Shall public secondary schools pay licensing fee in Vietnam?

Shall public secondary schools pay licensing fee in Vietnam?

Pursuant to Clause 10, Article 3 of Decree 139/2016/ND-CP, as supplemented by Point c, Clause 1, Article 1 of Decree 22/2020/ND-CP regarding exemptions from licensing fees, is prescribed as follows:

Exemption from licensing fee

Cases exempted from licensing fee include:

...

9. Small and medium enterprises converted from household businesses (as stipulated in Article 16 of the Law on Supporting Small and Medium Enterprises) are exempt from licensing fees for a period of 3 years from the date of initial enterprise registration certificate issuance.

a) During the licensing fee exemption period, small and medium enterprises that establish branches, representative offices, or business locations are exempt from licensing fees for such entities during the time the enterprise itself is exempted.

b) Branch, representative office, business location of small and medium enterprises (eligible for licensing fee exemption as per Article 16 of the Law on Supporting Small and Medium Enterprises) established before this Decree takes effect shall have the exemption period counted from the effective date of the Decree until the enterprise's exemption period ends.

c) Small and medium enterprises converted from household businesses prior to the effective date of this Decree shall apply the exemption as prescribed in Articles 16 and 35 of the Law on Supporting Small and Medium Enterprises.

10. Public primary education institutions and public preschools.

In addition, Article 33 of the Education Law 2019 stipulates the forms of general education institutions as follows:

General Education Institutions

General education institutions include:

1. Primary schools;

2. Secondary schools;

3. High schools;

4. General education schools with multiple educational levels.

From the above provisions, it can be seen that public secondary schools (as part of public general education institutions) are exempt from licensing fees.

Shall public secondary schools pay licensing fee in Vietnam? (Image from Internet)

Which entities are licensing fee payers in Vietnam?

According to Article 2 of Decree 139/2016/ND-CP, which prescribes the entities liable to licensing fees, they include organizations and individuals conducting manufacturing and business activities in goods and services, excluding exempted cases as stated in Article 3 of Decree 139/2016/ND-CP, including:

- Enterprises established under the law.

- Organizations established under the Law on Cooperatives.

- Public service units established under the law.

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

- Other organizations engaged in manufacturing and business activities.

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

- Individuals, groups of individuals, and households conducting manufacturing and business activities.

What is the current licensing fee rate in Vietnam?

Under Article 4 of Decree 139/2016/ND-CP (as supplemented by Point a, Clause 2, Article 1 of Decree 22/2020/ND-CP and amended by Clause 2, Article 1 of Decree 22/2020/ND-CP) regarding the rates of licensing fees, the following is prescribed:

- licensing fee rates for organizations conducting manufacturing and business activities in goods and services are as follows:

+ Organizations with charter capital or investment capital over 10 billion VND: 3,000,000 VND/year;

+ Organizations with charter capital or investment capital up to 10 billion VND: 2,000,000 VND/year;

+ Branches, representative offices, business locations, public service providers, other economic organizations: 1,000,000 VND/year.

The fee rates for organizations with charter capital or investment capital above 10 billion VND or up to 10 billion VND are based on the charter capital recorded in the business registration certificate; if there is no charter capital, it is based on the investment capital recorded in the investment registration certificate.

- licensing fee rates for individuals, households conducting manufacturing and business activities in goods and services are as follows:

+ Individuals, groups of individuals, households with annual revenue over 500 million VND: 1,000,000 VND/year;

+ Individuals, groups of individuals, households with annual revenue over 300 to 500 million VND: 500,000 VND/year;

+ Individuals, groups of individuals, households with annual revenue over 100 to 300 million VND: 300,000 VND/year.

+ Revenue used to determine the licensing fee rate for individuals, groups of individuals, households is guided by the Ministry of Finance.

- Small and medium enterprises converted from household businesses (including branches, representative offices, business locations) after the licensing fee exemption period (the fourth year from enterprise establishment): if it ends in the first 6 months of the year, the full annual fee is paid; if it ends in the last 6 months, 50% of the annual fee is paid.

+ Households, individuals, groups of individuals who have dissolved but have resumed manufacturing and business activities in the first 6 months of the year pay the full annual fee; if resuming in the last 6 months, they pay 50% of the annual fee.

- Organizations stipulated at Points a, b of Clause 1, Article 4 Decree 139/2016/ND-CP with changes in charter capital or investment capital, the determination basis for the licensing fee rate is the charter capital or investment capital of the preceding year directly preceding the year of fee calculation.

+ In cases where charter capital or investment capital recorded in business registration certificates or investment registration certificates is in foreign currency, it shall be converted to Vietnamese dong to determine the licensing fee rate based on the buying exchange rate of the commercial bank or credit institution where the fee payer opens an account at the time of fee payment to the state budget.

- A fee payer who is operating submits a document to the tax authority managing their operations regarding the temporary suspension of manufacturing and business activities during the calendar year is not required to pay the licensing fee for the year of suspension provided that: the suspension document must be submitted before the fee payment deadline (January 30 annually) and the licensing fee for the suspension year has not been paid.

In cases of suspension of manufacturing and business activities without ensuring the stated conditions, the full annual licensing fee must be paid.