DO INACTIVE FIES HAVE TO FILE TAX RETURNS?

The fact that a foreign-invested enterprise has not officially commenced its business operations does not necessarily mean that it is exempt from tax obligations. In practice, many newly established FDI companies that have not yet generated revenue or commenced business activities are uncertain about their tax filing obligations. So, is an FDI company that has not yet commenced operations required to file tax returns? What tax filing obligations must it fulfil, and are there any circumstances in which it may be exempt from filing? This article examines the current legal regulations to clarify these issues.

Is a Foreign-Invested Enterprise Required to File Tax Returns Before Commencing Operations?

A foreign-invested enterprise (FIE) that has not yet commenced operations is still required to fulfil its tax filing obligations in accordance with the law. The obligation to submit tax returns does not arise when the enterprise begins operating or generates revenue; rather, it commences upon the issuance of its Enterprise Registration Certificate.

Specifically, Article 11 of Decree No. 252/2026/ND-CP sets out cases in which taxpayers are not required to submit tax returns. However, these exemptions do not include enterprises that have been established but have not yet commenced operations. Nevertheless, Clause 3 of this Article provides that export-processing enterprises, including FIEs exclusively engaged in export-processing activities, are not required to submit value-added tax (VAT) returns. In addition, where an organization or individual does not make any payments of salaries or wages, it is not required to submit a personal income tax (PIT) finalization return in respect of employment income (Clause 7 of this Article).

In summary, an FIE that has not commenced operations is still subject to mandatory VAT and corporate income tax (CIT) filing obligations. It must also prepare annual financial statements and have them audited. Under Point b.1.2, Clause 1, Article 19 of Circular No. 89/2026/TT-BTC, “where a taxpayer has just commenced its business operations, it may choose to declare VAT on a quarterly basis.” Thereafter, the enterprise’s VAT filing frequency—monthly or quarterly—depends on its annual revenue.

With respect to CIT, an FIE is required to make provisional tax payments on a quarterly basis and complete its annual tax finalization, except in cases where tax returns must be filed for each occurrence, as prescribed in Point b, Clause 1, Article 21 of Circular No. 89/2026/TT-BTC.

Furthermore, an FIE must submit its financial statements to the competent state authorities within the statutory time limit. Under Point a, Clause 1, Article 37 of the Law on Independent Audit No. 67/2011/QH12, foreign-invested enterprises are subject to mandatory annual financial statement audits. Accordingly, the audit requirement is determined by the enterprise’s status as a foreign-invested enterprise, regardless of its size or whether it has generated revenue.

Tax Filing Deadlines for Foreign-Invested Enterprises

After identifying its tax filing obligations, an enterprise should pay attention to the deadlines for submitting returns for each type of tax. Under Article 10 of Decree No. 252/2026/ND-CP, tax return filing deadlines are determined based on the applicable tax period. Specifically:

First, regarding VAT: Where VAT is declared monthly, the tax return must be submitted no later than the 20th day of the month following the month in which the tax liability arises. Where VAT is declared quarterly, the deadline is the last day of the first month of the following quarter.

Second, regarding CIT: An enterprise must complete its annual CIT finalization. The deadline for submitting the annual CIT finalization return is the last day of the third month following the end of the tax year. For enterprises whose financial year coincides with the calendar year, the usual deadline is 31 March of the following year. Enterprises are not required to submit provisional CIT returns on a quarterly basis.

Third, regarding PIT: Where a PIT filing obligation arises, the enterprise must declare PIT monthly or quarterly, depending on the applicable conditions. An organization paying income must submit its annual PIT finalization return no later than the last day of the third month following the end of the calendar year.

In addition, annual financial statements must be submitted within 90 days from the end of the annual accounting period, pursuant to Clause 3, Article 29 of the Law on Accounting. FIEs subject to mandatory auditing must have their financial statements audited before submitting them to the competent state authorities.

Identifying and complying with the applicable deadlines is important because an enterprise may be subject to administrative penalties for late submission of tax returns, even where no tax is payable.

Tax Filing Documents Required for Foreign-Invested Enterprises

The documents required for tax filing vary depending on the type of tax and the applicable filing method. For enterprises that have not yet commenced business operations, the main filing documents to be considered include:

First, VAT return documents: Under Clause 5, Article 19 of Circular No. 89/2026/TT-BTC, VAT return documents must comply with Point 4 of Appendix I issued together with this Circular. For enterprises applying the tax credit method, the basic filing document is VAT Return Form No. 01/GTGT. Enterprises applying the direct method must use the corresponding return form applicable to their tax calculation method.

Second, CIT finalization documents: Under Clause 5, Article 21 of Circular No. 89/2026/TT-BTC, CIT finalization documents must comply with Point 6 of Appendix I issued together with this Circular.

For enterprises applying the method of calculating tax based on revenue and expenses, the basic filing documents include:

• Annual CIT finalization return, Form No. 03/TNDN;
• Annual financial statements;
• Audit report on the financial statements, for enterprises subject to mandatory auditing;
• Relevant appendices depending on the enterprise’s actual operations and tax obligations, such as the loss carry forward appendix or the related-party transaction appendix, where applicable.

Enterprises applying the method of calculating tax as a percentage of revenue must use Form No. 04/TNDN, together with the supporting documents required by law.

Third, PIT return documents: Where an enterprise incurs a PIT filing obligation in respect of salaries and wages, periodic tax returns must be submitted using Form No. 05/KK-TNCN. The annual PIT finalization return for income-paying organizations must be prepared using Form No. 05/QTT-TNCN, together with the relevant appendices.

However, if an enterprise does not make any payments of salaries or wages, it is not required to submit a PIT finalization return in respect of such employment income.

In conclusion, the preparation of tax filing documents must be based on the type of tax, the applicable tax calculation method, and the enterprise’s actual circumstances, rather than solely on whether the enterprise has generated revenue.

With a team of experienced lawyers and legal experts specializing in investment registration and M&A, corporate tax filing, and related legal matters, BKC LAW provides comprehensive solutions for foreign investors. For in-depth advice on the optimal investment structure for your project, please contact BKC LAW using the details below:

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