises still have to submit monthly and quarterly tax declarations; annual financial statements. Enterprises are not allowed to use invoices and are not required to submit reports on invoice use. In case an enterprise is approved by the tax authority to use invoices in accordance with the law on invoices, it must submit a tax declaration and submit a report on invoice use according to regulations.
Accordingly, enterprises must comply with decisions and notices of tax authorities on urging debt collection, enforcing administrative decisions on tax management, and inspecting and checking compliance with tax laws, handling administrative violations of tax administration according to the provisions of the Law on Tax Administration.
Note that, enterprises registering for tax directly with the tax authority are not allowed to register for business suspension upon notice of tax authority when taxpayer is not operating at the registered address.
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License fee
Pursuant to Point c, Clause 2, Article 1 of Decree 22/2020/ND-CP, the operating fee payer must send a document to the directly managing tax agency regarding the temporary suspension of production and business activities in the calendar year. Enterprises will not be required to pay license fees for the year of business suspension with the following conditions:
– Application for business suspension to tax authorities before January 30 every year.
– Not completing payment for license fee for the year of business suspension.
In case that the temporary suspension of production and business activities do not meet the above conditions, the license fee for the whole year must be paid.
Fines for violating the responsibility to notify on business suspension
Note that if the Enterprise does not notify or not notify on time to the business registration agency about the time and duration of temporary business suspension, it can be fined from 10,000,000 VND to 15,000,000 VND.
Legal basis:
- Enterprise Law 2020;
- Decree 01/2021/ND-CP on business registration;
- Circular 01/2021/TT-BKHDT guiding on business registration issued by the Minister of Planning and Investment.
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