Is amount of road use fee using as expense of fee collection subject to tax in Vietnam?

Is amount of road use fee using as expense of fee collection subject to tax in Vietnam?

Article 8 of Circular 70/2021/TT-BTC stipulates the management and use of fees as follows:

1. Directorate for Roads of Vietnam remit all the fee received to the state budget. The fund for covering the costs incurred in fee collection shall be set aside from the state budget as allocated in the estimate of the collector as prescribed.

If Directorate for Roads of Vietnam may fix the operating cost from the fee collected as prescribed in clause 1 Article 4 of the Government’s Decree No. 120/2016/ND-CP dated August 23, 2016 on elaboration and guidelines for the Law on fees and charges, it can retain one point two percent (1,2%) of the actual fee amount collected to cover its expense for managing the collection of the road use fee as per regulations. The Directorate for Roads of Vietnam shall deposit the remaining amount into its budgetary contribution account at the State Treasury within no more than 05 working days from the date of fee collection.

2. For registry agencies

a) Fee collectors can retain one point two percent (1,32%) of the amount of road use fee actually collected for:

- The expense of fee collection as per regulations.

- The three percent (3%) of the fee amount retained (1,32%) shall be transferred to the Vietnam Register for the nationwide registry agencies' system of management of the collection and payment.

b) A portion of the fee amount collected shall be refunded to the entities that do not incur the fee pursuant to Section 2, Article 2 of this Circular.

c) The remaining portion of the fee amount collected (less those defined in Point a and Point b of this Section) shall be transferred (direct transfer or possibly through commercial banks) to the Vietnam Register.  Vietnam Register shall submit this fee amount into the budgetary contribution account at the State Treasury within no more than 05 working days from the date of fee collection.

3. Vietnam Register and the Directorate for Roads of Vietnam shall declare, submit and finalize the fee amount collected on monthly and annual basis, respectively, according to Decree No. 126/2020/ND-CP dated October 19, 2020 by the Government on guidelines for the implementation of certain articles of the Tax Administration Law. The Vietnam Register shall remit the fee (specified in point c section 2 of this Article), Directorate for Roads of Vietnam shall remit 98,8% of the fee collected to the state budget under the Chapter for the Ministry of Transport and under Subheading as per current regulations of the Government; as the spending on the maintenance of the road infrastructure system as prescribed in the Law on Road Traffic.

4. The fee amount retained for fee collection:  if the collection of the fee is recorded in entries under the corporate financial accounting regime, the fee amount retained shall be the collector’s income and declare taxes (VAT, corporate income tax) as per the tax law. If the collector is an administrative agency or public service provider, the fee amount retained shall be managed and used as prescribed.

Based on the above regulations in Vietnam, in your case, you are a fee collection organization accounting according to the corporate finance mechanism, the remaining fee amount is the revenue of the unit and is subject to declaring and paying VAT according to the regulations. 

Is amount of road use fee using as expense of fee collection subject to tax in Vietnam? (Image from Internet)

What are regulations on a road traffic fee receipt in Vietnam?

According to Article 7 of Circular 70/2021/TT-BTC regulating fee receipt, accordingly:

1. Fee collectors shall issue fee receipts to payers when collecting the fee as per Circular No. 303/2016/TT-BTC dated November 15, 2016, guiding the printing, issuance, management and use of documents for the collection of charges and fees belonging to the state budget.

2. The Directorate for Roads of Vietnam shall issue “national road fee” tickets to automobiles of national defense and public security forces upon issuance of the fee receipt as prescribed in clause 1 of this Article.

According to this regulation in Vietnam, road traffic fee receipts are made by the collection organization and the Directorate for Roads of Vietnam according to the above regulations.

Best regards!