Latest regulations on cases of exemption from licensing fees in Vietnam

Latest regulations on cases of exemption from licensing fees in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Latest regulations on cases of exemption from licensing fees in Vietnam

Cases of exemption from licensing fees under Article 3 of Decree 139/2016/ND-CP (amended in Decree 22/2020/ND-CP) are as follows:

(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:

- 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.

(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.

- 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 Decree 139/2016/ND-CP takes legal effect shall be exempted from the license fee for the period commencing from the effective date of Decree 139/2016/ND-CP 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.

(10) Public general education schools and public pre-schools

2. Rate of licensing fees in Vietnam

Rate of licensing fees according to Article 4 of Decree 139/2016/ND-CP (amended in Decree 22/2020/ND-CP) is as follows:

- The rate of licensing fees for the organizations having the production and business of goods and services is as follows:

+ The organizations with charter capital and investment capital over 10 billion dong: 3,000,000 dong/year;

+ The organizations with charter capital and investment capital of less than 10 billion dong: 2,000,000 dong/year;

+ The branches, representative offices, business location, public service providers and other business organizations: 1,000,000 dong/year;

The rate of licensing fees for the organizations specified under Point a and b of Article 4 Decree 139/2016/ND-CP is based on the charter capital written in the certificate of business registration or on the investment capital written in the certificate of investment registration in case of no charter capital.

- The rate of licensing fees for the individuals and households having the production and business of goods and services is as follows:

+ The individuals, groups of individuals and households with revenues over 500 million dong/year: 1,000,000 dong/year;

+ The individuals, groups of individuals and households with revenues between 300 and 500 million dong/year: 500,000 dong/year;

+ The individuals, groups of individuals and households with revenues between 100 and 300 million dong/year: 300,000 dong/year;

+ Revenues used as the basis for determining the license fees payable by individuals, groups of individuals and household businesses shall be determined according to guidance given by the Ministry of Finance

- Upon the end of the period of exemption from the license fee (from the fourth year from the date of establishment):

A SME transformed from a household business (including its branches, representative offices and/or business locations) shall pay the license fee for the whole year if its exemption period ends in the first 6 months of the year or pay 50% of the license fee payable for the whole year if its exemption period ends in the last 6 months of the year.

A household business, an individual or a group of individuals engaging in production/business that resumes its production/business after a suspension period shall pay the license fee for the whole year if it resumes its production/business in the first 6 months of the year or pay 50% of the license fee payable for the whole year if it resumes its production/business in the last 6 months of the year.

- If the organizations specified under the Points a and b, Paragraph 1 of Article 4 of Decree 139/2016/ND-CP change their charter capital or investment capital, the ground for determining the rate 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 rate of licensing fees in accord 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.

-  An operating payer of the license fee that has notified its supervisory tax authority in writing of its suspension of production/business in a calendar year must not pay the license fee for that year of production/business suspension if it has sent a written notification of production/business suspension to its supervisory tax authority before the prescribed deadline for paying the license fee (January 30 annually) and has made no payment of the license fee for the planned year of suspension.

It must pay the license fee for the whole year if it does not meet the abovementioned conditions for production/business suspension

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE