Legal regulations on notification of cessation of operations to the tax authority

During the course of operation, enterprises may be required to cease business operations for various reasons such as dissolution, bankruptcy, or restructuring. In such cases, notification of cessation of operations to the tax authority constitutes a mandatory legal obligation to ensure transparency in tax administration and to avoid the incurrence of unnecessary financial liabilities.

I. Current situation regarding notification of cessation of operations to the tax authority

In recent years, the number of enterprises in Vietnam notifying cessation of operations has increased significantly, particularly during the period from 2020 to 2023. Tens of thousands of enterprises, primarily small- and medium-sized enterprises, have exited the market due to the impacts of the pandemic, rising operational costs, intense competitive pressure, and limited access to capital.

Sectors such as trade, services, construction, and manufacturing have all recorded high rates of business suspension or termination. When an enterprise decides to cease operations, one of the mandatory steps in the legal process is to notify the tax authority. It is a critical procedure to formally confirm the cessation of business activities and to ensure that the enterprise fulfills all outstanding financial obligations before officially withdrawing from the market.

II. Legal provisions on notification of cessation of operations to the tax authority

1. What is notification of cessation of operations to the tax authority?

Notification of cessation of operations to the tax authority is an administrative procedure that must be conducted by individuals, household businesses, or organizations upon terminating business operations, for the purpose of informing the tax authority to terminate the tax identification number's validity.

2. When is an enterprise required to notify the tax authority of cessation of operations?

Pursuant to Article 64 of Decree No. 168/2025/NĐ-CP on procedures for enterprise dissolution, an enterprise is required to notify the tax authority of its cessation of operations prior to submitting the dissolution dossier to the provincial-level Business Registration Authority where its headquarter is located.

3. What contents must be included in the notification?

In accordance with Clause 3, Article 208 of the Law on Enterprise 2020, the notification dossier must include:

• The resolution or decision on enterprise dissolution that has been duly adopted;
• The minutes of the meeting approving such resolution or decision.

4. Procedures for notification of cessation of operations to the tax authority

Pursuant to Clauses 1, 2, and 3 of Article 208 of the Law on Enterprise 2020, the procedure is as follows:

First, the enterprise must adopt a resolution or decision on dissolution. Such resolution or decision must include the following principal contents:

• Name and address of the enterprise’s headquarter;
• Reasons for dissolution;
• Timeline and procedures for liquidation of contracts and settlement of the enterprise’s debts;
• Plan for handling obligations arising from employment contracts;
• Full name and signature of the private enterprise owner, company owner, Chairman of the Members’ Council, or Chairman of the Board of Directors.

The private enterprise owner, Members’ Council, company owner, or Board of Directors shall directly organize the liquidation of the enterprise’s assets, unless the company charter provides for the establishment of a separate liquidation body.

Within seven (07) working days from the date of adoption, the resolution or decision on dissolution and the meeting minutes must be sent to the Business Registration Authority, the tax authority, and the employees of the enterprise. The resolution or decision must also be published on the National Business Registration Portal and publicly posted at the enterprise’s headquarter, branches, and representative offices.

III. Questions regarding notification of cessation of operations to the tax authority

1. Is it permissible to authorize a third party to conduct the notification?

Pursuant to Article 208 of the Law on Enterprise 2020 (as guided by Article 64 of Decree No. 168/2025/NĐ-CP), an enterprise may authorize a third party to conduct the notification procedure, provided that such authorization complies with applicable legal requirements.

2. Can the notification dossier be submitted online?

The notification dossier may be submitted electronically via online portals provided by the General Department of Taxation (eTax system) and the Government (National Public Service Portal).

3. What is the time limit for notifying the tax authority from the date of cessation?

Pursuant to Clause 3, Article 208 of the Law on Enterprise 2020, within seven (07) working days from the date of adoption, the dissolution resolution or decision and the relevant documents must be sent to the competent authorities and related parties.

Accordingly, the maximum time for notifying the tax authority is seven (07) working days from the date of cessation of operations.

4. Is tax finalization required prior to submitting the notification?

Pursuant to Clause 3, Article 208 of the Law on Enterprise 2020, within seven (07) working days from the date of adoption, the resolution or decision on dissolution and the minutes of the meeting must be sent to the Business Registration Authority, the tax authority, and the employees of the enterprise. The resolution or decision on dissolution must also be published on the National Business Registration Portal and publicly posted at the enterprise’s headquarter, branches, and representative offices.

Additionally, Clause 8 of this Article provides that after a period of 180 days from the date of receipt of the resolution or decision on dissolution as prescribed in Clause 3, if no opinion regarding the dissolution is received from the enterprise or no written objection is submitted by any relevant party, or within five (05) working days from the date of receipt of the dissolution dossier, the Business Registration Authority shall update the legal status of the enterprise in the National Business Registration Database.

Accordingly, the law does not require enterprises to complete tax finalization prior to notifying the tax authority of the cessation of operations; such finalization may be completed after the submission of the notification or the dissolution dossier.

5. What are the sanctions for late notification?

Currently, there are no specific sanctions prescribed for late notification of cessation of operations to the tax authority. However, reference may be made to administrative sanctions for late notification of business suspension under Point b, Clause 2, Article 10 of Decree No. 125/2020/NĐ-CP, which provides for a fine ranging from 1,000,000 VND to 2,000,000 VND for late notification of business suspension, except for cases specified in Clause 1 of the same Article.

IV. Legal consulting services related to notification of cessation of operations to the tax authority

The above constitutes NPLaw’s guidance on issues related to notification of cessation of operations to the tax authority. Should you require further clarification or assistance, please do not hesitate to contact NPLaw for comprehensive support.