How much is the licensing fee for a company with charter capital of 11 billion VND? Where is the place to submit the license fee declaration in Vietnam?

Vietnam: How much is the licensing fee for a company with charter capital of 11 billion VND?

The licensing fee is essentially the license fee as currently stipulated by law.

According to Clause 4, Circular 302/2016/TT-BTC, the license fee rates are specified as follows:

License Fee Rates

1. The license fee rates for organizations engaged in the production and trading of goods and services are as follows:

a) Organizations with charter capital or investment capital over 10 billion VND: 3,000,000 (three million) VND/year;

b) Organizations with charter capital or investment capital of 10 billion VND or less: 2,000,000 (two million) VND/year;

c) Branches, representative offices, business locations, public service providers, and other economic organizations: 1,000,000 (one million) VND/year.

The license fee rate for organizations mentioned in this clause is based on the charter capital recorded in the business registration certificate, enterprise registration certificate, or cooperative charter. If there is no charter capital, the fee is based on the investment capital recorded in the investment registration certificate or investment decision document.

For organizations stated at points a and b of this clause that have a change in charter capital or investment capital, the basis for determining the license fee is the charter or investment capital of the year preceding the current fee calculation year.

If the charter capital or investment capital is recorded in the business registration certificate or investment registration certificate in foreign currency, it shall be converted into Vietnamese Dong based on the buying rate of the commercial bank or credit institution where the fee payer has their account at the time they pay the fee into the state budget.

...

The license fee rates for organizations engaged in production and trading of goods and services are as follows:

- Organizations with charter capital or investment capital over 10 billion VND: 3,000,000 (three million) VND/year;

- Organizations with charter capital or investment capital of 10 billion VND or less: 2,000,000 (two million) VND/year;

- Branches, representative offices, business locations, public service providers, and other economic organizations: 1,000,000 (one million) VND/year.

Accordingly, as per the regulations, a company with a charter capital of 11 billion VND will pay a licensing fee of 3,000,000 (three million) VND/year.

How much is the licensing fee for a company with charter capital of 11 billion VND? Where is the place to submit the license fee declaration in Vietnam? (Image from Internet)

Where does a company with charter capital of 11 billion VND submit the license fee declaration in Vietnam?

Based on Article 45 Tax Administration Law 2019 and Point k, Clause 1, Article 11 Decree 126/2020/ND-CP, the location for submitting the license fee declaration (licensing fee) is regulated as follows:

- Enterprises and business households submit the license fee declaration at the directly managing tax authority.

- In cases of submitting the license fee declaration under a one-stop-shop mechanism, the location follows the regulations of that mechanism.

- Specifically, for cases of submitting the license fee declaration for enterprises with multiple activities, operating in multiple provinces, it is the tax authority where the dependent units or business locations are situated.

Directly managing tax authority is explained in Clause 5, Article 3 of Circular 80/2021/TT-BTC as follows:

Glossary Explanation

Besides those terms already defined in the Tax Administration Law and Decree 126/2020/ND-CP, some terms in this Circular are defined as follows:

...

5. “Directly managing tax authority” includes:

a) Tax authority managing the locality where the taxpayer's head office is located, except as prescribed at point c of this clause;

b) Tax authority managing the locality where the taxpayer has other dependent units in a different province from where the taxpayer's head office is located, but the dependent unit directly declares tax with the locality’s tax authority;

c) Large Enterprise Tax Department under the General Department of Taxation established in accordance with Decision No. 15/2021/QD-TTg dated March 30, 2021, of the Prime Minister;

d) For individuals earning income from wages and salaries, the directly managing tax authority is the one issuing the tax code, which may change according to the tax authority conducting the tax finalization for the individual as prescribed;

đ) For individuals inheriting, receiving gifts in the form of securities or capital contributions in economic organizations or business establishments in Vietnam, subject to direct tax declaration with the tax authority, the directly managing tax authority is the one managing the issuing organization; if multiple tax authorities manage different issuing organizations, the directly managing tax authority is the one where the individual receiving the inheritance or gifts resides.

The directly managing tax authority may be mentioned in the Taxpayer Registration Certificate or Tax Code Notification or Notification of Managing Tax Authority or Notification of authorizeing managing tax authority when issuing enterprise code, cooperative code, tax code, or when registering for changes or when reauthorizeing managing tax authority in accordance with the law.

Accordingly, as per the aforementioned regulations, a company with charter capital of 11 billion VND will submit the license fee declaration at the directly managing tax authority. This means submitting the license fee declaration at the tax authority managing the locality of the taxpayer's head office.

Is it possible to authorize the collection of license fees in Vietnam?

According to Article 82 of Circular 80/2021/TT-BTC, it is specified as follows:

Funding for Authorized Collection

1. Contents of authorized collection

The Tax Authority authorizes organizations, individuals to collect certain taxes and other revenues under the scope of state budget management by the tax authority as follows:

a) Agricultural land use tax of households, individuals;

b) Non-agricultural land use tax of households, individuals;

c) Tax for business households, individual business taxes calculated by estimation method;

d) License fee, environmental protection fee for business households, individual businesses paying tax by estimation method;

e) Other types of taxes and other revenues under the state budget if approved by the Minister of Finance.

...

The Tax Authority authorizes organizations, individuals to collect certain taxes and other revenues under the scope of state budget management by the tax authority, including license fees.

Accordingly, as per the regulation, the license fee will be subject to authorized collection by the Tax Authority.