Businesses that have been ‘dead’ for years must come back to life before closing their tax codes

A company that stopped operating nearly a decade ago has been told it must effectively come back to life before it can close its tax code. The Hanoi director, identified as T.H.H., said she went to Tax Department Office 5 in Hanoi on Sept. 4 to handle the tax code of a company she had led since its establishment in 2007.

The business temporarily suspended operations in 2017 because of financial difficulties. It registered a second suspension in 2018 and has not resumed activity since. The director said the company had no business activity, revenue or tax debt. Tax authorities nevertheless classified it as inactive at its registered address from 2021 onward.

She believes the problem may have arisen because the company had registered the family’s apartment as its business address. Regulations later barred apartments from being used as business addresses, and inspectors may have found no company sign there.

After the meeting, officials told her the company owed about 60 million dong, although the figure remains provisional. The amount included about 10 million dong in business-license fees, 11.5 million dong in penalties related to business-license declarations, 11.5 million dong for failing to file value-added tax declarations, and 11.5 million dong connected to financial statements and corporate income tax finalization. It also included about 20 million dong for failing to report invoice use and roughly 4 million dong in late-payment charges.

The director said she was willing to pay, but still could not immediately close the tax code. She was instructed to complete invoice-use reports and tax finalization documents from the company’s establishment in 2007 until its suspension in 2018. She said the company had filed tax finalization documents while operating and still kept its records, books and invoices. "The company has been out of breath for years, and now it is being forced to come back to life so it can be allowed to die again," she said, questioning why establishing a business is easier than closing one. She acknowledged that she had failed to complete the closure procedure because she believed an inactive company with no revenue or invoices would eventually disappear from the system.

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The company has been out of breath for years, and now it is being forced to come back to life so it can be allowed to die again.