Where are the locations for submitting licensing fee declaration dossiers for taxpayer that has business operation in more than one province in Vietnam?

Where are the locations for submitting licensing fee declaration dossiers for taxpayer that has business operation in more than one province in Vietnam?

Based on point k, clause 1, Article 11 of Decree 126/2020/ND-CP which regulates the location for submitting the licensing fee declaration dossier as follows:

Location for submitting tax declaration dossiers

Taxpayers adhere to the prescribed locations for submitting tax declaration dossiers as per clauses 1, 2, and 3 of Article 45 of the Law on Tax Administration and the following stipulations:

1. The location for submitting tax declaration dossiers for taxpayers with multiple activities and operations across different provincial areas, as stipulated in point a, point b, clause 4, Article 45 of the Law on Tax Administration, is the tax authority managing the business activities in provinces or cities other than where the main headquarters are located in the following cases:

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k) Declare the licensing fee at the location of the dependent unit, place of business.

According to the above regulation, in the case where a business engages in multiple activities across different provincial areas, they submit the licensing fee declaration dossier at the location of the dependent unit, place of business.

Where are the locations for submitting licensing fee declaration dossiers for taxpayer that has business operation in more than one province in Vietnam? (Image from Internet)

What is the current rate of the licensing fee in Vietnam?

According to Article 4 of Decree 139/2016/ND-CP (amended and supplemented by clause 2, Article 1 of Decree 22/2020/ND-CP), the licensing fee rates for the year 2024 are stipulated as follows:

[1] The licensing fee rates for organizations engaging in the production and business of 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 of 10 billion VND or less: 2,000,000 VND/year.

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

The licensing fee rate for organizations as stipulated in points (i) and (ii) is 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.

[2] The licensing fee rates for individuals and households engaging in the production and business of goods and services are as follows:

- Individuals, groups of individuals, households with an annual revenue over 500 million VND: 1,000,000 VND/year.

- Individuals, groups of individuals, households with an annual revenue over 300 million VND to 500 million VND: 500,000 VND/year.

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

- Revenue used as the basis for determining the licensing fee rate for individuals, groups of individuals, and households according to the guidance of the Ministry of Finance.

[3] Small and medium enterprises converting from business households (including branches, representative offices, business locations) after the exemption period for licensing fees (the fourth year from the year of enterprise establishment): if ending in the first 6 months of the year, pay the full-year licensing fee; if ending in the last 6 months, pay 50% of the full-year licensing fee.

Households, individuals, and groups of individuals that have dissolved but resume production and business activities in the first 6 months of the year will pay the full-year licensing fee; if in the last 6 months, pay 50% of the full-year licensing fee.

[4] Organizations with a charter capital or investment capital over 10 billion VND and organizations with a charter capital or investment capital of 10 billion VND or less, in the case of change in charter capital or investment capital, will base the licensing fee rate on the capital amount of the preceding year immediately before the year for calculating the licensing fee.

In cases where the charter capital or investment capital is recorded in foreign currency in the business registration certificate or investment registration certificate, they must be converted to Vietnamese Dong as the basis for determining the licensing fee rate according to the buying exchange rate of the commercial bank or credit institution where the licensing fee payer has their account, at the time of payment into the state budget.

[5] Fee payers who are active and have sent a written notice to the direct tax managing agency about temporarily suspending production and business activities in the calendar year do not have to pay the licensing fee for the year in which they suspend business, provided that: the written request for suspension of production and business activities is sent to the tax agency before the deadline for fee payment (January 30 annually) and they have not paid the licensing fee for the year they request suspension.

If the suspension conditions as mentioned above are not met, pay the full year’s licensing fee.

What are penalties for late payment of the licensing fee in Vietnam?

Based on clause 2, Article 59 of the Law on Tax Administration 2019 which stipulates penalties for late payment of tax as follows:

Penalties for late payment of tax

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2. Payment rate and time frame for late payment are stipulated as follows:

a) The late payment rate is 0.03% per day calculated on the late payment tax amount;

b) The calculation period for late payment continues from the day following the day the late payment arises as stipulated in clause 1 of this Article to the day immediately before the outstanding tax amount, tax recovery money, additional tax, assessed tax amount, or slow transfer tax is paid into the state budget.

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Thus, according to the above regulation, businesses delaying their licensing fee payment shall pay late payment fees according to the following formula:

Late payment amount = licensing fee owed x 0.03% x Number of days late

Note: The calculation period for late payment is continuous from the day following the day the late payment arises as stipulated in clause 1, Article 59 of the Law on Tax Administration 2019 until the day immediately before the outstanding tax amount, tax recovery money, additional tax, assessed tax amount, or slow transfer tax is paid into the state budget.