1. Concept

License tax (or license fee) is a type of direct tax collected annually by individuals, business households, organizations producing and trading in goods and services on the basis of investment capital or charter capital and revenue to the direct tax administration agency.

2. Subjects subject to license tax (fee)

Pursuant to Article 2 of Decree No. 139/2016/ND-CP and Article 1 of Circular No. 65/2020/TT-BTC, license fee payers are organizations, individuals, groups of individuals, and households engaged in the production and trading of goods and services, specifically the following subjects (Except for cases of license fee exemption specified in Article 3 of Decree No. 139/2016/ND-CP and Clause 1 of Article 1 Decree No. 22/2020/ND-CP amending and supplementing a number of articles of Decree No. 139)

• Enterprises established in accordance with the provisions of law
• The organization is established under the Law on Cooperatives.
• Non-business units are established in accordance with law.
• Economic organizations 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 organizations specified in Clauses 1, 2, 3, 4 and 5 of this Article (if any).
• Individuals, groups of individuals and households engaged in production and business activities

3. License tax (fee) payment rate

Charge rates for organizations engaged in production and trading of goods and services

STT	COLLECTION BASES	RATES
1	Organizations with charter capital or investment capital of over VND 10 billion	03 million VND/year
2	Organizations with charter capital or investment capital of VND 10 billion or less	02 million VND/year
3	Branches, representative offices, business locations, non-business units, other economic organizations	01 million VND/year

– The license fee rate shall be based on the charter capital inscribed in the business registration certificate or in the enterprise registration certificate or the cooperative charter. In case there is no charter capital, the investment capital stated in the investment registration certificate or the investment policy decision shall be based.

• If an organization changes its charter capital or investment capital, the basis for determining the license fee collection rate is the charter capital or investment capital of the year preceding the license fee calculation year.
• If the charter capital or investment capital is inscribed in the business registration certificate or investment registration certificate in a foreign currency, it shall be converted into Vietnam dong as a basis for determining the license fee rate according to the purchase rate of the commercial bank. credit institution where the license fee payer opens the account at the time the license fee payer pays money into the state budget.

License fee rates for individuals and households

STT	TURNOVER	PAYMENT RATE
1	Have a turnover of over 500 million VND/year	1,000,000 VND/year
2	Have a turnover of over 300 to 500 million VND/year	500,000 VND/year
3	Have a turnover of over 100 to 300 million VND/year	300.0 units/year

4. Deadline for payment of license tax

Deadline for submission of license tax and fee returns

• It is necessary to submit the license fee declaration dossier (license fee declaration) once (01) time when the fee payer is new to production and business activities; newly established enterprises; or establishing additional dependent units or business locations; submitted before January 30 of the year following the year of establishment of How to start production and business. In case there is a change in capital in the year, the license fee payer shall submit an additional license fee declaration dossier no later than January 30 of the year following the year in which the change occurs.
• Households, individuals and groups of individuals paying tax by the presumption method are not required to declare license fees. The tax authority shall base itself on the tax declaration and the tax branch database to determine the collection fee as a basis for calculating the payable license fee amount and notify the license fee payer.

Deadline for payment of license fees

Object	Case	Deadline for paying license fees 2024
Business enterprises/ branches, representative offices	Established from 2022 onwards	No later than 30/01/2024
	Founded in 2023	License fee waiver
Small and medium-sized enterprises transferred from business households (according to the provisions of Article 16 of the Law on Support for Small and Medium Enterprises)	Within the period of exemption from license fee: 03 years from the date of first business registration	License fee waiver
	At the end of the license fee exemption period (the fourth year from the year of establishment of the enterprise) during the first 6 months of the year	No later than July 30 of the year of the end of the exemption period
	At the end of the license fee exemption period (the fourth year from the year of establishment of the enterprise) within the last 6 months of the year	No later than January 30 of the year following the end of the exemption period
Business households/individuals	Start of business in 2023	License fee waiver
	Terminated business activities and then resumed operations within the first 6 months of the year	No later than July 30 of the year of operation
	That milk business has been terminated and resumed in the last 6 months of the year	No later than January 30 of the year preceding the year of operation.

5. Penalties for late submission of declarations or failure to pay license tax

Penalties for submitting license fee tax declaration dossiers

Form	Fines	Violations
Warn	–	Submission of tax declaration dossiers 01-05 days behind schedule and extenuating circumstances
Fines	From 02-05 million VND	Submit tax declaration dossiers from 01-30 days overdue, except for the above warning.
	From 05-08 million VND	Submit tax declaration dossiers 31-60 days overdue.
	From 08-15 million VND	– Submit tax declaration dossiers 61-90 days late. – Submit tax declaration dossiers 91 days or more after the deadline but do not incur payable tax amounts. – Failing to submit tax declaration dossiers but not incurring payable tax amounts.
	From 15-25 million VND	Submitting tax declaration dossiers more than 90 days after the deadline for submission of tax declaration dossiers, the payable tax amount has arisen and the taxpayer has fully paid the tax amount and late payment interest into the state budget before the time the tax authority announces the tax examination decision. tax inspection or before the tax authority makes a record of the act of late submission of tax declaration dossiers. Note: In case the fine amount applied under this Clause is greater than the tax amount incurred on the tax declaration dossier, the maximum fine amount for this case is equal to the tax amount to be paid on the tax declaration dossier but not less than VND 11.5 million.

Penalties for non-payment of license fees

Enterprises determine the fine amount for late payment of license fees based on the late payment tax amount, the number of days of late payment and the late payment interest according to the formula:

Fine amount for late payment of license fee

=

Late payment tax amount

x

0.003%

x

Number of late payment days

 

The above is the content of KALF’s consultation on License Fees and related issues. All of our above advice is based on applicable legal regulations. If you have any questions or requests about legal issues, please contact us for timely answers.