The most accurate way to call it is license fee or license tax? Does an enterprise have to submit a license fee declaration as soon as there is a change in charter capital?

What is the most accurate way to call it license fee or license tax?

Currently, according to Article 8 of Decree 126/2020/ND-CP, license fees are taxes and other revenues belonging to the state budget declared annually.

Previously, license fees were called license tax according to the 1983 Industrial and Commercial Tax Ordinance. At that time, license tax was understood as a business tax that must be paid by organizations and individuals doing regular business or trading each shipment.

However, from July 1, 2017, the name license tax was changed to license fee when the 2015 Law on Fees and Charges took effect.

Do businesses have to submit license fee declaration documents as soon as there is a change in charter capital?

Pursuant to Article 10 of Decree 126/2020/ND-CP stipulating the deadline for submitting license fee declaration documents as follows:

The deadline for submitting tax declaration documents of revenues land, license fees, registration fees, licensing fees and other revenues according to the law on management and use of public assets

Taxpayers comply with the regulations on the deadline for submitting tax declarations as prescribed in Article 44 of the Law on Tax Administration. The deadline for submitting declarations of land revenues, license fees, registration fees, rights granting fees and other revenues according to the law on management and use of public assets as prescribed in Clause 5, Article 44 of the Law on Tax Administration is implemented as follows:

1. License fee

a) License fee payers (except business households and individual businesses) who are newly established (including small and medium-sized enterprises transferred from business households) or have established additional dependent units, business locations or start production and business activities must submit license fee declaration documents no later than January 30 of the year following the year of establishment or start of production and business activities. business.

In case there is a change in capital during the year, the license fee payer shall submit the license fee declaration no later than January 30 of the year following the year in which the change occurred.

b) Business households and individual businesses do not have to submit license fee declaration documents. The tax authority bases on tax declaration records and tax management database to determine revenue as a basis for calculating the amount of license fee payable and notifies the person paying the license fee to comply with the provisions of Article 13 of this Decree.

Thus, in case a small and medium-sized enterprise has a change in capital during this time, the enterprise can submit a license fee declaration application within the year.

The latest deadline for businesses to submit applications is January 30 of the year following the year in which the changed information occurs.

How is the license fee collection rate for businesses determined when the enterprise has a change in charter capital?

Pursuant to Article 4 of Decree 139/2016/ND-CP there are regulations on license fee collection rates as follows:

License fee collection rates article

1. License fee rates for organizations producing and trading goods and services are as follows:

a) Organizations with charter capital or investment capital of over 10 billion VND: 3,000,000 VND/year;

b) Organizations with charter capital or investment capital of 10 billion VND or less: 2,000,000 VND VND/year;

c) Branches, representative offices, business locations, public service units, other economic organizations: 1,000,000 VND/year.

The license fee collection rate for organizations specified in Points a and b of this Clause is based on the charter capital recorded in the business registration certificate; In case there is no charter capital, it is based on the investment capital recorded in the investment registration certificate.

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4. If the organization specified in Points a and b, Clause 1 of this Article changes its charter capital or investment capital, the basis for determining the license fee rate is the charter capital or investment capital of the year immediately preceding the year of calculating the license fee.

In case the charter capital or investment capital is recorded in the business registration certificate or investment registration certificate in foreign currency, it shall be converted into Vietnamese Dong as a basis for determining the license fee rate. cards according to the buying rate of the commercial bank or credit institution where the license fee payer opens an account at the time the license fee payer deposits money into the state budget.

Accordingly, registration fee rates for small and medium-sized enterprises are prescribed as follows:

– Enterprises with charter capital or investment capital of over 10 billion VND: 3,000,000 VND/year;

– Enterprises with charter capital or investment capital of 10 billion VND or less: 2,000,000 VND/year.

This license fee is based on the charter capital stated in the business registration certificate. If there is no charter capital, it is based on the investment capital stated in the investment registration certificate.

In case an enterprise changes its charter capital, the basis for determining the license fee rate is the charter capital or investment capital of the year preceding the year of license fee calculation.