Procedures for terminating a business location

Closing a business location is something no company wants. But when the business location is not operating effectively, does not bring profits to the company, or even causes losses, terminating the business location is the optimal option that the business must choose. Today ANT Legal will guide you through the steps to terminate your business location as follows:

Legal basis

Decree 01/2021/ND-CP

Circular 105/2020/TT-BTC stipulating Instructions on tax registration 

PROCEDURES FOR TERMINATION OF BUSINESS LOCATION WITH THE TAX AUTHORITY (THIS IS AN IMPORTANT STEP)

1. For business locations in the same province as the parent company’s headquarters

Business locations in the same province or city as the parent company’s headquarters do not have their own tax code. The parent company will be responsible for declaring and paying taxes for the business location.

Therefore, when carrying out procedures for dissolution/termination of business location, the enterprise does not have to complete the procedure for closing the tax code at the tax authority, but the enterprise is responsible for completing the tax payment obligation according to the provisions of tax law.

2. For business locations in a different province from the parent company’s headquarters

For business locations in a different province/city from where the parent company’s headquarters is located with a dependent tax code, the enterprise must notify the termination of business location operations to the Tax Authority where the tax management of the business location is located to complete the tax payment obligation according to the provisions of tax law before completing dissolution procedures at the Business Registration Authority. (Pursuant to Article 72 of Decree 01/2021/ND-CP and Article 14 of Circular 105/2020/TT-BTC).

Pursuant to the provisions of Clause 1 and Point b Clause 3 Article 14 Circular 105/2020/TT-BTC, the dossier for termination of business location outside the province sent to the tax authority includes There are:

1. Documentary request for invalidation of tax code, form No. 24/DK-TCT issued with Circular 105/2020/TT-BTC.
2. Copy of Decision on dissolution of business location of the owner/Board of members/Board of directors
3. Copy of Business Location Registration License (depending on the tax authority).
4. Authorization letter for the applicant (if not performed by a legal representative).
5. Dossier to request invalidation of business location registration number

After the Tax Authority has inspected and confirmed that the business location has been approved fully pay the license fee and license fee declaration according to regulations, check and confirm that the branch does not owe taxes, the tax authority issues a notice to the taxpayer to terminate the validity of tax code form No. 18/TB-DKT and change the tax code status of the business location to the status “NNT stops operating but has not completed the procedure to deactivate the tax code” on the tax registration application system.

PROCEDURES, DOCUMENTS FOR DISSOLUTION/TERMINATION OF BUSINESS LOCATIONS AT THE DEPARTMENT OF PLANNING AND INVESTMENT

• Documents for dissolution/termination of business location operations are specified in Article 72 of Decree 01/2021/ND-CP specifically as follows:
  • Notice of dissolution (termination of operations) of business locations according to the form in Appendix II-20 issued with Circular 01/2021/TT-BKHDT.
  • Copy of the Decision to dissolve the business location of the owner/Board of members/Board of Directors
  • Power of attorney if the legal representative does not directly carry out the procedure.
  • Copy ID card/CCCD/Passport of the applicant.
  • Notification of the tax authority on Termination of validity of MST

AFTER FULL PREPARATION OF DOCUMENTS AS ABOVE, ENTERPRISES SUBMIT DOCUMENTS IN THE FOLLOWING 2 WAYS:

Option 1: Enterprises can submit their applications. directly at the Business Registration Office – Department of Planning and Investment of the province/city where the branch is located.

Method 2: Enterprises submit online documents on the National Business Registration Portal using a business registration account or digital signature.

Document processing deadline:

After receiving the application to terminate the operation of the business location business, the Business Registration Office sends information about the business location’s termination of operations to the Tax Authority.

Within 02 working days from the date of receiving information from the Business Registration Office, the Tax Authority sends comments on completing the business location tax payment obligation to the Business Registration Office.

Within 05 working days from the date of receiving the application for termination of business location, if the Business Registration Office does not receive a refusal from the Tax Authority, the Business Registration Office shall issue a notice of termination of business location.

NOTE TO KNOW WHEN TERMINATION OF A BUSINESS LOCATION BUSINESS

After completing the procedures for dissolution of the business location, the enterprise must clean up and remove the sign of the business location, and must notify customers and partners of the termination of business location operations.