How long are new enterprises exempt from licensing fees in Vietnam?

How long are new enterprises exempt from licensing fees in Vietnam?

Based on Clause 8, Article 3 of Decree 139/2016/ND-CP, supplemented by Point c, Clause 1, Article 1 of Decree 22/2020/ND-CP, the exemptions from licensing fees are stipulated as follows:

Exemption from licensing fees

The following cases are exempt from licensing fees:

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

a) Newly established organizations (granted new tax codes, new enterprise codes).

b) Households, individuals, or groups of individuals initiating production and business activities for the first time.

c) During the exemption period, if the organization, household, individual, or group of individuals establishes branches, representative offices, or business locations, these entities are also exempt from licensing fees for the same period as the primary organization, household, individual, or group of individuals.

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From the above regulation, it can be seen that new enterprises are exempt from licensing fees in the first year of establishment or operation of production and business activities (from January 1 to December 31).

How long are new enterprises exempt from licensing fees in Vietnam? (Image from the Internet)

Are new enterprises required to submit a licensing fee declaration in Vietnam?

According to Point a, Clause 1, Article 10 of Decree 126/2020/ND-CP, the deadline for submitting licensing fee declarations for new enterprises is stipulated as follows:

Deadline for submission of tax declaration documentation for land-related revenues, licensing fees, registration fees, right grant fees, and other revenues according to the law on management and usage of public assets

Taxpayers comply with the deadlines for submitting tax declaration documentation as stipulated in Article 44 of the Law on Tax Administration. For deadlines related to land revenues, licensing fees, registration fees, right grant fees, and other revenues, according to the management and usage of public assets law, as stipulated in Clause 5, Article 44 of the Law on Tax Administration, the implementation is as follows:

1. licensing fee

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

If there is a capital change during the year, the licensing fee declaration must be submitted no later than January 30 of the following year after the year the change occurs.

b) Household businesses and individual businesses are not required to submit a licensing fee declaration. The tax authority will base calculations on the tax declaration, tax management database to determine revenue and calculate the payable licensing fee, then notify the licensing fee payer accordingly.

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Thus, new enterprises (including small and medium-sized enterprises converting from household businesses) must still submit a licensing fee declaration, with a deadline no later than January 30 of the year following the year of establishment or start of business activities.

Moreover, if there is a change in capital during the year, the enterprise must submit a licensing fee declaration no later than January 30 of the following year after the year the change occurs.

Where do new enterprises submit their licensing fee declarations in Vietnam?

According to Clause 1, Article 45 of Law on Tax Administration 2019, the location for submitting tax declaration documentation is as follows:

Location for submitting tax declaration documentation

1. Taxpayers submit their tax declaration documentation at the directly managing tax authority.

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Additionally, Point k, Clause 1, Article 11 of Decree 126/2020/ND-CP stipulates the location for submitting licensing fees for taxpayers with multiple activities across different territories as follows:

Location for submitting tax declaration documentation

Taxpayers submit tax declaration documentation according to the provisions of Clauses 1, 2, and 3, Article 45 of the Law on Tax Administration and the following provisions:

1. The location for submitting tax declaration documentation for taxpayers with multiple activities across different provincial territories, as specified in Points a and b, Clause 4, Article 45 of the Law on Tax Administration, is the tax authority in the location with business activities different from the main headquarters province/city for the following cases:

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i) Declaration of environmental protection fee at the place of mineral extraction (excluding crude oil, natural gas, and coal gas; organizations collecting minerals from small-scale miners).

k) Declaration of licensing fees at the location with dependent units or business locations.

From these regulations, it can be concluded that the location for submitting licensing fee declarations is at the directly managing tax authority. In the case of new enterprises with multiple activities across various locations, the declaration must be submitted at the place where dependent units or business locations are present.