What is the current rate of licensing fees in Vietnam?

What is the current rate of licensing fees in Vietnam?

(1) Rate of licensing fees for organizations having the production and business of goods and services

The rate of licensing fees for organizations having the production and business of goods and services are specified in Clause 1, Article 4 of Decree 139/2016/ND-CP. Specifically:

(1.1) Organizations with registered capital or investment capital over 10 billion VND: 3,000,000 VND/year;

(1.2) Organizations with registered capital or investment capital of 10 billion VND or less: 2,000,000 VND/year;

Note: The rate of licensing fees for the above two types of organizations are based on the registered capital stated in the business registration certificate; in the absence of registered capital, the rate is based on the investment capital stated in the investment registration certificate.

If there is a change in the registered capital or investment capital, the basis for determining the rate of licensing fees is the registered capital or investment capital of the preceding year.

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

(2) Rate of licensing fees for individuals and households having the production and business of goods and services

The rate of licensing fees for individuals and households having the production and business of goods and services are specified in Clause 2, Article 4 of Decree 139/2016/ND-CP (supplemented by Point a, Clause 2, Article 1 of Decree 22/2020/ND-CP). Specifically:

(2.1) Individuals, groups of individuals, and households with annual revenue over 500 million VND: 1,000,000 VND/year.

(2.2) Individuals, groups of individuals, and households with annual revenue over 300 to 500 million VND: 500,000 VND/year.

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

Revenue to determine the rate of licensing fees for individuals, groups of individuals, and households will be guided by the Ministry of Finance.

(3) Rate of licensing fees for certain other sases:

According to Clause 3, Article 4 of Decree 139/2016/ND-CP (amended by Point b, Clause 2, Article 1 of Decree 22/2020/ND-CP):

(3.1) Small and medium enterprises converted from household businesses (including branches, representative offices, and business locations) when the exemption period for licensing fee ends (the fourth year from the year the enterprise is established):

- In case the exemption period ends in the first half of the year, the full-year rate of licensing fees is applied.

- In case the exemption period ends in the second half of the year, 50% of the full-year rate of licensing fees is applied.

Households, individuals, and groups of individuals engaged in production and business activities that have dissolved and resumed production and business activities in the first half of the year will pay the full-year rate of licensing fees; if resumed in the second half of the year, 50% of the full-year rate of licensing fees is applied.

(3.2) Taxpayers who are operating and send a written notification to the tax authorities about temporarily ceasing production and business activities within the calendar year are not required to pay the licensing fee for the year of temporary cessation provided that the notification is sent before the deadline for paying the tax (January 30 annually) and they have not yet paid the licensing fee for the year they are ceasing activities.

In case the condition above is not met, the full-year rate of licensing fees must be paid.

What is the current rate of licensing fees in Vietnam? (Image from the Internet)

Which entities are licensing fee payers in Vietnam ?

According to Article 2 of Decree 139/2016/ND-CP, those required to pay the licensing fee (also known as licensing tax) are organizations and individuals engaged in production and business activities of goods and services, excluding cases stipulated in Article 3 of Decree 139/2016/ND-CP, including:

(1) Enterprises established under the provisions of the law.

(2) Organizations established under the Law on Cooperatives.

(3) Public service units established under the provisions of the law.

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

(5) Other organizations engaged in production and business activities.

(6) Branches, representative offices, and business locations of the organizations specified in (1), (2), (3), (4), and (5) (if any).

(7) Individuals, groups of individuals, and households engaged in production and business activities.

What is the deadline for submitting licensing fee declarations in Vietnam?

Based on Clause 1, Article 10 of Decree 126/2020/ND-CP, the deadline for submitting licensing fee declarations is as follows:

- Newly established taxpayers (except for household businesses and individual businesses) including small and medium enterprises converted from household businesses or establishing new dependent units, business locations, or beginning production and business activities must file licensing fee declarations no later than January 30 of the following year after establishment or commencement of production and business activities.

In case of changes in capital within the year, taxpayers must file licensing fee declarations no later than January 30 of the year following the year the changes occur.

- Household businesses and individual businesses are not required to file licensing fee declarations. The tax authority will base on tax declarations and the tax management database to determine revenue as the basis for calculating the licensing fee amount to be paid and will notify the taxpayers according to the provisions of Article 13 of Decree 126/2020/ND-CP.