Cases of locked tax codes and prevention of locked tax codes

| Updated: 01/08/2024
Businesses can get into trouble if their tax code is locked, which can negatively affect the operations of your business. In this article, we will learn about cases of tax code blocking and How to prevent tax code blocking.
Lock tax code
Problem

Cases where businesses may have their tax codes locked

What is tax code lock?

Locking a tax code is when the tax authority temporarily stops a company from using their tax code. This often happens when a business violates tax regulations or business laws.

In what cases can a business have its tax code locked?

When an enterprise commits violations in the following cases, the enterprise is likely to have its tax code locked, which are:

  1. Not operating at the registered business office: when the inspection agency comes to the company's headquarters but sees no signboard or no business activities at the registered address.
  2. Failure to file tax returns for one or more consecutive periods.
  3. Failure to pay tax when it is overdue and subject to enforcement.
  4. There are acts that are classified as businesses with high tax risks.
  5. Do not respond to the tax authority's notice on the above issues after receiving the notice from the tax authority multiple times.
  6. Other acts that violate tax laws.
Affect

Consequences when businesses have their tax codes locked

Once the tax code has been locked, businesses cannot perform the following tasks:

  1. Unable to issue invoices;
  2. Unable to submit declarations on the electronic tax page such as: tax reports, financial reports, invoice usage reports, etc.
  3. Unable to change business registration content: change charter capital, change head office address, change legal representative...

On the other hand, your partners will not do economic transactions with businesses that have had their tax codes locked. Therefore, businesses whose tax codes are locked will almost not be able to continue doing business.

Businesses also cannot complete business dissolution procedures while their tax code is locked.

Solution

Things to keep in mind to avoid having your tax code locked

To avoid having your tax code locked, you need to:

  1. Comply with all laws related to your business.
  2. Place company signs where you do business.
  3. Operating at the place of business registration.
  4. Declare taxes on time and fully. When delays arise, you must overcome them by promptly making additional payments, avoiding being more than 30 days late from the tax declaration due date.
  5. Pay taxes on time and in full.
  6. Correctly update company information such as updated address, phone number, and email so tax authorities can contact you quickly.
  7. Review your business's compliance status to avoid being classified as a high-risk business.
  8. Avoid violating any tax and accounting regulations, ensuring all transactions and company finances are clear and transparent.

Instructions for handling your tax code when your tax code is locked

When your tax code is locked, depending on the specific violation, there are different ways to handle it. The following is a general guide to handling the tax code when your tax code is locked:

Step 1: Contact the tax authority to accurately determine the following information:

  • Determine when the tax code is locked
  • Determine the reason for locking the tax code. If it is locked due to not submitting tax returns, accurately determine late tax declarations; if it is locked due to not paying taxes on time, determine the exact tax amount. need to submit.
  • Find out if having your tax code locked leads to any other consequences that need to be addressed.

Step 2: Fix violations. Depending on the type of violation, appropriate corrective action will be taken. The general fix is ​​as follows:

  • Termination of violations.
  • Solve the problem.
  • Pay fines for administrative violations.
  • Add records for the operation process. continue after the tax code is opened.

Step 3:  After completing step 2 and being accepted by the tax authority, the business sends an official letter requesting to restore the tax code.

SUPPORT FROM EXPERTS

If your business encounters the problems mentioned above, contact us today for advice and effective solutions!

Reading time: 3 min

Category

Meet an expert now

Helps you understand the problem properly before deciding on a solution.

You need a Solution

We are ready to accompany you to understand correctly and do correctly.

Freedom to explore

Experience it your way! Access the knowledge base.
Sign up
CONSULTATION NOW

We will help you understand correctly and propose a detailed solution that best suits your needs and goals.