Circular 1454/CTHN-TTHT Hanoi 2021 on tax-related procedures upon merger

To: Northern Intermediate School of Transport
(Address: Kieu Ki commune, Gia Lam, Hanoi) Tax identification number: 0104017135

Responding to the Official Dispatch No. 07/TCMB-TV dated December 14, 2020 of Northern Intermediate School of Transport (hereinafter referred to as unit) on tax policy, the Hanoi Tax Department has comments as follows:

- Pursuant to the Law on Tax Administration No. 38/2019/QH14:

+ In Article 3:

“10. Declaration for tax finalization means the determination of the payable tax amount of a tax year or a period from the beginning of a tax year to the time of termination of an activity that gives rise to tax liability or a period from the time of commencement to the time of termination of an activity that gives rise to tax liability as prescribed by law.”

+ In Article 38 providing for tax registration in case of reorganization of enterprises:

"1. Upon the reorganization of enterprises, taxpayers that make tax registration together with enterprise registration, cooperative registration or business registration shall make tax registration together with enterprise registration, cooperative registration or business registration in accordance with law.

2. Upon the reorganization of enterprises, taxpayers that make tax registration directly with tax offices shall complete procedures for invalidation of tax identification numbers for divided, merged or consolidated organizations, or change information for split and newly-registered organizations, or make new registration or change information for new organizations after being divided and split or merged and consolidated.

+ In Article 39 providing for invalidation of tax identification numbers:

“1. Taxpayers that make tax registration together with enterprise registration, cooperative registration or business registration shall complete procedures for invalidation of tax identification numbers when falling into one of the following cases:

…

c) Being divided, merged or consolidated.

2. Taxpayers that make tax registration directly with tax offices shall complete procedures for invalidation of tax identification numbers when falling into one of the following cases:

…

c) Being divided, merged or consolidated;

…

4. A dossier of request for invalidation of a tax identification number must comprise:

a) A written request for invalidation of the tax identification number;

b) Other relevant papers.

5. Taxpayers that make tax registration together with enterprise registration, cooperative registration or business registration shall register dissolution or termination of operation at the enterprise registration, cooperative registration or business registration agencies in accordance with law. Before making registration at such agencies, taxpayers shall make registration with their managing tax offices in order to fulfill their tax payment obligation prescribed by this Law and other relevant laws.

6. Taxpayers that make tax registration directly with tax offices shall submit dossiers of request for invalidation of tax identification numbers to their managing tax offices within 10 working days after the date of issuance of operation termination or business termination documents or after completing contracts.”

+ In Article 44 providing for deadlines for submission of tax declaration dossiers:

“4. The deadline for submission of tax declaration dossiers for the case of termination of operation or termination of a contract, or reorganization of an enterprise is the 45 ^th day from the date such event occurs.”

+ In Article 68 providing for fulfillment of the tax payment obligation upon reorganization of enterprises:

“2. To-be-split, to-be-consolidated or to-be-merged enterprises shall fulfill the tax payment obligation before the splitting, consolidation or merger. If they fail to fulfill the tax payment obligation, the split enterprises and splitting enterprises, consolidating enterprises or merging enterprises shall fulfill the tax payment obligation.”

- Pursuant to the Ministry of Finance’s Decree No. 95/2016/TT-BTC dated June 28, 2016, providing guidance on tax registration, defines as follows:

+ In Article 16 providing for cases, time limits and places for submission of dossiers for invalidation of tax identification numbers:

“1. Cases of invalidation of tax identification numbers

a) For enterprises:

…

- Enterprises are reorganized (divided, separated, merged or consolidated);

b) For economic organizations, other organizations, and business households, groups of individuals or individuals:

…

- Economic organizations are reorganized (divided, merged or consolidated), or have their attached units transformed into independent units or vice versa, or attached units of certain managing units are transformed into attached units of other managing units.

…

3. Obligations to be performed by taxpayers before having their tax identification numbers invalidated

a) For enterprises, economic organizations, other organizations, contractors or investors participating in oil and gas contracts, and foreign contractors:

- A taxpayer shall submit a report on the use of invoices under the law on invoices;

- A taxpayer shall fulfill the tax obligations according to regulations...;

- For a managing unit with attached units, all these attached units shall complete procedures for invalidation of tax identification numbers before their managing units’ tax identification numbers are invalidated.

