Businesses Face Heavy Penalties When Closing Tax IDs, Leaving Some Ready to Give Up

Some businesses that have generated no revenue for years are discovering that closing their tax registrations can still leave them with bills worth tens of millions of dong. Owners say the penalties make them feel trapped by companies they abandoned long ago.

N.T.P., a Hanoi business director, said she was stunned when tax officials told her to pay about 40 million dong to close her company’s tax registration. The company was established at the end of 2020, operated for six months and then suspended activity when the COVID-19 pandemic struck. It never generated revenue, issued invoices or owed tax, she said.

The bill included an annual business license fee of 2 million dong and more than 10 million dong in late filing penalties. P. questioned why the fee still applied to a company that had effectively been inactive for years. She said she did not know where to find the money.

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The nature of the business license fee is that it applies to taxpayers who are actively doing business. A company that has not operated and has been dead for years is still charged the fee, which is very unreasonable.

Another Hanoi resident, T.H.H., said she was closing the tax registration for a rental household business even though she had sold the house nearly 10 years ago. Tax officials asked her to provide rental and sales contracts, then told her she still owed more than 10 million dong in business license fees, filing penalties and late-payment interest.

Nguyễn Thị Cúc, chairwoman of the Vietnam Tax Consultants Association, cited a case involving a company that stopped operating in 2013 but only began the formal process of ending its tax registration in August 2026. Its total bill reached 61 million dong, including late filing penalties for value-added tax and corporate income tax, business license fees from 2013 to 2025, and late-payment interest.

Cúc said authorities should distinguish between serious violations and businesses that simply stopped operating without completing the paperwork. Companies created to trade invoices, profit illegally or evade tax, as well as businesses established with fake information for criminal purposes, should face strict action. But where a company has no production, business activity, revenue, expenses or tax debt, she said authorities could consider waiving business license fees, late-payment interest and penalties for late tax filings during the inactive period.

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If it is established that the business no longer has production or business activities, generates no revenue or expenses, and has no tax debt, authorities could consider not collecting business license fees or late-payment interest and not penalizing late tax filings during the period when the business stopped operating.