Which cases are exempt from licensing fee in Vietnam? What is the current licensing fee rate in Vietnam?

Which cases are exempt from licensing fee in Vietnam?

Based on Article 3 of Decree 139/2016/ND-CP (amended and supplemented by item 1, Article 1 of Decree 22/2020/ND-CP), the following cases are exempt from licensing fee:

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

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

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

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

- Communal cultural post offices; press agencies (print, radio, television, electronic).

- Cooperatives, cooperative alliances (including branches, representative offices, business locations) operating in the agricultural sector according to the provisions of the law on agricultural cooperatives.

- People's credit funds; branches, representative offices, business locations of cooperatives, cooperative alliances, and private enterprises operating in mountainous areas. Mountainous areas are defined according to the regulations of the Committee for Ethnic Minorities.

Which entity is required to pay licensing fee in Vietnam?

According to Article 2 of Decree 139/2016/ND-CP, those required to pay licensing fee are organizations and individuals engaged in the production and business of goods and services, except for the cases specified in Article 3 of Decree 139/2016/ND-CP, including:

- Enterprises established in accordance with the law.

- Organizations established under the Law on Cooperatives.

- Public service units established by law.

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

- Other organizations engaged in production and business activities.

- Branches, representative offices, and business locations of the organizations specified in clauses 1, 2, 3, 4, and 5 of Article 3 of Decree 139/2016/ND-CP (if any).

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

What is the current licensing fee rate in Vietnam?

The licensing fee rate is stipulated in Article 4 of Decree 139/2016/ND-CP (amended and supplemented by item 2 of Article 1 of Decree 22/2020/ND-CP) as follows:

- The licensing fee rate for organizations engaged in the production and business of goods and services:

+ 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 for organizations 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 rate for individuals, and households engaged in the production and business of goods and services:

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

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

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

+ Revenue to determine the licensing fee rate for individuals, groups of individuals, households is guided by the Ministry of Finance.

- Small and medium-sized enterprises transitioning from household businesses (including branches, representative offices, business locations) at the end of their licensing fee exemption period (the fourth year since establishment): if ending in the first 6 months of the year, the full annual tax is paid; if ending in the last 6 months, 50% of the annual tax is paid.

Households, individuals, groups of individuals that dissolved businesses and resume production and business activities in the first 6 months of the year pay the full license tax for the year; in the last 6 months, they pay 50% of the annual tax.

- For organizations with charter capital or investment capital over 10 billion VND and those with capital of 10 billion VND or less having changes in charter or investment capital, the base for determining the licensing fee is the charter or investment capital of the previous year.

If the charter or investment capital is recorded in the business registration certificate or investment registration certificate in foreign currency, it shall be converted into Vietnamese Dong to determine the licensing fee rate at the buying rate of the commercial bank or financial institution where the license taxpayer maintains an account at the time the license tax is paid to the state budget.

- Taxpayers currently operating may submit a letter to the directly managing tax authority requesting a temporary suspension of production and business within the calendar year to be exempt from licensing fee for that year, provided that: the suspension request is submitted to the tax authority before the license tax due date (January 30 annually) and the licensing fee for the year of the suspension request has not been paid.

If the conditions for a temporary business suspension are not met, the full annual license tax must be paid.