The validity of tax code may be terminated (or may be referred to as deactivation of tax code) due to variety of reasons. However, the validity of the tax code may be reactivated if the taxpayer complies with the procedure for reactivating tax code (or may be referred to as the procedure for recovering the tax code) as prescribed by law. For the case that the enterprise has its tax code being deactivated for the reason of non-operating at the head office as registered on the Enterprise Registration Certificate (“ERC”), what are the requirements and procedure for reactivating tax code that such enterprise should notice?
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When tax code is deactivated for the reason of non-operating at the head office in accordance with the law?
To be able to conclude that the enterprise is still or no longer operating at the head office as registered on the ERC, the tax authority and local government shall verify the operating status of the enterprise and make minutes of verifying the operation status of taxpayers with respect to form No. 15/BB-BKD as prescribed in Circular 105/2020/TT-BTC.
In case the enterprise do not have any operation in the registered head office, the tax authority will issue the notice of the taxpayer’s non-operation at the registered address and updates the enterprise’s tax code with the status of “taxpayer’s non-operation at the registered address” in the Tax Registration System and the National Business Registration System. In addition, the tax authority must also publicise the Notice of taxpayer’s non-operation at the registered address on the portal of the General Department of Taxation[1]. After this period, the tax authority together with the business registration authority shall revoke the ERC, Operation registration certificate of branch, representative office, and business location[2]. Then, the tax authority will proceed to deactivate the tax code of the enterprise which is verified to be no longer operating at the head office and send a document with a list of deactivated tax code to the business registration authority to synchronise the legal status of the enterprise with the tax registration authority.[3]
In addition, enterprises whose tax code is deactivated for the reason of non-operating at the head office shall be sanctioned from VND 5,000,000 to VND 10,000,000 for operating in location other than the registered head office.[4]
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Requirement for reactivating tax code for enterprises in case of tax code being deactivated for the reason of non-operating at the head office
As mentioned, if the enterprise is verified as not operating at the registered head ofice, the tax code will be deactivated and the tax code will not be used in economic transactions from the date on which the tax authority notices the deactivation. The tax code is invalidated and cannot be reused. In addition, enterprises are also required to terminate the validity tax code of their dependent units[5]
However, enterprises can still apply to reactivate the deactivated tax code. According to Article 40.2(c) of the Law on Tax Administration 2019, the enterprise is able to file application dossier to the directly management tax authority for requesting to recover the tax code in case that the tax authority issued a notice of the taxpayer’s non-operation at the registered address, but the competent authority has not issued a Decision on revoking the ERC or decision on revocation of the establishment and operation license or equivalent license. Accordingly, the enterprise must (i) have a written request to reactivate the tax code as well as written commitment to fulfill the tax obligations, and (ii) and comply with the penalties for tax-related administrative violations. Even in the case that an enterprise has had its ERC revoked, but then the competent authority cancels the decision on revocation in writing, the enterprise can still reactivate its tax code if it complies with the procedures for reactivating tax code.[6]
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Procedures for reactivating tax code for enterprises in case of tax code being deactivated for the reason of non-operating at the head office
Before reactivating the tax code, the enterprise shall fully submit tax declaration applications, report on the use of missing invoices, and complete the full amount of tax and other revenues under the state budget with the directly management tax authority.[7]
Step 1: Submitting an application dossier on requesting for tax code reactivation.[8]
The dossier shall include:
- A written request for reactivating tax code;
- Other relevant documents.
For the case where the enterprise has had its ERC revoked but has a written cancellation of the revocation document from a competent authority, the application dossier for reactivating tax code shall include [9]:
- A written request for reactivating tax code;
- Copy of written cancellation of the decision on revocation of ERC of the competent authority.
Method of submission of the application dossier: directly at tax offices, by post, through the electronic transaction portal of the tax authorities and the National Business Registration System
Step 2: Obtaining the result
Within 03 days from the date of receipt of the application dossier for tax code reactivation from the enterprise, the tax authority will send a Notice of reactivation of the tax code, or a notice of reactivation of the tax code following the managing entity (if any) and reprint the Certificate of tax registration or Notice of tax code if the enterprise filed the original with the tax authority[10]. In case the application is incomplete, the tax authority must notify the enterprise within 02 working days from the date of receipt of the application.[11]
Step 3: Updating tax code status
The tax authority updates the tax code status for enterprise on the tax registration system.
From the date on which the business registration authority’s decision on recovery of the legal status of the enterprise takes effect or the tax authority announces the reactivation of the tax code, the tax code may continue to be used in economic transactions[12].
The above is an overview of the procedure for reactivating tax code for enterprises in case of tax code being deactivated for the reason of non-operating at the head office. If you have difficulties in finding a Law Firm to advise and support in the relevant legal field, please contact us.
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[1] Article 17.2.b Circular No. 105/2020/TT- BTC.
[2] Article 17.5 of Circular No. 105/ 2020/TT-BTC.
[3] Article 17.6 of Circular No. 105/2020/TT-BTC.
[4] Article 6.2 Decree No. 98/2020/ND-CP.
[5] Article 39.3 Law on Tax Administration 2019.
[6] Article 18.1.a of Circular No. 105/2020/TT-BTC
[7] Article 6.4 Decree No. 126/2020/ND-CP.
[8] Article 41.2 Tax Administration Law 2019.
[9] Article 18.1.a Circular No. 105/2020/TT -BTC.
[10] Article 19 of Circular 105/2020/TT-BTC
[11] Article 41.3.b of the Law on Tax Administration 2019.
[12] Article 40.3 Tax Administration Law 2019.
