Tax Services for Dissolution Company in Vietnam

Tax finalization is a mandatory legal procedure for businesses upon dissolution. Carry out tax finalization when dissolving the company to ensure compliance with tax laws and terminate the tax obligations of the business. When dissolving a company, many companies are still confused about tax finalization procedures. In the article below, Viet An Law Firm – Tax Agent will present the legal content related to tax services fordissolution company in Vietnam according to the provisions of current tax law.

What does tax finalization include when a business terminates operations?

According to the provisions of Clause 10, Article 3 of the Law on Tax Administration 2019, tax finalization declaration is the determination of the tax amount payable of the tax year or the period from the beginning of the tax year to the termination of the activity giving rise to the tax obligation. or the time from the time it arises until the end of the activity giving rise to the tax liability according to the provisions of law.

Therefore, tax finalization when an enterprise terminates operations is the enterprise’s determination of the taxes that need to be paid for the period from the beginning of the tax year until the termination of operations, generating tax obligations. Tax finalization upon company dissolution includes corporate income tax finalization and personal income tax finalization.

Company taxes need to be settled for dissolution

When dissolved, the enterprise must finalize all taxes with the tax authority from the time of establishment to the time of the decision to dissolve the enterprise, including:

• Value added tax: a tax calculated on the added value of goods and services arising in the process from production, circulation to consumption.
• Personal income tax: can be understood as a direct tax, levied on several high-income individuals.
• Corporate income tax: is a direct tax, levied directly on taxable corporate income. Corporate income tax includes business income from the production and trading of goods, services, and other types of income according to the provisions of law.

What does a company need to do when finalizing taxes for dissolution?

The law stipulates that an enterprise can only be dissolved when it ensures payment of all debts and other property obligations and is not in the process of resolving disputes at Court or Arbitration. When finalizing taxes for dissolution, businesses must:

• Handle all debts including debt collection and repayment. Liquidate fixed assets and labor contracts, close bank accounts in the business’s name;
• Enterprises need to report labor reduction and close social insurance books;
• Send a document to the tax authority to request an inspection of tax settlement for your unit at the tax administration authority;
• Carry out finalization of taxes arising during operations and during the process of finalizing taxes and taxes, closing tax codes to complete settlement procedures;
• After performing the above tasks, the dissolved enterprise will carry out tax finalization procedures and close the tax code.

To finance and effective maximization, companies should utilize tax services for dissolution company in Vietnam by Viet An Law – Tax Agent. Our service is packaged and can limit legal risks for your business. Please contact for more information.

Tax finalization dossier for dissolution company

Tax finalization documents for dissolved companies are specified in Article 43 of the Law on Tax Administration 2019 including:

• Tax finalization declaration;
• Financial statements up to the time of company dissolution;
• Other relevant documents to serve tax finalization;
• Power of Attorney for Viet An Tax Agent to perform tax finalization when the company is dissolved.

In particular, the taxes and revenues that must be declared until the time of dissolution are specified in Clause 6, Article 8 of Decree 126/2020/ND-CP amended and supplemented by Decree 91/2022/ND-CP. Dossiers and forms of these taxes and receivables are specified in Appendix I issued with Decree 126/2020/ND-CP amending and supplementing Decree 91/2022/ND-CP. Specifically, for corporate income tax finalization declaration dossiers:

The corporate income tax finalization dossier according to the revenue-expense method includes:

• Corporate income tax finalization declaration according to form No. 03/TNDN;
• Appendix of results of production and business activities according to form No. 03-1A/TNDN (production, trade, services, except security and defense companies), 03-1B/TNDN (banking, credit), 03-1C/TNDN (securities company, securities investment fund management company);
• Loss transfer appendix according to form 03-2/TNDN;
• Some other appendices depending on the business line of the enterprise.
• Corporate income tax declaration according to form No. 04/TNDN;
• Annual financial statements according to the provisions of accounting law and independent audit law (except for cases where financial statements are not required as prescribed).

In addition, tax settlement documents also include documents related to personal income tax, value added tax and several other revenues depending on the industry in which the business operates. Records and forms of these taxes and receivables are also detailed in Appendix I attached to Decree 126/2020/ND-CP, as amended and supplemented by Decree 91/2022/ND-CP.

Deadline for submitting tax finalization documents when dissolving an enterprise

The deadline for submitting tax finalization documents when dissolving an enterprise is specified in Article 44 of the Law on Tax Administration 2019 no later than the 45th day from the date of dissolution of the enterprise.

However, in some cases, businesses can extend the deadline for submitting tax finalization declaration documents, specifically: if taxpayers are unable to submit tax declaration documents on time due to natural disasters, catastrophes, epidemics, fire, or unexpected accidents, the head of the directly managing tax agency will extend the tax declaration filing deadline for 60 days from the date of expiry of the tax declaration filing deadline.

In this case, the taxpayer must send to the tax authority a written request for an extension of tax declaration submission before the deadline expires, clearly stating the reason for the extension request with confirmation from the issuing People’s Committee. The commune or the police of the commune, ward, or town where the case arises will be extended.

Debt payment order of a dissolved enterprise

According to the provisions of Clause 5, Article 208 of the Enterprise Law 2020, it is stipulated that enterprise debts are paid in order of priority upon dissolution as follows:

• Salary arrears, severance pay, social insurance, health insurance, unemployment insurance as prescribed by law, and other employee benefits according to the collective labor agreement and labor contract signed contract;
• Tax debt;
• Other debts.

Exempting tax for dissolution company

In some cases, the law stipulates that a dissolved company does not have to carry out tax finalization. According to Article 110 of the Law on Tax Administration 2019, cases of dissolution and termination of operations without having to perform tax finalization include:

• Taxpayers who are subject to paying corporate income proportional tax on revenue from sales of goods and services according to the provisions of the law on corporate income tax shall terminate their operations;
• The taxpayer terminates operations but from the time of establishment to the time of termination, the business has not generated revenue and has not used invoices.

Penalties for company dissolved without tax finalization

The arising of payable taxes that the enterprise does not pay when terminating operations may constitute tax evasion and be subject to administrative sanctions according to Article 17 of Decree 125/2020/ND-CP. In case of constituting a crime with a level of conduct that causes great damage to the state budget, the enterprise may be criminally prosecuted under Article 200 (Tax evasion) of the Criminal Code 2015.

Tax service of Viet An Law Firm – Tax Agent

• Consulting on tax regulations in general and tax settlement when the business terminates operations in particular;
• Consulting on regulations, orders, procedures, and documents on tax finalization when the business terminates operations;
• Perform personal income tax finalization with client authorization, including preparing, completing, and submitting finalization documents to competent state agencies;
• On behalf of clients, amend and supplement documents, directly work with competent authorities when required;
• Perform other tax finalization related services when clients need.

If you have any questions or needs related to tax services for dissolution company in Vietnam, please contact Law Firm – Viet An Tax Agent for the best advice and support!