Vietnam: Are public general education institutions required to pay licensing fee?

Vietnam: Are public general education institutions required to pay licensing fee?

Pursuant to Clause 10, Article 3 of Decree 139/2016/ND-CP amended and supplemented by Clause 1, Article 1 of Decree 22/2020/ND-CP which stipulates exemptions from the licensing fee as follows:

Exemption from licensing fee

The cases eligible for licensing fee exemption include:

1. Individuals, groups of individuals, and households engaged in production and business activities with an annual revenue of 100 million VND or less.

2. Individuals, groups of individuals, and households engaged in irregular production and business activities; without a fixed location as guided by the Ministry of Finance.

3. Individuals, groups of individuals, and households engaged in salt production.

4. Organizations, individuals, groups of individuals, and households engaged in aquaculture, fishing, and fishery logistics services.

5. Communal cultural post offices; press agencies (print media, radio, television, electronic newspapers).

6. Cooperatives, cooperative unions (including branches, representative offices, and business locations) operating in the field of agriculture according to the law on agricultural cooperatives.

7. People's credit funds; branches, representative offices, business locations of cooperatives, cooperative unions, and private enterprises trading in mountainous areas. The mountainous areas are determined according to the regulations of the Committee for Ethnic Affairs.

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10. Public general education institutions and public kindergarten institutions.

Public general education institutions are exempt from licensing fee and thus are not required to pay licensing fee.

Vietnam: Are public general education institutions required to pay licensing fee? (Image from the Internet)

Which entities are licensing fee payers in Vietnam?

Pursuant to Article 2 of Decree 139/2016/ND-CP which stipulates the subjects required to pay licensing fee as follows:

Persons liable to pay licensing fee are organizations and individuals engaged in the production and trading of goods and services (except for those exempt from licensing fee as mentioned in Section 2), including:

- Enterprises established in accordance with the law.

- Organizations established under the Law on Cooperatives.

- Public service providers established in accordance with the law.

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

- Other organizations engaged in production and business activities.

- Branches, representative offices, and business locations of the above-mentioned organizations (if any).

- Individuals, groups of individuals, and households engaged in production and business activities.

What are the current licensing fee rates in Vietnam?

Pursuant to Article 4 of Decree 139/2016/ND-CP (supplemented by Point a, Clause 2, Article 1 of Decree 22/2020/ND-CP, amended by Clause 2, Article 1 of Decree 22/2020/ND-CP) which stipulates the licensing fee rate as follows:

- The licensing fee level for organizations engaged in the production and trading of goods and services is 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 of 10 billion VND or less: 2,000,000 VND/year;

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

The licensing fee level for organizations with charter capital or investment capital over 10 billion VND or 10 billion VND or less is based on the charter capital stated in the business registration certificate. If there is no charter capital, it is based on the investment capital stated in the investment registration certificate.

- The licensing fee level for individuals and households engaged in the production and trading of goods and services is as follows:

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

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

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

+ Revenue as the basis for determining the licensing fee level for individuals, groups, or households is guided by the Ministry of Finance.

- Small and medium-sized enterprises transitioning from household businesses (including branches, representative offices, business locations) after the period of licensing fee exemption (the fourth year since the enterprise's establishment): if ending within the first 6 months of the year, they pay the full annual licensing fee rate; if ending within the last 6 months of the year, they pay 50% of the annual licensing fee rate.

+ Households, individuals, or groups of individuals engaging back in production and business activities within the first 6 months of the year, after dissolution, pay the full annual licensing fee rate; if in the last 6 months, they pay 50% of the annual licensing fee rate.

- Organizations specified in Points a, b, Clause 1, Article 4 of Decree 139/2016/ND-CP that undergo changes in charter capital or investment capital, will base the licensing fee level on the charter capital or investment capital of the year preceding the licensing fee year.

+ If the charter capital or investment capital is recorded in the business registration certificate or the investment registration certificate in foreign currency, it must be converted into Vietnamese Dong to determine the licensing fee level according to the buying exchange rate of the commercial bank or credit institution where the taxpayer opens an account at the time the taxpayer remits the tax to the state budget.

- Taxpayers who are operating and have a document sent to the directly managing tax authority about temporarily suspending production and business activities within the calendar year are not required to pay licensing fee for the year of business suspension provided that: the document requesting the suspension of production and business activities is submitted to the tax authority before the deadline for paying the licensing fee as prescribed (January 30 annually) and the licensing fee for the year of suspension has not yet been paid.

If the temporary suspension of production and business activities does not meet the aforementioned conditions, the full annual licensing fee rate must be paid.