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The Art of Tax Code Closure: Unraveling the Procedure to Nullify a Taxpayer’s Identification Number

Today, we delve into the intricacies of canceling your tax code and understanding the process of terminating your taxpayer identification number.

Administrator

11 August, 2024

Understanding personal tax codes and tax obligations is essential to fulfilling your rights and duties as a citizen. Today, we will provide you with important information regarding the procedures for registering and terminating your personal tax code.

1. What is Registering for a Personal Tax Code?

Registering for a personal tax code involves contributing a portion of your income to the state’s funds, which are used for infrastructure development, social welfare, and more. In other words, “registering for a personal tax code” is the same as “registering for personal income tax.”

In reality, personal income tax is built on the principle of fairness in tax contribution. Those with lower incomes may not have to pay taxes, while those with higher incomes pay more. Even individuals with the same income but different circumstances will have different tax obligations.

2. What is the Termination of a Taxpayer’s Tax Code and How is it Done?

According to Article 29 of the Consolidated Document 03/VBHN-VPQH of 2016, which consolidates the Law on Tax Administration issued by the National Assembly’s Office: The termination of a taxpayer’s tax code occurs in one of the following two cases:

An individual business owner ceases operations.
An individual dies, goes missing, or loses their civil act capacity as prescribed by law.

When such cases arise, the individual or their legal representative must notify the direct tax management agency to carry out the procedures for terminating the tax code and publicly announcing the termination.

The tax authority shall publicly announce the termination of the tax code. The tax code shall not be used in economic transactions from the date of the tax authority’s public announcement of the termination.

The dossier for terminating the taxpayer’s tax code must comply with the regulations stipulated in Article 27 of Circular No. 95/2016/TT-BTC guiding tax registration issued by the Minister of Finance.

3. When to Register for a Personal Tax Code

Individuals must register for a personal tax code when they are part of organizations such as:

Organizations and individuals doing business, including branches, dependent units, and directly affiliated units with separate accounting and legal entities.
Administrative agencies at all levels.
Non-business units.
Political, socio-political, and professional social organizations.
Project management boards and representative offices of foreign organizations.
International and foreign organizations.
Other organizations and individuals paying taxable income.

When individuals have taxable personal income, including:

Individuals with income from production and business activities, including independent practitioners and non-tax-exempt agricultural households. These individuals must register for personal income tax simultaneously with other types of taxes.
Individuals with income from salaries and wages, including foreign individuals working for foreign contractors and service providers in Vietnam.
Individuals transferring real estate.
Individuals with other taxable income (if required).

4. Benefits of Having a Personal Tax Code

For those who have registered for personal tax, the following benefits apply:

– Deductions for dependents: Specifically, if you have dependents, you can declare deductions for them along with your provisional personal income tax return (due by the 30th of the first month of the following quarter) or your personal income tax return for those paying taxes on a lump-sum basis (due by December 31st of the previous year).

– Tax reductions in cases of natural disasters, fires, accidents, or serious illnesses.

– Tax refunds for overpayment: In certain cases, if the monthly tax deductions are higher than the actual tax amount you owe, the law provides for a refund of the overpaid tax amount when you have a personal tax code.

– Faster tax services.

The above covers all the essential information regarding personal tax code registration and termination. We hope this knowledge will benefit you in the future. Best wishes.

Frequently asked questions

The procedure to nullify a taxpayer’s identification number varies depending on the jurisdiction, but typically involves submitting a request to the relevant tax authority. In some cases, a taxpayer may need to complete a form, provide proof of identity and residency, and demonstrate that they have met their tax obligations. It is important to note that the process can take several weeks or months to complete.

There are several reasons why an individual may need to nullify their taxpayer identification number. For example, if a person changes their name or citizenship status, they may need to update their information with the tax authorities. Additionally, if a business closes down or an individual is no longer self-employed, they may need to cancel their taxpayer identification number to avoid any future tax liabilities.

Failing to nullify a taxpayer identification number when it is no longer needed can result in a number of issues. For example, the individual may continue to receive tax bills and be held liable for taxes even if they are not obligated to pay them. Additionally, it can complicate the process of filing taxes in the future and may even result in penalties and interest charges from the tax authorities.

While the process of nullifying a taxpayer identification number is generally straightforward, there are some risks to be aware of. For example, if the process is not completed correctly, it could result in a delay in processing future tax returns or even result in penalties from the tax authorities. Additionally, if an individual cancels their taxpayer identification number and then later requires one, they may need to go through the entire registration process again, which can be time-consuming and cumbersome.

No, an individual can only nullify their taxpayer identification number themselves. This is to ensure that only the authorized person can make changes to their tax status and to prevent fraud or unauthorized access to sensitive information.