Complete Guide to Self-Reporting Business Closure via Hometax

When running a sole proprietorship, there are various reasons why you might consider closing down your business. However, many hesitate because they believe the closure process is complex and difficult. But don't worry! Using Hometax (homtax), you can complete your business closure registration with a few simple steps. This article will detail the process of closing down a sole proprietorship step-by-step and thoroughly explain the precautions you should take after closure.

Why is business closure registration necessary?

Failure to register your business closure can result in the following disadvantages.

• Tax Issues: If you do not register your business closure, you may be subject to a tax audit later and have to pay additional taxes.
• Legal Issues: Failure to deregister your business may cause difficulties in various administrative processes.
• Credit Problems: You may become a credit delinquent due to unpaid taxes.

Hometax Business Closure Registration: That's it!

🔗 Procedure for Closing a Sole Proprietorship and How to Close a Business Using Hometax

1. Access the National Tax Service Hometax website: Log in using your public certificate.
2. Select Suspension/Closure Registration: Select 'Suspension/Closure Registration' from the menu.
3. Enter Application Information: Enter the required information, such as the closure date and reason for closure.
4. Attach Documents: Attach any necessary documents.
5. Complete Application: Click the submit button to complete the application.

Things to Do After Business Closure Registration

• Value Added Tax Return: Must be filed by the 25th of the month following the month in which the closure date falls.
• Comprehensive Income Tax Return: Must be filed by May of the year following the year in which the closure date falls.
• Withholding Tax Return: Must be filed by the 10th of the month following the closure date.
• Four Major Insurances Settlement: If you have employees, you must cancel and settle their four major insurance coverage.

Precautions When Registering Business Closure

• Closure Date: The closure date must be carefully chosen. Since tax invoices cannot be issued after the closure date, it is best to finalize all transactions and then set the closure date.
• Tax Reporting: The obligation to file tax returns continues even after the closure. Failure to file within the stipulated period may result in surcharges.
• Cancellation of Licenses/Permits: Any licenses or permits related to the business must be cancelled.

Closing your business isn't difficult! Consider seeking professional assistance. If you find the closure process complicated, it's best to seek help from a tax accountant or auditor. With professional assistance, you can proceed with the closure process more accurately and safely.

Frequently Asked Questions (FAQ)

• Is business closure registration mandatory? Yes, business closure registration is mandatory. Failure to register can lead to various disadvantages, including tax and legal issues.
• How long does the business closure registration take? Generally, it takes about 20-30 minutes to process through Hometax.
• Do I still have to pay taxes after closing my business? Yes, you must pay taxes on income generated up to the closure date.
• Can I restart my business after closing it? Yes, you can. However, you will need to register your business again.