Are new enterprises exempt from licensing fees in Vietnam?

Are new enterprises exempt from licensing fees in Vietnam?

Based on Article 3 of Decree 139/2016/ND-CP, supplemented by point c, clause 1, Article 1 of Decree 22/2020/ND-CP, the regulation on licensing fee exemption is as follows:

Exemption from licensing fee

Cases exempt from licensing fee include:

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8. Exemption from licensing fee in the first year of establishment or production and business operation (from January 1 to December 31) for:

a) New organizations (granted a new tax code, new enterprise code).

b) Households, individuals, group of individuals first engaging in production, business operations.

c) During the licensing fee exemption period, if organizations, households, individuals, groups of individuals establish branches, representative offices, business locations, these will be exempt from licensing fee for the same period as the organizations, households, individuals, groups of individuals.

9. Small and medium enterprises converting from household businesses (in accordance with Article 16 of the Law on Supporting Small and Medium Enterprises) are exempt from licensing fee for 3 years from the date of the first enterprise registration certificate issuance.

a) During the licensing fee exemption period, if small and medium enterprises establish branches, representative offices, business locations, these will be exempt from licensing fee for the same period as the small and medium enterprises.

Simultaneously, clause 9, Article 18 of Decree 126/2020/ND-CP stipulates the deadline for submitting the licensing fee return as follows:

Tax Submission Deadline for State Budget Revenues from Land, Water Resource Exploitation Fees, Mineral Resource Fees, Sea Usage Fees, Registration Fees, licensing fee

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9. licensing fee:

a) The deadline to submit the licensing fee is no later than January 30 annually.

b) For small and medium enterprises converted from household businesses (including dependent units, business locations of the enterprise), upon the expiration of the licensing fee exemption period (fourth year from the establishment year), the deadline to submit the licensing fee is as follows:

b.1) If the exemption period ends in the first 6 months of the year, the deadline is no later than July 30 of the year the exemption period ends.

b.2) If the exemption period ends in the last 6 months of the year, the deadline is no later than January 30 of the year following the exemption period.

c) For household businesses and individual businesses that ceased operations but later resumed, the deadline to submit the licensing fee is as follows:

c.1) If operations resumed in the first 6 months of the year: No later than July 30 of the resumption year.

c.2) If operations resumed in the last 6 months of the year: No later than January 30 of the year following the resumption year.

Thus, new enterprises will be exempt from paying licensing fee in the first year from the commencement of production, business operations (from January 1 to December 31).

Once the licensing fee exemption period ends, the licensing fee must be submitted no later than January 30 each year.

Are new enterprises exempt from licensing fees in Vietnam? (Image from the Internet)

Which entities are subject to licensing fees in Vietnam?

According to Article 2 of Decree 139/2016/ND-CP, licensing fee payers are organizations and individuals engaged in the production, business of goods, services (except for cases exempted from licensing fee), including:

- Enterprises established under the law.

- Organizations established under the Cooperative Law.

- Public non-business units established under the law.

- Economic organizations of political organizations, socio-political organizations, social organizations, socio-professional organizations, people’s armed units.

- Other organizations engaged in production and business.

- Branches, representative offices, and business locations of the organizations as stipulated in clauses 1, 2, 3, 4 and 5, Article 2 of Decree 139/2016/ND-CP (if any).

- Individuals, group of individuals, households engaging in production and business.

When to submit a licensing fee declaration in Vietnam?

Based on clause 1, Article 10 of Decree 126/2020/ND-CP, the deadline for submitting licensing fee declarations is as follows:

- new licensing fee payers (excluding household businesses, individual businesses), including small and medium enterprises converted from household businesses, or establishing additional dependent units, business locations, or starting production, business activities must submit the licensing fee declaration no later than January 30 of the year following the year of establishment or commencement of production, business activities.

In the case of a capital change during the year, the licensing fee declaration must be submitted no later than January 30 of the year following the change.

- Household businesses, individual businesses are not required to submit a licensing fee declaration. The tax authority relies on the tax declaration, tax management database to determine the revenue for calculating the licensing fee payable and informs the licensing fee payer to comply according to the regulations in Article 13 of Decree 126/2020/ND-CP.