Newly established businesses need to know the taxes and fees to be paid to operate their business legally, especially licensing fees. Below are 05 notes about licensing fees according to the Decree No. 126/2020/NĐ-CP, which has just been issued by Vietnam’s Government on elaboration of the Law on Tax Administration.
Article table of contents
1. Household businesses and individual businesses are not required to submit licensing fee declarations
According to Article 10 of the Decree No. 126/2020/NĐ-CP of Vietnam’s Government, 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.
According to Article 5 of the Decree No. 139/2016/NĐ-CP of Vietnam’s Government, the declaration of licensing fees is done once when the fee payers newly start their business activities. According to Clause 7 Article 2 of the Decree No. 139/2016/NĐ-CP, licensing fee payers include individuals and households.
Thus, from December 05, 2020, household businesses and individual businesses are no longer required to submit licensing fee declarations.
2. Licensing fee declarations shall be done several times
According to Article 10 of the Decree No. 126/2020/NĐ-CP of Vietnam’s Government, in case capital is 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.
According to Article 5 of the Decree No. 139/2016/NĐ-CP of Vietnam’s Government, the licensing fee payers who have just started doing business only declare the licensing fee once.
Thus, from December 05, 2020, in case capital is changed during the year, the licensing fee payer shall submit the declaration after the change has occurred instead of only declaring the licensing fee once as currently prescribed.
3. Licensing fee payer shall submit the declaration by January 30
According to Article 10 of the Decree No. 126/2020/NĐ-CP of Vietnam’s Government, 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.
According to Article 5 of the Decree No. 139/2016/NĐ-CP of Vietnam’s Government (expires from December 05, 2020):
- The declaration of licensing fees is done once when the fee payers newly start their business activities no later than the last day of the month of commencement of business operation;
- Where the fee payers newly establish their business facilities but not yet come into operation, they have to make a declaration of licensing fees within 30 days from the date of issue of certificate of business registration or certificate of investment registration and certificate of tax registration.
Thus, from December 05, 2020, licensing fee payers shall submit the declaration by January 30 of the year preceding the establishment or inauguration year instead of by the last day of the month of commencement of business operation as currently prescribed.
4. Continue to submit licensing fee declaration dossiers at the tax offices directly managing them
According to Article 11 of the Decree No. 126/2020/NĐ-CP of Vietnam’s Government, licensing fee payers shall submit licensing fee declaration dossiers at the tax offices directly managing them.
In case there are many production and business activities; For production and business activities in many areas, the declaration dossiers shall be submitted at the tax office of the locality where the dependent unit is located, the business location is different from the province or city where the head office is located.
It can be seen that this is a legacy regulation specified in Clause 3 Article 5 of Decree No. 139/2016/NĐ-CP, keeping the location of filing declarations for licensing fee payers.
5. Remaining the deadline for paying licensing fees
According to Article 18 of the Decree No. 126/2020/NĐ-CP of Vietnam’s Government, deadlines for payment of licensing fees are as follows:
- Licensing fee shall be paid annually by the 30th of January.
- For medium and small enterprises converted from household businesses (including their dependent units and business locations), upon expiration of the licensing fee exemption period (3 years from the establishment date):
+ If the expiration date is in the first 6 months of the year, the licensing fee shall be paid by the 30th of July of the same year.
+ If the expiration date is in the last 6 months of the year, the licensing fee shall be paid by the 30th of January of the succeeding year.
- Household businesses and individual businesses that shut down and subsequently resume their business operation shall pay licensing fee as follows:
+ If the resumption date is in the first 6 months of the year, the licensing fee shall be paid by the 30th of July of the same year.
+ If the resumption date is in the last 6 months of the year, licensing fee shall be paid by the 30th of January of the succeeding year.
This regulation inherits the provisions of Clause 4 Article 5 of Decree No. 139/2016/NĐ-CP, remaining the current deadline for subject fee payment.
Thus, from December 05, 2020, when Decree No. 126/2020/NĐ-CP of Vietnam’s Government takes effect, the regulations on submission of declaration dossiers and payment of licensing fees will be uniformly applied in accordance with this Decree, concurrently, the provisions in Article 5 of Decree No. 139/2016/NĐ-CP will expire.
Le Vy
- Key word:
- Decree No. 126/2020/NĐ-CP
