During the dissolution of a company, one of the essential procedures to complete is tax finalization. NPLaw would like to provide an overview of current regulations on tax finalization procedures when dissolving a company through the following article.

I. Current situation regarding tax finalization procedures when dissolving a company

Currently, many enterprises undertaking dissolution are still unclear about the processes, required documents, and duration for completing tax finalization procedures.

It often results in tax authorities returning dossiers, requesting multiple amendments, and prolonging the dissolution process. Such delays not only affect the timeline of dissolution but may also create direct legal liabilities for the company’s legal representatives, including administrative sanctions and other legal consequences under the Law on Tax Administration. 

II. Understanding of tax finalization procedures when dissolving a company

1. Importance of tax finalization during company dissolution 

Completing tax finalization is critically important. Such procedures ensure the accurate determination of taxes that the company still owes or is eligible to recover, thereby guaranteeing that no financial obligations to the State remain outstanding. Full and lawful compliance enables the company to close operations transparently and legally while preventing post-dissolution disputes or sanctions.  

2. Main considerations for tax finalization during dissolution

Important aspects to note include:

  • Settling debts and asset obligations with creditors in accordance with Article 207 of the Law on Enterprise 2020, amended 2025.
  • Completing accounting books and documents as required by law.
  • Conducting tax finalization after receiving the dissolution decision and registering the dissolution with the business registration authority in accordance with Article 208 of the Law on Enterprise 2020, amended 2025.
  • Terminating the company’s tax code in accordance with Article 39 of the Law on Tax Administration 2019. 

Compliance with these requirements is a prerequisite for legally and transparently concluding the company’s operations.

III. Legal regulations on tax finalization procedures during company dissolution

1. Relevant legal provisions

Main regulations governing tax finalization during company dissolution are stated in multiple legal documents, including:

  • Law on Enterprise 2020, amended 2025: Cases and conditions for dissolution (Article 207); dissolution procedures (Article 208); required documents for dissolution (Article 210).
  • Decree 168/2025/ND-CP on company dissolution registration (Article 64).
  • Law on Tax Administration 2019: Termination of tax code upon dissolution (Article 39) and fulfillment of tax obligations in dissolution cases (Article 67).
  • Decree 126/2020/ND-CP providing guidance on certain provisions of the Law on Tax Administration.

Understanding these regulations is essential for ensuring that the tax finalization process during dissolution is conducted smoothly, legally, and without unnecessary risk.

2. Process and procedures for tax finalization during company dissolution

The process typically involves the following steps:

  • Step 1: Completing debt settlement, asset liquidation, financial obligations to creditors and employees, and close bank accounts.
  • Step 2: Cancelling any remaining or unreported invoices, finalizing accounting books, and submitting reports to the tax authority.
  • Step 3: Submitting the tax finalization dossier to the tax authority for review.
  • Step 4: Fulfilling tax obligations and terminating the tax code.

Completing these steps ensures lawful dissolution and minimizes risks or sanctions.

3. Main considerations to avoid violations related to tax finalization during company dissolution

To prevent violations when conducting tax finalization, enterprises must:

  • Declare all revenues, expenses, and assets fully and accurately.
  • Comply with duration for submission and notification.
  • Maintain accounting books, invoices, and supporting documents for the legally required period for potential inspections.
  • Pay all taxes and sanctions promptly upon notification by the tax authority.

Careful preparation and strict adherence to regulations ensure efficient and legally compliant tax finalization.

IV. Questions on tax finalization procedures during company dissolution

1. When should a company begin the tax finalization process to ensure legal compliance?

According to Clause 4, Article 44 of the Law on Tax Administration 2019: The duration for submitting tax declaration dossiers in cases of business cessation, contract termination, or company reorganization is no later than 45 days from the occurrence of the event.

Thus, once the dissolution decision is approved, the company must immediately review books, prepare documents, and commence tax finalization to meet duration and avoid sanctions for delays.

2. Must tax obligations be fully settled before initiating tax finalization?

The tax finalization dossier must be submitted no later than 45 days from the dissolution decision (Clause 4, Article 44, Law on Tax Administration 2019). The company submits the dossier to the tax authority for review. After verification and determination of outstanding taxes, the company pays any remaining taxes and sanctions.

Completing tax obligations is a prerequisite for dissolution (Clause 2, Article 207, Law on Enterprise 2020, amended 2025) and is part of the tax finalization process to ensure legal completion.

3. How is tax finalization handled if the company has outstanding taxes?

According to Clause 2, Article 207 of the Law on Enterprise 2020, amended 2025: An enterprise may only be dissolved after settling all debts and asset obligations, and not being involved in ongoing disputes before courts or arbitration.

If the company has unpaid taxes, tax finalization cannot be completed until all debts are resolved. Basic steps include:

  • Step 1: Tax authority determines the outstanding tax amount.
  • Step 2: Company pays tax debts in the priority order specified in Clause 2, Article 57 of the Law on Tax Administration 2019:
  • Tax debts, fines, and overdue interest subject to enforcement measures.
  • Tax debts, fines, and overdue interest not yet subject to enforcement.
  • Other taxes, fines, and overdue interest incurred.
  • Step 3: Tax authority confirms completion of tax obligations.
  • Step 4: Enforcement measures applied if necessary.

4. What sanctions may apply for failing to complete tax finalization on time?

Under Article 13, Decree 125/2020/ND-CP, sanctions for late submission of tax declarations include:

  • Warning.
  • Fine of 2,000,000 VND.
  • Fine from 5,000,000 VND to 8,000,000 VND.
  • Fine from 8,000,000 VND to 15,000,000 VND.
  • Fine from 15,000,000 VND to 25,000,000 VND.

Additionally, violators may be required to:

  • Pay overdue taxes to the State budget.
  • Submit missing tax declaration dossiers and annexes as prescribed.

5. When can a company request an extension for tax finalization?

According to Clause 1, Article 46 of the Law on Tax Administration 2019, an extension is permitted if: The taxpayer is unable to submit the tax declaration on time due to natural disasters, calamities, epidemics, fires, or unforeseen accidents, as approved by the head of the relevant tax authority.

Thus, companies may request an extension if the situation falls under the above circumstances.

V. Should companies consult a lawyer regarding tax finalization procedures during dissolution? 

Tax finalization during company dissolution is not only a mandatory legal procedure but also essential to safeguarding the lawful rights and interests of all stakeholders.

With a team of experienced lawyers and legal specialists, NPLaw provides professional and reliable legal services to protect clients’ rights effectively. For legal support, please contact NPLaw for consultation.