Tax obligations upon dissolution

Tax obligations when dissolving a business.

Tax settlement is one of the most important procedures when dissolving a business. Businesses need to fulfill all tax obligations before receiving a dissolution certificate. Below is the information.

Tax settlement upon dissolution

Legal regulations regarding tax settlement:

According to Article 45 of the Law on Tax Administration No. 38/2019/QH14, enterprises must finalize their tax returns within 45 days from the date of the dissolution decision.
Circular 80/2021/TT-BTC provides detailed guidance on tax settlement when a business is dissolved.
The tax authorities must complete the tax audit and inspection within 30 days of receiving all necessary documents.

Types of taxes that need to be settled:

Corporate Income Tax (CIT)
Value Added Tax (VAT)
Excise tax (if applicable)
Personal Income Tax (PIT) of employees
Other taxes and fees as prescribed.

Procedures with the tax authorities

Tax settlement process upon dissolution

Step 1: Notify the tax authorities.

Send a notice of business dissolution to the tax authority directly responsible for its management.
Deadline: within 7 working days from the date of the dissolution decision.

Step 2: Prepare and submit tax return documents.

Prepare financial statements up to the point of deciding to dissolve the company.
Complete the tax return form for each type of tax.
Please cancel any unused invoices (if any).

Step 3: Pay off tax debts

Pay all outstanding taxes (if any).
Work with the tax authorities to confirm the amount of tax payable.

Step 4: Receive confirmation of tax obligation fulfillment.

The tax authority issues a document confirming that the business has fulfilled its tax obligations.

Notes regarding invoices and accounting records.

Invoice processing

Cancel unused invoices in accordance with the regulations stipulated in Circular 68/2019/TT-BTC.
Prepare a list of used and unused invoices to submit to the tax authorities.
For electronic invoices, follow the procedures for closing the tax code on the General Department of Taxation's electronic portal.

Accounting records:

Prepare financial statements up to the time of dissolution in accordance with the provisions of the Accounting Law.
Ensure that accounting records fully and accurately reflect the financial situation of the business.
Retain accounting books and documents as required (usually for 10 years) after dissolution.

Taxes payable upon dissolution

1. Corporate Income Tax:

Financial statements from the beginning of the fiscal year to the time of dissolution.
Applicable tax rate: 20% on taxable income
Pay attention to any income from the sale of assets (if applicable).

2. Value Added Tax:

Declare and pay VAT for the tax incurred up to the time of dissolution.
Determine the amount of VAT that can still be deducted (if any).

3. Personal Income Tax:

Settlement of personal income tax withheld from employees.
Complete the obligation to deduct and pay taxes on final payments.

Tax settlement services for dissolution from MAN

MAN provides professional tax settlement services for business dissolution, with a team of experienced accounting and tax experts to help businesses fulfill their tax obligations quickly and in accordance with regulations.

Conduct a comprehensive review and audit of accounting records and invoices.
Prepare and submit complete and accurate tax return documents.
Representing the company in dealings with tax authorities and providing explanations when necessary.
Providing advice on the optimal solution for handling tax issues.
Assisting with tax debt settlement and negotiations with tax authorities (if applicable).