CONSEQUENCES WHEN A BUSINESS

IS NOT OPERATING OR ABLE TO KEEP CONTACT WITH LOCAL AUTHORISE

The business address is where an enterprise has the legal right to carry out license registration procedures and conduct production and business activities.

Enterprises are responsible for maintaining constant communication at their headquarters address and the place of business registration to fulfill their obligations and meet the regulatory requirements of state agencies. In the event that tax authorities and relevant agencies conduct inspections and verify that the enterprise is no longer conducting business at the registered address, the enterprise may have its validity terminated, tax code blocked, and face numerous serious consequences.

TERMINATION OF TAX CODE AND CONSEQUENCES:

1. Enterprises or taxpayers who register their taxes directly with the tax authorities may terminate the validity of their tax code when they receive a notification from the tax authorities indicating that they are not operating at the registered address.
2. Accordingly, when the tax authority verifies the operating status of the enterprise and determines that the enterprise is not operating at the registered address, after a certain period of time, the tax authority will close the corporate tax code.
3. Enterprises whose tax codes are closed are not allowed to issue invoices, invoices issued in this case have no use value. It is not allowed to buy invoices from tax authorities for enterprises subject to purchasing invoices.
4. If the enterprise does not have actual operations at the registered business location, it will not be approved to print invoices.
5. VAT is not deductible
6. Enterprise will not be entitled to tax deduction if the invoice does not record or does not correctly record one of the indicators such as the name, address, tax code of the seller, so the seller cannot be identified. Accordingly, for enterprises with If only the active headquarters that does not coincide with the registered headquarters address, invoices issued at the active headquarters address will not be eligible for Value Added Tax (VAT) deduction.
7. Do not account for deductible expenses when determining corporate income tax for expenses related to unregistered business locations because the expenses have sufficient legal invoices and documents according to the provisions of law.

THE TAX CODE RESTORATION PROCEDURE MUST BE CARRIED OUT

Enterprises must meet the following conditions to be eligible to restore their tax code:

1. The competent authority revokes the decision on revocation of business registration certificate or equivalent license;
2. When there is a need to continue business operations after a tax code termination application has been sent to the tax authority, but the tax authority has not yet issued a notice of tax code termination;
3. The tax authority has issued an announcement that the taxpayer does not have business operation at the registered address but has not revoked the licence or deactivated the Tax code.
4. Pay fines for administrative violations of enterprises that operate at locations different from those specified in their business licenses will be fined from 5,000,000 VND to 10,000,000 VND according to regulations. In addition, the enterprises may be subject to additional penalties if they commit repeat or multiple violations, specifically the suspension of their business license from 01 month to 03 months.

REGULATIONS ON LEGAL BUSINESS REGISTRATION ADDRESS 

Enterprises must register their headquarters address as the official contact place with state agencies. In case the enterprise has a business location other than the registered business headquarters and has registered business activities for that business location, companies can do actual business at that location without doing business at the head office, but they need to officially notify the state agency.

1. Depending on actual requirements, Enterprises have the right to choose a business location for headquarters, branches, representative offices, showroom – shops, factories, and warehouses.
2. There are some places where business registration will be restricted and should be avoided, such as non-commercial apartments, buildings or factories without completed land-related paperwork, places whose lessors are not licensed to do property business or locations where certain business lines are not permitted to be conducted.
3. Representative offices and foreign-invested companies must especially meet the conditions of security, fire prevention, and documents related to houses and land for rent.
4. Some locations may enjoy corporate income tax incentives such as four-year tax exemption and 9-to-15-year tax reduction.
5. There are options between a virtual office for lawful address and physical office for actual daily working places.
6. .The founder must properly review legal matters under consultation before signing a contract, making a deposit, or spending on office repairing costs… and then cannot register their business.
7. Regarding preparation and signing of the rental contracts, special attention should be paid to the terms of payment and deposit, rights and obligations of the parties – circumstances arising in order to prevent the risks from the lessors during the contract duration.
8. The founder of the enterprise may sign the rent contracts, serving the establishment and operation of the enterprise before and during the process of business registration. This contract will be inherited by the company immediately after being granted a business registration certificate.

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