License tax is simply understood as the annual tax payable by the business based on the charter capital recorded on the business license. The regulations on license tax are quite numerous and clear, however, not all businesses know well about tax levels, payment time and regulations on penalties for excise tax.
- Legal grounds
- Decree 126/2020/ND-CP detailing a number of articles of the tax administration law;
- Decree 139/2016/ND-CP regulating license fees;
- Decree 22/2020/ND-CP amending and supplementing a number of articles of Decree No. 139/2016/ND-CP;
- Circular 302/2016/TT-BTC guiding license fees;
- Circular 65/2020/TT-BTC amending and supplementing a number of articles of Circular No. 302/2016/TT-BTC.
2. Subjects paying license fees
License fee payers are organizations, individuals, groups of individuals and households engaged in production and trading of goods and services, including:
- Enterprises are established in accordance with the law.
- The organization was established under the Law on Cooperatives.
- Non-business units established in accordance with law.
- Economic organization of political organizations, socio-political organizations, social organizations, socio-professional organizations, people’s armed forces units.
- Other organizations engaged in production and business activities.
- Branches, representative offices and business locations of the above organizations (if any).
- Individuals, groups of individuals and households engaged in production and business activities.
3. License fee payment rate in 2022
a. License fee payment rate for organizations
Based on the charter capital stated in the business registration certificate or the enterprise registration certificate or the cooperative’s charter or the investment capital stated in the investment registration certificate or decision document. Under the investment policy, organizations engaged in production and trading of goods and services shall pay license fees as follows:
- Tổ chức có vốn điều lệ hoặc vốn đầu tư trên 10 tỷ đồng: 03 million VND/year
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Organizations with charter capital or investment capital of 10 billion VND or less: 02 million VND/year
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Branches, representative offices, business locations, units career, other economic organization: 01 million VND/year
If the above-mentioned organizations change their charter capital or investment capital, the basis for determining license fee collection is the charter capital or investment capital of the year preceding the year in which the license fee is calculated.
b. License fee payment for individuals and business households
Based on the total revenue, the license fee payment rate for individuals, groups of individuals and households engaged in production and trading of goods and services is as follows:
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Revenue over 100 million VND/year: 300,000 VND/year
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Revenue over 300 million to 500 million VND/year: 500,000 VND/year
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Over 500 million VND/year: 01 million VND/year
c. Revenue used as a basis for determining license fee rates for individuals, groups of individuals, households, and new business locations of business households are as follows:
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For individuals, groups of individuals, households (except individuals leasing properties) is the tax-inclusive revenue (in the case of taxable) of all sales, processing fees, commissions, money for service provision arising in the tax period from the production and trading of goods and services. In case business individuals cannot determine flat taxable revenue or determine that it is not realistic, the tax authority is competent to determine flat taxable revenue according to the provisions of the law on tax administration.
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For individuals engaged in property leasing activities, it is the personal income taxable revenue of property lease contracts of the tax year. In case an individual enters into many property lease contracts at a location, the revenue used as a basis for determining the license fee rate for that location is the total revenue from the property lease contracts of the year. tax. In case an individual leases properties at multiple locations, the revenue used as a basis for determining the license fee rate for each location is the total revenue from the property lease contracts of the locations of the company. tax year, including where there are multiple leases in one location.
4. Submit license fee declaration
License fee payers (except for business households and business individuals) newly established (including small and medium-sized enterprises transferred from business households) or have established additional dependent units, business locations or commencing production and business activities shall submit license fee declaration dossiers no later than January 30 of the year following the year of establishment or commencement of production and business activities.
If there is a change in capital during the year, the license fee payer shall submit the license fee declaration dossier no later than January 30 of the year following the year in which the change information arises.
5. Deadline for annual license fee payment
According to Clause 9, Article 18 of Decree 126/2020/ND-CP, the deadline for paying license fees is January 30 every year.
For small and medium enterprises converted from business households (including dependent units, business locations of the enterprise) at the end of the license fee exemption period (fourth year from the year of establishment). enterprises), the deadline for paying license fees is as follows:
- In case the license fee exemption period ends within the first 6 months of the year, the deadline for paying the license fee is July 30 of the year in which the exemption period ends.
- In case the license fee exemption period ends within the last 6 months of the year, the deadline for paying the license fee is January 30 of the year next to the year in which the exemption period ends.
Business households and individuals that have terminated production and business activities and then resumed operations, the time limit for paying license fees is as follows:
- In case of going out of operation in the first 6 months of the year: No later than July 30 of the year of operation.
- In case of going into operation during the last 6 months of the year: No later than January 30 of the year preceding the year of commencement of operation.
6. Exemption of license fees for newly established businesses and individual business households in 2022
Cases that are exempt from license fees include:
- Individuals, groups of individuals, households engaged in production and business activities with annual revenue of 100 million VND or less.
- Individuals, groups of individuals and households engaged in irregular production and business activities; There is no fixed location.
- Individuals, groups of individuals and households producing salt.
- Organizations, individuals, groups of individuals, households farming, fishing, seafood and fishery logistics services.
- Commune cultural post office; press agencies (print press, audio press, video press, electronic press).
- Cooperatives and unions of cooperatives (including branches, representative offices, business locations) operating in the agricultural sector in accordance with the law on agricultural cooperatives.
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People’s Credit Fund; branches, representative offices, business locations of cooperatives, unions of cooperatives and private enterprises doing business in mountainous areas. Mountainous areas are determined according to regulations of the Committee for Ethnic Minorities.
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Newly established organization (granted a new tax code, new enterprise code); Households, individuals, groups of individuals that start production and business activities for the first time are exempt from license fees in the first year of establishment or start production and business activities (from January 1 to January 31). twelfth).
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Public general education institutions and public preschool educational institutions.
7. Some notes on license tax
- Small and medium-sized enterprises moving from household businesses (as prescribed in Article 16 of the Law on Supporting Small and Medium Enterprises) are exempt from license fees for a period of 03 years from the date of issuance of the first business registration certificate head.
- During the license fee exemption period, when an organization, household, individual or group of individuals establishes a branch, representative office or business location, the branch, representative office or business location may license fee exemption during the period when organizations, households, individuals, groups of individuals are exempt from license fees.
- Organizations, branches, representative offices, business locations (in case license fees are not exempted in the first year of establishment or production and business activities) are established and are granted tax registration. and tax code, enterprise identification number during the first 6 months of the year, the license fee for the whole year shall be paid; if established and granted tax registration and tax identification number and enterprise identification number within the last 6 months of the year, 50% of the annual license fee shall be paid.
