Temporarily closed
As per the Company Act, companies registered in Vietnam must file their Annual Returns to Tax authority dep't. They have to do so within one month of their AGMs It is their due date for filing of annual return. Even dormant companies that ceased trading have to do so as they are considered to be ‘live’.
A new Vietnam company has 18 months from the date of its incorporation to hold its first AGM. Afterward, it must covey an AGM (Annual General Meeting) every calendar year and any two of them must not be spaced by more than 15 months.
During the AGM, the companies have to table their accounts for the approval of shareholders. The company directors are responsible for the up-to-dateness of the accounts. As per the law, these accounts should not be more than 6 months old. The latest accounts are useful to the stakeholders in making informed decisions.
What is a Dormant Company is Vietnam?
The meaning of the term ‘Dormant Company’ is not the same for Department of Planning and Investment and tax authority. A company that is dormant in the eyes of Department of Planning and Investment may be ‘Active’ for tax authority. You have to consider it carefully so as to be able to avoid the pitfall.
Dormant Company tax authority
A company having no revenue or income during the financial period under consideration is taken to be ‘Dormant’ by tax authority even though it may have booked expenses.
Dormant Company Department of Planning and Investment
A company having no accounting transaction during the financial period under consideration is taken to be ‘Dormant’ by Department of Planning and Investment.
The transactions/ expenses listed below does not affect the dormancy of the company:
- Appointment of a company secretary and an auditor
- Maintenance of a registered office, registers, and books
- Fine, penalty, or fees to the Company Registrar (Department of Planning and Investment)
- The taking of company’s shares by the subscribers to the memorandum to fulfill their undertaking
Filing Requirement Dormant Company
Income Tax Return Filling
A dormant company Vietnam has to follow filing requirements even when it has no business or income for the basis period under consideration. Such a company must file its Income Tax Return unless it has been granted a waiver for the submission.
Waiver to Submit Income Tax Return
The qualifying conditions are as follows:
- A dormant company, up-to-date with the Form..., accounts, & tax submissions till its cessation
- Owns no investments
- Already de-registered for VAT (GST)
- Has no intention of restarting business within next 2 years
Tax authority dep't Annual Return Filing requirement
A dormant company (non-listed) is exempted from the preparation of financial statements, if:
- It complies with substantial assets test; and
- It is dormant since formation or the end of its previous financial year.
The dormant listed companies must prepare their financial statements if they do not fulfill the substantial asset test. However, they are exempted from the audit.
Department of Planning and Investment and Tax authority dep't Filing Requirements by Dormant Companies in Vietnam
|
Type of entities |
Definition Filing requirements |
Solvent |
Solvent |
|
Dormant EPC |
do not have any accounting transactions |
|
|
|
Private Company (non-EPC) |
limited by shares with at most 50 shareholders |
Dormant
|
Dormant
|
|
Public company |
|
Dormant
|
Dormant
|
All dormant companies in Vietnam must prepare their accounts as per VAS, hold AGMs physically or by passing the written resolution. They must also file their annual returns with Department of Planning and Investment within due dates.