Tax Alert | February 2025 | Tax registration as per Circular 86

This Alert provides updates on the Investment Support Fund ("ISF"), the establishment, management and use of which are guided in details under the Decree No. 182/2024/NĐ-CP dated 31 December 2024 of the Government ("the Decree"). The Decree provides a legal framework for the Government’s investment support for enterprises operating in the high-tech sector and enterprises with investment projects in research and development center.

The Ministry of Finance has issued Circular No. 86/2024/TT-BTC dated 23 December 2024 (Circular 86/2024/TT-BTC), replacing Circular No. 105/2020/TT-BTC dated 3 December 2020 (Circular 105/2020/TT-BTC) on tax registration.

Circular 86/2024/TT-BTC is structured into four chapters, with a separate chapter dedicated to tax registration procedures applicable to business households, family households and individuals, as follows:

1. Chapter I includes general provisions on the scope and subjects of the application. 
2. Chapter II stipulates the procedures for tax registration for taxpayers that are organizations. 
3. Chapter III provides guidance on the tax registration procedures for taxpayers who are business households, family households, and individuals. 
4. Chapter IV includes provisions on the implementation of the regulations. 

The provisions of Circular 86/2024/TT-BTC take effect from 6 February 2025. However, the application of personal identification numbers (PIN) replacing the tax identification numbers (TIN) for individual taxpayers, dependents, household representatives, business household representatives, and business individuals will be effective from 1 July 2025. The TINs issued by the Tax Authority for these subjects will remain valid until 30 June 2025.

We summarize some of the new and notable regulations in Circular 86/2024/TT-BTC that may be of interest

Changes in tax registration regulations for taxpayers that are organizations 

• Circular 86/2024/TT-BTC requires an on-site verification of taxpayers’ operations at the registered address when: 
  • There is a change in tax registration information that results in a change of the directly managing tax authority. 
  • The taxpayer has not submitted a tax declaration dossier as requested by the Tax Authority after two notifications. 
  • The Tax Authority receives returned mail sent to the taxpayer that could not be delivered due to no recipient or a non-existent address. 
  • The Tax Authority receives information with evidence from organizations or individuals indicating that the taxpayers are not operating at the registered address. 
  • The Tax Authority receives a notification from a competent authority that the taxpayer is not operating at the registered address. 
  • The Tax Authority receives an invoice usage registration dossier or a dossier for changing invoice registration information, and the taxpayer is classified as high-risk, requiring verification of operations at the registered address. 
  • The Tax Authority receives a legal dossier for business registration, and the taxpayer is classified as high-risk, requiring verification of operations at the registered address. 
  • The Tax Authority issues a tax registration certificate or registration of changes in tax registration information, and the taxpayer is classified as high-risk, requiring verification of operations at the registered address. 

The taxpayer's TIN in this case will have the status 09 “Taxpayer awaiting verification of operations at the registered address”. Circular 86/2024/TT-BTC does not specify the validity of the TIN when in this status. This may mean that the Tax Authority will not accept the corporate income tax deductions of expenses supported by, and the value added tax credits related to, invoices issued by the taxpayer during the period their TIN is recorded as in status 09.

• Taxpayers who have been notified by the Tax Authority stating that they are not operating at the registered address must complete the procedure to reactivate their TINs before registering to temporarily suspend business operation, or must fulfill their tax obligations with the Tax Authority before submitting a dissolution or operation termination dossier to the business registration office. This measure is intended to monitor and prevent cases where taxpayers attempt to suspend operations or complete deregistration with the licensing authorities without completing their tax obligations.  
• Taxpayers, after restoring their legal status with the business registration office, must submit a dossier to restore their TIN with the Tax Authority. 
• The remaining tax obligations of an entity that is demerged, merged, or consolidated and whose TIN is terminated, will be inherited by the newly established entity from the demerged, merged, or consolidated entity, provided there is an agreement on this inheritance. 

Tax registration for individuals or dependents through income-paying entities

• With significant changes such as the use of PIN replacing TIN for individual taxpayers and dependents from 1 July 2025, as well as the Tax Authority’s utilization of the national database on population, identification, and electronic authentication in tax registration procedures, Circular 86/2024/TT-BTC has dedicated a separate chapter for tax registration for these obbjects.  
• Circular 86/2024/TT-BTC also expands the definition of income-paying entities from “organizations and individuals paying income from salaries and wages to employees” to “organizations and individuals paying income from salaries, wages, and other taxable income to individual taxpayers”. 

• The responsibilities of the income-paying entities include: 
  • Conducting tax registration or updating tax registration information for individuals and dependents upon receiving written authorization from the individual (using the standard form issued with the Circular). 
  • Informing each individual of the tax registration results received from the Tax Authority, enabling them to use the information for tax withholding, declaration, and payment as required by law. In cases of unsuccessful registration, the income-paying entity must notify each individual of the reasons, allowing them to adjust, supplement the information, and resubmit the tax registration dossier to the Tax Authority after updating their information. 
  • Using the PIN or TIN issued by the Tax Authority, as applicable, for individuals and dependents for tax withholding, declaration, and payment. 
• Notable points for individual taxpayers include: 
  • Vietnamese citizens who have not been issued a PIN must complete the update of their information in the National Population Database and obtain a PIN before proceeding with the tax registration procedures as stipulated in this Circular. 
  • Where an individual has been issued more than one TIN, the taxpayer must update the PIN information for the issued TINs so that the Tax Authority can integrate the TINs into the PIN, consolidate the taxpayer's tax data under the PIN, avoid the need to cancel/merge TINs or adjust TIN on invoices, documents, and tax dossiers after the TINs have been integrated into the PIN. 
  • Individuals issued a TIN before 1 July 2025, are advised to check the status of their TIN at http://www.gdt.gov.vn, or through their electronic tax transaction account via the icanhan or eTaxMobile applications (if they have been issued an account for electronic tax transactions with the Tax Authority). They should register to update their tax registration information if their TIN is in status 10 “TIN awaiting PIN information update”. Status 10 indicates that the tax registration information does not correctly match the individual's information recorded in the National Population Database or is insufficient. Registration information updates can be performed through the income-paying entity. 

In addition to the above regulations, Circular 86/2024/TT-BTC also provides detailed guidelines on tax registration, updating tax registration information, termination of validity, and reactivation of TINs for business households, family households, and business individuals. Readers are encouraged to refer to this Circular for further details on other areas of interest.