What are the current licensing fee rates in Vietnam?

What are bases for calculating licensing fee in Vietnam?

First of all, licensing tax or licensing fee is an amount assigned to organizations or individuals to fulfill their tax obligations to the state agency according to Clause 2 Article 3 of the 2015 Law on Fees and Charges.

The licensing fee base is stipulated in Article 6 of Decree 10/2022/ND-CP where the licensing fee base is the taxable value and the licensing fee collection rate (%).

What are the current licensing fee rates in Vietnam?

According to Article 8 of Decree 10/2022/ND-CP, the licensing fee rates are as follows:

(1) Houses and land: The rate is 0.5%.

(2) Hunting guns; sports training and competition guns: The rate is 2%.

(3) Watercraft, including barges, motorboats, tugboats, push boats, submarines, submersibles; boats, including yachts; airplanes: The rate is 1%.

(4) Motorcycles: The rate is 2%.

Exceptions:

- Motorcycles owned by organizations or individuals in centrally-run cities; provincial cities; district-level towns where the provincial People's Committee is headquartered pay a first licensing fee of 5%.

- For motorcycles paying the licensing fee from the second time onwards, the rate is 1%. If the asset owner has declared and paid the licensing fee at 2% and then transfers to organizations or individuals in the areas specified in point a of this clause, the licensing fee is 5%.

(5) Automobiles, trailers or semi-trailers pulled by automobiles, similar vehicles: The rate is 2%.

Exceptions:

- Passenger cars with 09 seats or less (including pick-up trucks): The first licensing fee is 10%.

In case a higher rate needs to be applied to suit the actual conditions of each locality, the provincial People's Council of the centrally-run city decides to increase the rate but not more than 50% of the general rate for passenger cars with 09 seats or less.

- Pick-up trucks carrying goods with a permissible transport weight of less than 950 kg and with 5 seats or less, VAN trucks with a permissible transport weight of less than 950 kg pay the first licensing fee at 60% of the first licensing fee rate for passenger cars with 09 seats or less.

- Battery-powered electric cars:

Within 3 years from the effective date of Decree 10/2022/ND-CP (i.e., March 1, 2022): the first licensing fee is 0%.

In the next 2 years: the first licensing fee is 50% of the rate for gasoline, diesel cars with the same seating capacity.

+ For automobiles under category (5): the licensing fee from the second time onwards is 2%, uniformly applied nationwide.

Based on the vehicle type recorded in the Certificate of Technical Safety and Environmental Protection issued by the Vietnamese Registration Agency, the tax authority determines the licensing fee rates for automobiles, trailers or semi-trailers pulled by automobiles, similar vehicles as stipulated in this clause.

- For hulls, frame assemblies, engine assemblies, and engine blocks regulated in Clause 8 of Article 3 of Decree 10/2022/ND-CP, replaced and registered with competent state agencies, the corresponding licensing fee rates of each type of asset are applied.

- Organizations and individuals exempted or not required to pay the first licensing fee when registering for automobile and motorcycle ownership, if transferring to other organizations, individuals, or changing the use purpose that is not exempted from licensing fees as stipulated, the organizations and individuals registering for automobile and motorcycle ownership pay the first licensing fee on the remaining value of the asset.

- Organizations and individuals transferring automobiles and motorcycles with established public ownership as per legal regulations, where such automobiles and motorcycles had previous ownership registration, the transferee pays the licensing fee from the second time onwards.

Organizations and individuals transferring automobiles and motorcycles with established public ownership, where such ownership registration does not exist or cannot be determined, the transferee pays the first licensing fee upon ownership registration.

The maximum licensing fee rate for assets regulated in Article 8 of Decree 10/2022/ND-CP is capped at 500 million VND per asset per registration, excluding passenger cars with 9 seats or less, airplanes, and yachts.

What are the current licensing fee rates in Vietnam? (Image from the Internet)

What are base prices for calculating licensing fee for houses and land in Vietnam?

According to point a Clause 1 Article 3 of Circular 13/2022/TT-BTC, the licensing fee base for houses and land is as follows:

The licensing fee base value of land is determined as follows:

Value of land subject to licensing fee (VND) = Area of land subject to licensing fee (m^2) x Price per square meter of land (VND/m^2) according to the Land Price List issued by the provincial People's Committee

*In which:

- The area of land subject to licensing fee is the entire area of the parcel under the lawful management and use of the organization, household, or individual as determined and provided by the Land Registration Office in the “Information transfer sheet to determine financial obligations on land”.

- The price per square meter of land in the Land Price List issued by the provincial People's Committee at the time of licensing fee declaration in accordance with land laws.

- In cases where the land price in the transfer contract is higher than the price issued by the provincial People's Committee, the licensing fee base for land is the price in the transfer contract.

If the land price in the transfer contract is lower than the price issued by the provincial People's Committee, the licensing fee base for land is the price issued by the provincial People's Committee at the time of licensing fee declaration.

- If the land user has been issued a Land Use Right Certificate without paying the licensing fee, and thereafter is approved by the competent authorities to change the land use purpose to a new use that requires payment of the licensing fee, the licensing fee base is the land price according to the new land use purpose in the Land Price List issued by the provincial People’s Committee at the time of the licensing fee calculation.

According to point b Clause 1 Article 3 of Circular 13/2022/TT-BTC, the licensing fee base for houses is determined as follows:

Value of house subject to licensing fee (VND) = Area of house subject to licensing fee (m^2) x Price per square meter of house (VND/m^2) x Remaining quality percentage (%) of the house subject to licensing fee

*In which:

+ The area of the house subject to licensing fee is the entire floor area of the house (including the area of accompanying auxiliary structures) under the lawful ownership of the organization, family, or individual.

+ The price per square meter of house is the actual new construction price per square meter for each house grade and class issued by the provincial People's Committee according to construction laws at the time of licensing fee declaration.

The Department of Finance coordinates with the Department of Construction and relevant local agencies based on point b Clause 1 Article 7 of Decree 10/2022/ND-CP to establish the licensing fee base for houses and submit it to the provincial People’s Committee for issuing the Price List to be applied locally.

+ The remaining quality percentage of the house subject to licensing fee is issued by the provincial People’s Committee according to legal regulations.

- If the house price in the sales contract is higher than the price issued by the provincial People’s Committee, the licensing fee base for the house is the price in the sales contract.

If the house price in the sales contract is lower than the price issued by the provincial People’s Committee, the licensing fee base for the house is the price issued by the provincial People’s Committee according to construction laws at the time of licensing fee declaration.

- For condominiums, the licensing fee base is the price excluding the maintenance fund for shared ownership parts of the condominium.

If the sales contract and the house sales invoice do not separate the maintenance fund for shared ownership parts of the condominium, the licensing fee base is the total selling price on the house sales invoice or the sales contract.