Closing the Tax ID Number for Foreign Investors

The procedure for closing the tax ID number for foreign investors terminates a business’s tax obligations under Vietnamese law following capital withdrawal or dissolution. This process applies to two primary scenarios: the dissolution of an FDI enterprise and the withdrawal or transfer of capital by a foreign investor. This analysis by Long Phan Consulting details the technical procedures for both cases.

Case 1: FDI Enterprise Dissolution

When an FDI enterprise undergoes dissolution, the company is required to carry out closing the tax ID number for foreign investors. This process involves several critical steps, including tax finalization, notification to the managing tax authority, and compliance with relevant legal regulations before completing the dissolution procedure.

Complete Tax Obligations

As stipulated in Article 15 of Circular 86/2024/TT-BTC, dated December 23, 2024, the enterprise must fulfill these obligations before initiating the TIN closure process:

• Finalize all obligations related to invoices as prescribed by law.
• Complete the submission of tax declaration dossiers, tax payments, and the processing of any overpaid tax amounts or outstanding value-added tax (VAT) credits. This must comply with Articles 43, 44, 47, 60, 67, 68, 70, and 71 of the Law on Tax Administration 2019, including obligations under any tax-payment-on-behalf-of-others TINs.
• If the parent entity has dependent units, all such units must complete their TIN termination procedures before the parent entity can terminate its own TIN.

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Submit the TIN Termination Dossier

To execute the TIN closure, the enterprise must submit a complete dossier as required by Clause 4, Article 39 of the Law on Tax Administration 2019 and Clause 1, Article 14 of Circular 86/2024/TT-BTC. The dossier includes:

• A written request for TIN termination (using Form No. 24/ĐK-TCT issued with Circular 86/2024/TT-BTC).
• A copy of the dissolution decision/notification or the revocation of the business registration certificate by the competent authority.
• For a parent entity with dependent units that have 13-digit TINs, the parent must issue a written notification of operation termination to these units. This notification requires them to complete their TIN termination procedures with their respective managing tax authorities.
• If a dependent unit cannot fulfill its tax obligations, the parent entity must submit a written commitment to its managing tax authority. This commitment affirms that the parent will assume all tax liabilities of the dependent unit.
• For a dependent unit, the dossier includes a copy of the decision or notification to terminate its operations, or the revocation of its registration certificate.

Deadline for Submission Before Dissolution Filing

According to Clause 5, Article 39 of the Law on Tax Administration 2019, an enterprise must complete tax finalization and notify the managing tax authority of the closing the tax ID number for foreign investors before filing for enterprise dissolution at the business registration office. This procedure is a mandatory step for foreign investors when withdrawing capital and dissolving a company. The deadline for submitting the tax finalization dossier is 45 days from the date of the dissolution decision, as stipulated in Clause 4, Article 44 of the Law on Tax Administration 2019.

Procedure for Closing the Tax ID Number for FDI Enterprise Dissolution

Based on Clauses 5 and 6, Article 39 of the Law on Tax Administration 2019 and Article 16 of Circular 86/2024/TT-BTC, the procedure is as follows:

• Step 1: Tax Finalization The enterprise must complete tax finalization with its direct managing tax authority. If the tax authority identifies outstanding tax liabilities, unsubmitted declarations, or financial statements, it will issue a notice for the enterprise to complete these requirements and pay any administrative penalties.
• Step 2: Submit TIN Termination Dossier After fulfilling all tax obligations, the enterprise submits the TIN termination dossier to the managing tax authority within 10 working days from the date of the operation termination document.
• Step 3: Tax Authority Processing
  • Within 02 working days of receiving a complete dossier, the tax authority issues a “Notice that the taxpayer has ceased operations and is undergoing TIN termination procedures” (Form No. 17/TB-ĐKT).
  • The authority coordinates with other tax agencies to finalize all the taxpayer’s obligations, including offsetting liabilities or processing refunds.
  • If a dependent unit’s liabilities are transferred to the parent entity, the tax authority issues a “Notice of transfer of tax obligations” (Form No. 39/TB-ĐKT).
  • Within 03 working days of the taxpayer completing all tax obligations, the authority issues a “Notice that the taxpayer’s TIN has been terminated” (Form No. 18/TB-ĐKT).

Note: For enterprises with import-export activities, the tax authority will require confirmation of tax obligation completion from the Customs authority. In the process of closing the tax ID number for foreign investors, the enterprise must also cease using e-invoices upon TIN termination, in accordance with Clause 12, Article 1 of Decree 70/2025/NĐ-CP dated March 20, 2025.

>> See more at: Business dissolution procedures: Detailed instructions

Case 2: Foreign Investor Capital Withdrawal/Transfer

When a foreign investor withdraws or transfers capital, the process for closing the tax ID number for foreign investors requires careful attention to tax liabilities and declaration procedures.

