Is business suspension required to finalize CIT and PIT and have to submit financial statements? Is there a license fee, do you have to pay social insurance?…

I. Suspending business must pay license tax?

According to Clause 3, Article 4 of Circular 302/2016/TT-BTC dated November 15, 2016 of the Ministry of Finance:

“3. Organizations, individuals, groups of individuals, production, business or newly established households, which are granted tax registration and tax identification numbers and enterprise identification numbers during the first 6 months of the year, shall pay the fee. all year subjects; if established and granted tax registration and tax identification number and enterprise identification number within the last 6 months of the year, 50% of the annual license fee shall be paid.

Organizations, individuals, groups of individuals, production and business households but do not declare license fees must pay license fees for the whole year, regardless of the time of discovery is in the first 6 months of the year. or the last six months of the year.

Organizations, individuals, groups of individuals, households that are engaged in production and business and have notified the tax authority of the suspension of business for the whole calendar year are not required to pay license fees for the year of suspension. business. In case of business suspension for less than a full calendar year, the license fee for the whole year must still be paid.

SO:

– If you suspend your business for the whole year, you will not have to pay license tax

– If the business is suspended for a full year, the license fee must be paid.

II. Suspending business has to file tax finalization?

According to Article 14 of Circular 151/2014/TT-BTC stipulating:

“d) Taxpayers who do not incur tax obligations during the period of business suspension are not required to submit tax returns for the period of business suspension.

In case taxpayers suspend their business for less than a calendar year or a fiscal year, they still have to submit annual tax finalization dossiers.

It mean:

– If the business is suspended for a full calendar year or a fiscal year, the tax finalization dossier is not required

– If the suspension is not for the whole calendar year or fiscal year, the tax finalization dossier must still be submitted.

dd.1) For taxpayers who carry out business registration procedures at the business registration office, they must notify in writing of business suspension or resumption of business activities to the business registration office. where taxpayers have registered according to regulations.

The business registration authority is responsible for notifying the tax authority of the information that the taxpayer suspends business or resumes business activities within 02 (two) working days from the date of receipt of the business registration document. taxpayer copy. In case the taxpayer registers to suspend business, the tax authority is responsible for notifying the business registration agency of the tax liability owed to the state budget of the taxpayer within 02 (two) days at the latest. working days from the date of receipt of information from the business registration authority.

dd.2) For taxpayers subject to registration for issuance of tax identification numbers directly at tax authorities, before temporarily suspending business, taxpayers must notify in writing to the tax authorities directly managing them. at least 15 (fifteen) days before the business suspension. The content of the notice includes:

– Name, head office address, tax identification number;

– The business suspension period, the start date and the end date of the suspension period;

– Reason for business suspension;

– Full name and signature of the legal representative of the enterprise, the representative of a group of business individuals or the owner of the business household.

At the end of the business suspension period, taxpayers must declare tax as prescribed. In case the taxpayer goes out of business before the time limit specified in the notice of business suspension, a written notice must be sent to the tax authority directly managing and concurrently submitting tax declaration dossiers as prescribed.

What does a tax finalization file include?

According to Clause 3, Article 16 of Circular 151/2014/TT-BTC dated October 10, 2014

“b) The enterprise income tax finalization declaration dossier includes:

– A declaration for finalization of CIT according to form No. 03/TNDN.

– Annual financial statements or financial statements up to the time of decision on enterprise division, consolidation, merger, transformation, dissolution or termination of operation.

– One or several appendices attached to the declaration issued together with Circular No. 156/2013/TT-BTC and this Circular (depending on the actual arising of the taxpayer).”

See More:  What does a tax finalization preparation file include?

CONCLUDE:

1. If the business is temporarily suspended for a full calendar year or a fiscal year (eg from January 1 to December 31), no tax obligations arise, then: -> NOT have to declare and pay license tax and  VAT , PIT, financial statements, tax finalization declarations.

Example 1:  on December 5, 2018 MVA company makes an official notice of business suspension from January 1, 2019 to December 31, 2019 (ie the whole fiscal or calendar year), then in 2019 MVA company:

– No license tax in 2019

– No VAT, PIT, CIT finalization, PIT finalization.

– No need to file 2019 financial statements.

Example 2:  On December 5, 2018 company A sends an official notice of business suspension from January 1, 2019 to July 30, 2019, then company A: must do the following:

– Pay license tax for the second half of 2019 (Due to the last 6 months of the year)

– File declarations from August 2019 to December 2019, financial statements and tax finalization at the end of the year normally.

2. If the business is temporarily suspended for less than a calendar year or a fiscal year =>  then the license fee, financial statements, finalization of CIT, PIT must be paid…

Example 3:  On February 5, 2018 company A sends an official notice of business suspension from March 1, 2018 to February 28, 2019 (ie, not a full fiscal or calendar year), then Company A must pay the following:

2018 :

– Pay license tax for the whole year 2018.

– Submit tax returns for the months of January 2018 – February 2018, financial statements and tax finalization at the end of the year.

In 2019:

– Pay license tax for the whole year 2019. (Due to the first 6 months of the year)

– Submit tax returns for the months from 3/2019 to 12/2019, financial statements and year-end tax finalization.

III. Do you have to pay social insurance if you suspend your business?

According to Article 88 of Law No. 58/2014/QH13 of the Law on Social Insurance stipulates:

“first. The suspension of contributions to the retirement and survivorship fund is regulated as follows:

a) In case the employer encounters difficulties and has to suspend production and business, leading to the inability of the employee and the employer to pay social insurance premiums, the payment to the retirement fund may be suspended. brain and death within a period not exceeding 12 months;

b) At the end of the period of suspension of payment as prescribed at Point a of this Clause, the employer and the employee shall continue to pay social insurance premiums and make compensation for the period of suspension of payment. late payment as prescribed in Clause 3, Article 122 of this Law.”

According to Article 16 of Decree 115/2015/ND-CP stipulating:

1. Cases of temporary suspension of payment to the retirement and survivorship fund:

a) Suspend production and business for 01 month or more due to difficulties when changing structure or technology or due to economic crisis or recession or implementation of State policies when restructuring the economy. or fulfill international commitments;

2. Conditions for temporary suspension of payment to the retirement and survivorship fund:

– An employer who falls into one of the cases specified in Clause 1 of this Article may suspend payment to the retirement and survivorship fund when one of the following conditions is met:

a) Unable to arrange jobs for employees, in which the number of employees participating in social insurance must temporarily quit from 50% of the total number of employees present before the temporary suspension of production or business or more. go up;

3. Time to suspend payment to the retirement and survivorship fund:

a) The period of suspension of payment to the retirement and survivorship fund is monthly and must not exceed 12 months. During the period of temporary suspension of contributions to the retirement and survivorship fund, the employer still makes contributions to the sickness and maternity fund, the labor accident and occupational disease fund.

According to Articles 28 and 29 of Circular 59/2015/TT-BLDTBXH

“b) Employers who fall into the categories specified at Point a, Clause 2, Article 16 of Decree No. 115/2015/ND-CP, make a written request together with the list of employees at the time before the temporary suspension. production, business and at the time of request; the list of employees participating in social insurance must be temporarily laid off.

4. Within 10 working days from the date of receipt of the employer’s application file, the social insurance agency is responsible for settling the temporary suspension of contributions to the retirement and survivorship fund; in case of non-settlement, it must reply in writing and clearly state the reason.

– The time to suspend payment to the retirement and survivorship fund is counted from the month the employer makes a written request.”