Who are the subjects? must pay license tax?

1. What is license tax?

Currently, the law does not have a concept or explanation of what license tax is. But based on Decree 139/2016/ND-CP, we can understand license tax as follows:

License tax, also known as license fee, is a tax that organizations, individuals, and households engaged in producing and trading goods and services must pay annually based on their charter capital, investment capital or revenue (in some other cases, there is a fixed fee that does not depend on the above three).

2. Who must pay license tax?

Pursuant to Article 2 of Decree 139/2016/ND-CP stipulating license fee payers as follows:

License fee payers are organizations and individuals engaged in production and trading of goods and services, except for the cases specified in Article 3 of this Decree, including including:

– Enterprises established under the provisions of law.

– Organizations established under the Law on Cooperatives.

– Public service units established under the provisions of law.

– Economic organizations of political organizations, socio-political organizations, social organizations, social organizations – occupations, 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, households engaged in production and business activities business.

Thus, if you work as a farmer, you do not need to pay license tax.

3. How much license tax must be paid?

According to Article 4 of Decree 139/2016/ND-CP stipulates the license fee collection rate as follows:

– License fee collection rate for organizations producing and trading goods and services is as follows:

+ Organizations with charter capital or investment capital above 10 billion VND: 3,000,000 VND/year;

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

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

The license fee 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.

– License fee rates for individuals and households engaged in producing and trading goods and services are as follows:

+ Individuals, groups of individuals, households with revenue over 500 million VND/year: 1,000,000 VND/year;

+ Individuals, groups of individuals, households with revenue over 300 to 500 million VND/year: 500,000 VND/year;

+ Individuals, groups of individuals, households with revenue over 100 to 300 million VND/year: 300,000 VND/year.

– Organizations, individuals, groups of individuals, households that produce, do business, or are newly established, are granted tax registration, tax codes, and business codes during the first 6 months of the year must pay the license fee for the whole year; If established and granted tax registration and tax code, business code during the last 6 months of the year, pay 50% of the license fee for the whole year.

Organizations, individuals, groups of individuals, households that produce and do business but do not declare the license fee must pay the license fee for the whole year, regardless of whether the discovery is in the first 6 months of the year or the last 6 months. year.

– 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 preceding the year in which the license fee is calculated.

In case the charter capital or investment capital is recorded in the business registration certificate or investment registration certificate in foreign currency, then convert it to Vietnamese Dong as a basis for determining the license fee 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 pays money into the state budget.

– If an individual, group of individuals, or household specified in Clause 2 of this Article changes their revenue, the basis for determining the license fee rate is the revenue of the year immediately preceding the year in which the license fee is calculated. post.

So, assuming your younger brother opens a company and has a charter capital of 10 billion VND, he/she must pay 3 million VND annually.