Taxes Arising from Capital Withdrawal/Transfer

The tax liability depends on whether the investor is a foreign organization or individual.

• Foreign Organization: Subject to a 20% Corporate Income Tax (CIT) on capital gains, as regulated in Decree 218/2013/NĐ-CP. The taxable income is calculated as: $20\%\times (\text{Transfer Price}-\text{Purchase Price}-\text{Related Transfer Expenses})$
• Foreign Individual:
  • Resident in Vietnam: Subject to a 20% Personal Income Tax (PIT) on capital gains, per the Law Amending and Supplementing a Number of Articles of the Laws on Taxes 2014. The formula is identical to that for organizations.
  • Non-resident in Vietnam: Subject to a 0.1% PIT on the total transfer price, as per Article 28 of the Law on Personal Income Tax 2007.

Procedure for Declaration and Submission

Tax Declaration Deadline: Tax on income from capital transfer is declared on a per-transaction basis. The declaration dossier must be submitted within 10 days from the date the tax liability arises, according to Decree 126/2020/NĐ-CP and the Law on Tax Administration 2019.

Place of Submission:

• CIT for foreign contractors: The dossier is submitted to the tax authority managing the enterprise where the capital is invested.
• PIT for individuals: The dossier is submitted to the tax authority managing the entity that issued the capital/securities.

Tax Declaration Dossier (Circular 80/2021/TT-BTC):

For Individuals:

• PIT declaration (Form No. 04/CNV-TNCN).
• Appendix listing individuals transferring capital (Form No. 04-1/CNV-TNCN), if applicable.
• Copies of the capital transfer agreement and supporting documents.

For Organizations:

• CIT declaration (Form No. 05/TNDN).
• Copies of the transfer agreement, capital contribution certificate, and expense receipts.

Procedure for closing the tax ID number for foreign investors After Capital Withdrawal

For investors who have registered a TIN in Vietnam for direct tax declaration, the closure procedure follows Article 14 and Article 16 of Circular 86/2024/TT-BTC:

• Step 1: Submit Dossier The investor submits a dossier to the tax authority, including a request for TIN termination (Form No. 24/ĐK-TCT) and a copy of the contract liquidation record.
• Step 2: Tax Authority Processing
  • Within 02 working days of receiving a complete dossier, the tax authority issues Form No. 17/TB-ĐKT.
  • Within 03 working days of the investor completing all tax obligations, the authority issues Form No. 18/TB-ĐKT to confirm the TIN is terminated.

Consulting Services at Long Phan Consulting

The procedure for closing the tax ID number for foreign investors is legally complex. Errors can lead to delays, penalties, and legal risks. Long Phan Consulting provides expert legal services to ensure an efficient and compliant process.

Comprehensive Advisory:

• Analyze the capital withdrawal or dissolution plan to define the optimal TIN closure roadmap.
• Review and reconcile all outstanding tax obligations against tax authority data.
• Identify potential risks related to tax finalization and invoice usage, proposing lawful solutions.

Dossier Preparation and Tax Finalization:

• Draft and prepare a complete dossier for TIN termination in accordance with legal standards.
• Assist in preparing financial statements at the time of dissolution and final invoice usage reports.
• Support the drafting of necessary explanatory documents for tax authorities.

Representation with State Authorities:

• Submit the TIN termination dossier on the client’s behalf to the competent authority.
• Proactively monitor the processing status and act as the representative for all communications with tax officials.
• Receive and deliver the final results to the client.

Frequently Asked Questions

What is the total real-time duration to complete the TIN closure process?

Although the tax authority’s processing time is short (2-3 working days per notice), the entire process can take several months to over a year. The preceding tax finalization stage, involving audits and reconciliation, is often time-consuming.

When should the enterprise close its bank account during dissolution?

The bank account should only be closed after all financial obligations are settled, including taxes and other debts, as per the payment priority in Article 208 of the Law on Enterprises 2020. Maintaining the account is necessary for final transactions.

Is closing the tax ID number required for a partial capital withdrawal/transfer?

No. TIN closure is only required in the specific cases outlined in Article 39 of the Law on Tax Administration 2019, such as complete dissolution or termination of a project. A partial transfer does not require this procedure.

Is a foreign investor liable for tax in Vietnam when transferring capital to another foreign investor?

Yes. Income from the transfer of capital in a Vietnamese entity is subject to tax in Vietnam under the Law on Personal Income Tax and the Law on Corporate Income Tax. The nationality of the transferee does not alter the transferor’s tax obligation.

Conclusion

Correctly following the procedure for closing the tax ID number for foreign investors upon capital withdrawal or dissolution is essential. It ensures full compliance with state obligations and protects the investor’s financial interests. For professional assistance and optimized solutions, please contact Long Phan Consulting at hotline 1900636389.