License fee is the amount of money that business organizations, households, and individuals must pay annually. What is the licensing fee? Cases of licensing fee exemption in Vietnam.
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What is the licensing fee? Cases of licensing fee exemption in Vietnam 2022
1. What is the licensing fee?
Currently, the law does not have specific regulations on what is a licensing tax or licensing fee. However, a licensing tax or licensingt fee can be understood as a fixed amount which business organizations, households, and individuals must pay annually when they are provided public services by state agencies to fulfill state management tasks; it is one of the other revenues belonging to the state budget collected by tax authorities.
2. 10 Cases of licensing fee exemption in Vietnam
According to Decree 139/2016/ND-CP and Decree 22/2020/ND-CP, there are 10 cases of licensing fee exemption (formerly known as licensing tax) including:
- The individuals, groups of individual and households that have their trade/production activities with annual revenues of less than 100 million dong.
- The individuals, groups of individual and households that have their irregular trade/production activities without fixed location as guided by the Ministry of Finance of Vietnam.
+ Irregular business is determined depending on the characteristics of production and business activities of each field or industry.
+ Fixed business location means the place where the individual’s business operation is carried out such as: transaction location, store, factory, warehouse, depot or a similar location (Article 6 Circular 40/2021/TT-BTC)
- The individuals, groups of individual and households that produce salt.
- The organizations, individuals, groups of individual and households that do the aquaculture, fisheries and fishing logistic services.
- The commune cultural post offices and press agencies (printed, radio, television and online newspapers).
- The branches, representative offices and business locations of the cooperatives that have direct technical service activities in service of agriculture.
- The communal people’s credit fund; cooperatives specialized in service business for agricultural production; branches, representative offices and business locations of cooperatives and private enterprises carrying on their business in the mountainous areas which are determined by the regulations of the Committee for Ethnic Minorities of Vietnam.
- 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:
+ New organizations (issued with new TINs/enterprise ID numbers).
+ Household businesses, individuals or groups of individuals engaging in production/business.
+ 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.
- 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.
- 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.
- 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.
- 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.
- Public general education schools and public pre-schools
Nhu Mai
