Vietnam businesses face high costs to dissolve inactive tax codes

Businesses in Vietnam, particularly in Ho Chi Minh City, are facing significant financial and administrative burdens when attempting to officially dissolve or close their tax codes after ceasing operations.

Reports indicate that companies that have been inactive for years often find themselves stuck in tax statuses such as 03 or 06. To complete the dissolution process, business owners are reportedly facing costs ranging from tens of millions to hundreds of millions of Vietnamese Dong. These expenses include unpaid licensing fees, late filing penalties, tax report violations, and the cost of hiring accounting services to reconstruct old financial records.

Dr. Pham Viet Thuan, Director of the Institute of Economics, Resources and Environment in Ho Chi Minh City, warned that these high costs and complex procedures could discourage entrepreneurship. He suggested that for businesses that have truly ceased operations, requiring continuous tax filings or licensing fees is unnecessary. He proposed a simplified process where businesses could simply confirm their period of activity and commit to no outstanding tax debts to resolve the matter quickly.