When do new businesses that have not yet started operations pay licensing fees in Vietnam?

When do new businesses that have not yet started operations pay licensing fees in Vietnam?

Article 10 of Decree 126/2020/ND-CP stipulates 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 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, for new businesses that have not yet come into operation, the licensing fee will be paid no later than January 30 of the year following the year of establishment or commencement of production and business activities.

For example, if the business is established in 2023, the deadline to pay the licensing fee is January 30, 2024. If the business is established in 2024, the deadline to pay the licensing fee is January 30, 2024. 2025.

When do new businesses that have not yet started operations pay licensing fees in Vietnam? (Image from the Internet)

In what cases is the licensing fee exempted in Vietnam?

In Article 3 of Decree 139/2016/ND-CP amended and supplemented by Clause 1, Article 1 of Decree 22/2020/ND-CP, it is stipulated that exemption from licensing fees include:

The cases of exemption from licensing fees are:

1. The individuals, groups of individual and households that have their trade/production activities with annual revenues of less than 100 million dong.

2. The individuals, groups of individual and households that have their irregular trade/production activities without fixed location as guided by the Ministry of Finance.

3. The individuals, groups of individual and households that produce salt.

4. The organizations, individuals, groups of individual and households that do the aquaculture, fisheries and fishing logistic services.

5. The commune cultural post offices and press agencies (printed, radio, television and online newspapers).

6. Cooperatives and cooperative unions (including their branches, representative offices and business locations) operating in the field of agriculture as regulated in the law on agricultural cooperatives.

7. People’s credit funds; branches, representative offices and business locations of cooperatives/cooperative unions and of sole proprietorships operating in mountainous regions. Mountainous regions are determined according to regulations of the Committee for Ethnic Affairs.

8. Exemption of license fees for the first year from the date of establishment or official commencement of production/business (from January 01 to December 31) shall be granted to:

a) New organizations (issued with new TINs/enterprise ID numbers).

b) Household businesses, individuals or groups of individuals engaging in production/business.

c) During the exemption period, if an organization, household business, individual or group of individuals establishes a new branch, representative office or business location, the new branch, representative office or business location shall be also exempted from the license fee for the same exemption period granted to that organization, household business, individual or group of individuals.

9. Small- and medium-sized enterprises (SMEs) transformed from household businesses (as prescribed in Article 16 of the Law on assistance for small- and medium-sized enterprises) shall be exempted from the license fee within 03 years from the date of issuance of initial enterprise registration certificate.

a) During the exemption period, if a SME establishes a new branch, representative office or business location, the new branch, representative office or business location shall be also exempted from the license fee for the same exemption period granted to that SME.

b) The branch, representative office or business location of a SME (that is eligible to be exempted from the license fee as prescribed in Article 16 of the Law on assistance for small- and medium-sized enterprises) established before this Decree takes legal effect shall be exempted from the license fee for the period commencing from the effective date of this Decree to the end of the period for which that SME is exempted from the license fee.

c) SMEs transformed from household businesses before this Decree takes legal effect shall be exempted from the license fee according to Article 16 and Article 35 of the Law on assistance for small- and medium-sized enterprises.

10. Public general education schools and public pre-schools

Who are licensing fee payers in Vietnam?

In Article 2 of Decree 139/2016/ND-CP, the licensing fee payers are the organizations and individuals that operating their trade/production of goods and services except the cases specified in Article 3 of Decree 139/2016/ND-CP, including:

1. The enterprises which are established under the regulations of law.

2. The organizations which are established under the Law on Cooperatives.

3. The public service providers which are established under the regulations of law.

4. The business organizations of the political organizations, the social – political organizations, the occupational – social organizations and people's armed units.

5. Other organizations which have their trade/production activities.

6. The branches, the representative offices of organizations specified in Paragraphs 1, 2, 3, 4 and 5 of this Article (if any).

7. The individuals, groups of individuals and households that have their trade/production activities.

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