What are regulations on licensing fee declaration for individual business who resumes operations in Vietnam?

What are regulations on licensing fee declaration for individual business who resumes operations in Vietnam?

Pursuant to the provisions of Clause 9, Article 18 of Decree 126/2020/ND-CP, the following regulations apply:

The licensing fee is paid annually. To be specific:

- The deadline for licensing fee payment is no later than January 30 each year.

- For small and medium-sized enterprises transitioning from household businesses (including dependent units and business locations of enterprises) at the end of the licensing fee exemption period (the fourth year from the establishment of the enterprise), the deadlines for licensing fee payment are as follows:

+ If the exemption period ends in the first 6 months of the year, the deadline for licensing fee payment is no later than July 30 of the year the exemption ends.

+ If the exemption period ends in the last 6 months of the year, the deadline for licensing fee payment is no later than January 30 of the year following the year the exemption ends.

- When business households and individuals cease production and then resume, the deadlines for licensing fee payment are as follows:

+ If operations resume in the first 6 months of the year: No later than July 30 of the year operations resume.

+ If operations resume in the last 6 months of the year: No later than January 30 of the year following the year operations resume.

Thus, if a individual business resumes operations in the first 6 months of the year, the latest licensing fee declaration should be by July 30 of that year. If operations resume in the last 6 months of the year, the latest time is January 30 of the succeeding year.

What are regulations on licensing fee declaration for individual business who resumes operations in Vietnam? (Image from the Internet)

Shall individual businesses submit declarations of licensing fee in Vietnam?

According to Point b, Clause 1, Article 10 of Decree 126/2020/ND-CP, the regulations state as follows:

Deadline for submitting tax declaration dossiers for land-related revenues, licensing fee, registration fees, land use rights fees, and other revenues under the management and use of public property law.

Taxpayers comply with the deadline for submitting tax declaration dossiers as prescribed in Article 44 of the Tax Administration Law. The submission timeline of tax declaration dossiers for land-related revenues, licensing fee, registration fees, land use rights fees, and other revenues under the management and use of public property law are governed as follows:

1. licensing fee

a) Entities paying licensing fee (excluding business households and individuals) newly established (including small and medium-sized enterprises transitioned from household businesses) or establishing additional dependent units, business locations, or commencing production and business operations must submit a declarations of licensing fee no later than January 30 of the year following the year of establishment or commencement of production and business.

In the event of a change in capital within the year, taxpayers must submit a declarations of licensing fee no later than January 30 of the year following the year the capital change occurs.

b) Business households and individuals are not required to submit declarations of licensing fees. The tax authority will use tax declaration dossiers and tax management databases to determine the basis for calculating the payable licensing fee amount and notify the licensing fee payer to comply with this Decree's Article 13.

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Thus, according to the above provisions, individual businesses are not required to submit a declarations of licensing fee.

Is the licensing fee declared annually in Vietnam?

Based on Clause 3, Article 8 of Decree 126/2020/ND-CP concerning taxes declared monthly, quarterly, annually, by each tax obligation occurrence, and tax finalization declaration, the following applies:

Taxes declared monthly, quarterly, annually, by each tax obligation occurrence, and tax finalization declaration

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3. Types of taxes and other revenues belonging to the state budget are declared annually, including:

a) licensing fee.

b) Personal income tax for individuals acting as lottery agents, insurance agents, multi-level sales, who throughout the year did not have tax withheld due to not reaching the tax payable level but determined at year-end to be subjected to taxation.

c) Taxes and revenues of business households, individuals paying taxes by estimations, individuals renting property opting for annual tax declaration.

d) Non-agricultural land use tax.

Taxpayers declare taxes annually for each parcel and aggregating declaration for homestead land in the case of land use rights over multiple parcels within the same district or across districts in the same provincial area. Taxpayers may not need to aggregate declarations in the following cases:

d.1) Taxpayers with land use rights over one or more parcels within the same district but total land area subject to tax does not exceed the homestead land limit where land use rights are established.

d.2) Taxpayers with land use rights over multiple parcels across different districts that have no parcel exceeding limits and total grain area subject to tax not exceeding the homestead land limit where land use rights are established.

đ) Agricultural land use tax.

e) Land, water surface rent paid annually.

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Thus, the licensing fee is a tax category declared annually.