What are conditions for licensing fee exemption when suspending business in 2024 in Vietnam?

What are conditions for licensing fee exemption when suspending business in 2024 in Vietnam?

In Clause 3, Article 4, Circular 302/2016/TT-BTC, amended by Clause 4, Article 1, Circular 65/2020/TT-BTC, there are regulations on amounts of licensing fees as follows:

Amounts of licensing fees

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3. Any organization, branch, representative office or business location (that is not entitled to license tax exemption in the first year of establishment or do not commence its production/business) established and granted the tax registration certificate, TINs and enterprise ID number within the first 6 months of the year and within the last 6 months of the year shall pay license tax for the whole year and pay 50% of the license tax payable for the whole year respectively.

At the end of the period of exemption from the license tax (from the fourth year from the date of establishment), a SME converted from a household business (including its branches, representative offices and/or business locations) shall pay the license tax as follows: If its exemption period ends in the first 6 months of a year, it must pay the license tax for the whole year, if its exemption period ends in the last 6 months of a year, it must pay 50% the license tax payable for the whole year.

An operating license taxpayer that has notified its/his/her supervisory tax authority in writing of its suspension of production/business in a calendar year (from January 01 to December 31) is not required to pay the license tax for that year of production/business suspension if the taxpayer has sent a written notification of production/business suspension to its/his/her supervisory tax authority before the prescribed deadline for paying the license tax (January 30 annually) and has made no payment of the license tax for the planned year of suspension. The taxpayer must pay the license tax for the whole year in case of failure to meet the abovementioned conditions for production/business suspension.

Thus, the conditions for licensing fee exemption when suspending business are:

- The company suspends business for the entire calendar year (from January 1 to December 31)

- Document requesting suspension of production and business activities sent to the tax agency or business registration agency before the prescribed fee payment deadline (January 31 every year);

- If you have not paid the licensing fee for the year, please suspend production and business activities.

In case the company suspends business for less than a full year, it does not meet the above conditions and must still pay license tax for the year of suspension of business.

What are conditions for licensing fee exemption when suspending business in 2024 in Vietnam? (Image from the Internet)

When is deadline for submitting licensing fee declaration documents when changing capital in Vietnam?

In Clause 1, Article 10 of Decree 126/2020/ND-CP, there are regulations on licensing fees as follows:

Deadlines for submission of declarations of land-related amounts, licensing fees, registration fees, fees for grant of rights and other amount payables prescribed by regulations of law on management and use of public property

Tax declaration dossiers shall be submitted by the deadlines specified in Article 44 of the Law on Tax administration. The deadlines for submitting declarations of land-related amounts, licensing fees, registration fees, licensing fees and other amount payables prescribed by regulations of law on management and use of public property prescribed in Clause 5 Article 44 of the Law on Tax administration are specified in below:

1. Licensing fees

a) New businesses (except household businesses and individual businesses), including medium and small enterprises converted from household businesses) and existing businesses that establish new dependent units or business location shall submit the licensing fee declaration by January 30 of the year preceding the establishment or inauguration year.

In case capital in changed during the year, the licensing fee payer shall submit the declaration by January 30 of the year succeeding the year in which the change occurs.

b) Household businesses and individual businesses are not required to submit licensing fee declarations. Tax authorities shall determine the licensing fees payable according to their tax declaration dossiers and tax administration database and inform them in accordance with Article 14 of this Decree.

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Thus, the deadline for submitting licensing fee declaration documents when changing capital is January 30 of the year following the year in which the change information occurs in Vietnam.

How much licensing fee should I pay when the charter capital is less than 10 billion in Vietnam?

In Clause 1, Article 4, Circular 302/2016/TT-BTC has regulations on licensing fee rates as follows:

Licensing fee collection rate

1. The amounts of annual licensing fees for organizations engaging in business as follows:

a) Organizations with charter capital and investment capital of greater than VND 10 billion: VND 3,000,000;

b) Organizations with charter capital and investment capital of less than or equal to VND 10 billion: VND 2,000,000;

c) Branches, representative offices, business premises, public service providers, other business entities: VND 1,000,000.The amounts of licensing fees for the organizations specified in this Clause is based on the charter capital written in the certificate of business registration, the certificate of enterprise registration, or the charter of cooperatives. In case of absence of charter capital, it is based on the investment capital written in the certification of investment registration or decision on investment policies.

If the organizations prescribed in Point a, b of this Clause change their charter capital or investment capital, the ground for determining the amount of licensing fees is their charter capital or investment capital of the year preceding the year of calculation of licensing fees.

Where the charter capital or investment capital written in the certificate of business registration or certificate of investment registration is in foreign currency, it shall be converted into Vietnamese dong as a basis for determining the amount of licensing fees in accordance with the buying rate of commercial banks or credit institutions where the licensing fee payers open their accounts at the time they make payment to the state budget.

Thus, companies with charter capital of less than 10 billion VND must pay licensing tax of 2,000,000 VND/year in Vietnam.

Best regards!