…

4. Time limit and places for submission of dossiers for invalidation of tax identification numbers

a) For enterprises: The tax office shall invalidate tax identification numbers of enterprises within the time limit for the business registration agency to update the legal status of (dissolved) enterprises in the national database on enterprise registration;

b) For economic organizations, other organizations, contractors or investors participating in oil and gas contracts, foreign contractors, and business households, groups of individuals or individuals:

A taxpayer shall send a dossier of request for invalidation of tax identification number within 10 (ten) working days from the date of issuance of a document on operation termination (for economic organizations, other organizations, and business households, groups of individuals or individuals, except for business households, groups of individuals or individuals possessing no business household registration certificates) or from the date of contract completion or the date of operation termination, to the managing tax office for carrying out procedures for invalidation of tax identification numbers.”

+ In Article 17 providing for dossiers of request for invalidation of tax identification numbers

“1. For economic organizations and other organizations

a/ For managing units, a dossier must comprise:

- A written request for invalidation of tax identification number, made according to Form No. 24/DK-TCT issued together with this Circular;

- The tax registration certificate or tax identification number notice (original); or a written explanation about the loss of such certificate or notice on tax identification number;

- A copy (not required to be certified) of the dissolution decision, decision on opening of bankruptcy procedures, decision on division, contract on consolidation, contract on merger, decision on revocation of the operation registration certificate of the competent agency, or notice of operation termination;

- The General Department of Taxation’s written certification of the tax liability fulfillment for import and export activities, if the managing unit is engaged in import and export activities.

In case a managing unit has attached units possessing 13-numeral tax identification numbers, it shall send a written notice of termination of its operation to these attached units, requesting the latter to carry out procedures for invalidation of their tax identification numbers with their managing tax offices before the invalidation of the managing unit’s tax identification number.”

+ In Article 22 providing for tax registration in case of reorganization of economic organizations:

“3. Merger of economic organizations

The merging economic organization shall still maintain its tax identification number. The merged economic organizations shall have their tax identification number invalidated.

a) For merged economic organizations:

When a merger contract or equivalent document is signed, the merged economic organizations shall carry out procedures for invalidation of their tax identification numbers at the tax office under Articles 16 and 17 of this Circular.

Based on a dossier of request for invalidation of the tax identification number of the merged economic organization, the tax office shall carry out procedures for invalidation of such organization’s tax identification number under Article 18 of this Circular.”

- Pursuant to the Ministry of Finance’s Decree No. 105/2020/TT-BTC dated December 03, 2020, providing guidance on tax registration, effective from January 17, 2021.

+ In Article 23 providing for effect of implementation:

“1. This Circular takes effect on January 17, 2021.

2. This Circular replaces the Ministry of Finance’s Circular No. 95/2016/TT-BTC dated June 28, 2016, providing guidance on tax registration; Article 9 of the Ministry of Finance’s Circular No. 156/2013/TT-BTC dated November 6, 2013, guiding on the implementation of a number of articles of the Law on Tax Administration; the Law Amending and Supplementing a Number of Articles of the Law on Tax Administration and the Decree No. 83/2013/ND-CP dated July 22, 2013 of the Government.”

+ In Article 24 providing for transitional provisions:

“1. The taxpayers that have been granted tax identification numbers before the effective date of this Circular may continue using their granted tax identification numbers.

2. With regard to dossiers for tax registration, change of tax registration information, invalidation of tax identification numbers, and restoration of tax identification numbers that have been submitted to the tax offices before the effective date of this Circular, the tax offices shall continue handling such dossiers in accordance with the law on tax administration at the time of submission of dossiers.”

Pursuant to the above regulations, in the case that Northern Intermediate School of Transport is merged into Road Transport College under Decision No. 1376/QD-LDTBXH dated November 12, 2020, of the Ministry of Labor, Invalids and Social Affairs, the unit shall be responsible for carrying out the tax-related procedures as follows:

- To complete tax liabilities (tax finalization up to the time of termination of operation within 45 days from the date such event occurs) and complete invoice obligations before the invalidation of the tax identification number in accordance with Clause 3 Article 16 of Circular No. 95/2016/TT-BTC (from January 17, 2021, to comply with Article 15 of Circular No. 105/2020/TT-BTC).

- To carry out procedures for the invalidation of the tax identification number with the managing tax office within 10 (ten) within 10 working days after the date of issuance of operation termination in accordance with Clause 4, Clause 6 Article 39 of the Law on Tax Administration No. 38/2019/QH14; Article 16, Article 17 of Circular No. 95/2016/TT-BTC (from January 17, 2021, procedures for the invalidation of the tax identification number shall comply with Article 14 of Circular No. 105/2020/TT-BTC).

Any arising tax policy issues can be referred to in the guiding documents of Hanoi Tax Department posted on the website http://hanoi.gdt.gov.vn or contact with the Division of Inspection and Examination No. 4 for support and settlement.

Hanoi Tax Department hereby informs Northern Intermediate School of Transport for implementation./.