In what cases is this allowed? License fee exemption?

How is the license fee collected?

Pursuant to Article 4 of Decree 139/2016/ND-CP stipulates as follows:

“Article 4. License fee collection rate

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/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 stated in the investment registration certificate.

2. License fee rates for individuals and households engaged in production and trading of goods and services are as follows:

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

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

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

d) Revenue as a basis for determining license fee rates for individuals, groups of individuals, and households according to the guidance of the Ministry of Finance. (added by Point a, Clause 2, Article 1 of Decree 22/2020/ND-CP).

3. Small and medium-sized enterprises converting from business households (including branches, representative offices, business locations) at the end of the license fee exemption period (the fourth year from the year of establishment of the business): in cases ending in the first 6 months of the year, pay the license fee for the whole year, in cases ending in the last 6 months of the year, pay 50% of the license fee for the whole year.

Households, individuals, and groups of individuals whose production and business have been dissolved and resume production and business activities during the first 6 months of the year pay the license fee for the whole year, and during the last 6 months of the year pay 50% of the license fee for the whole year. (amended by point b, clause 2, Article 1 of Decree 22/2020/ND-CP)

What cases are exempt from license fees?

Pursuant to Article 3 of Decree 139/2016/ND-CP supplemented by Point c Clause 1 Article 1 Decree 22/2020/ND-CP stipulates license fee exemption as follows:

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 with irregular production and business activities; There is no fixed location according to instructions from the Ministry of Finance.

– Individuals, groups of individuals, and households producing salt.

– Organizations, individuals, groups of individuals, households farming, fishing, seafood and fisheries logistics services.

– Commune cultural post office; Press agencies (print press, audio press, visual press, electronic press).

– Cooperatives and unions of cooperatives (including branches, representative offices, and business locations) operating in the agricultural sector according to the provisions of the law on agricultural cooperatives (amended by point a, clause 1, Article 1 of Decree 22/2020/ND-CP)

– People’s Credit Fund; branches, representative offices, business locations of cooperatives, cooperative unions and private enterprises doing business in mountainous areas. Mountainous areas are determined according to the regulations of the Committee for Ethnic Minorities. (amended by point b, clause 1, Article 1 of Decree 22/2020/ND-CP).

– Exemption from license fees in the first year of establishment or production and business activities (from January 1 to December 31) for:

+ Newly established organization (issued with new tax code, new business code).

+ Households, individuals, groups of individuals launching production and business activities for the first time.

+ During the license fee exemption period, organizations, households, individuals, groups of individuals that establish branches, representative offices, or business locations are exempt from license fees.

– Small and medium-sized enterprises converting from business households (according to the provisions of Article 16 of the Law on Support for Small and Medium-sized Enterprises) are exempted from license fees for a period of 03 years from the date of issuance of the first business registration certificate.

+ During the license fee exemption period, small and medium-sized enterprises that establish branches, representative offices, or business locations are exempt from license fees.

+ Branches, representative offices, and business locations of small and medium-sized enterprises (subject to license fee exemption according to the provisions of Article 16 of the Law on Support for Small and Medium Enterprises) established before the effective date of this Decree, the license fee exemption period of the branch, representative office, and business location is calculated from the effective date of this Decree until the end of the time the small and medium-sized enterprise is exempt from license fees.

+ Small and medium-sized enterprises converted from business households before the effective date of this Decree shall be exempted from license fees according to the provisions of Article 16 and Article 35 of the Law on Support for Small and Medium Enterprises.

– Public general education establishments and public preschool education establishments

The company was established in December 2021, so will I have to pay license fees in 2022?

Pursuant to the provisions of Point c, Clause 1, Article 1 of Decree 22/2020/ND-CP, adding Clauses 8 and 9 to Article 3 of Decree 139/2016/ND-CP, regulations on license fee exemption are as follows:

“1. Article 3 is amended and supplemented as follows:

[…]

c) Clauses 8, 9 and 10 of Article 3 are added as follows:

“8. Exemption from license fees in the first year of establishment or launching production and business activities (from January 1 to December 31) for:

a) Newly established organizations (issued with new tax codes, new business codes).

b) Households, individuals, groups of individuals launching production and business activities for the first time business.

c) During the license fee exemption period, organizations, households, individuals, groups of individuals that establish branches, representative offices, or business locations are exempt from license fees.

[…]”

Accordingly, for newly established businesses (except for small and medium-sized enterprises), license fees are exempted in the first year of establishment. The first year of this exemption is calculated from January 1 to December 31 of the year of establishment.

Therefore, in the case you discussed, the company was established in December 2021, in 2021 the business will be exempt from license fees in 2021 (from January 1, 2021 to December 31, 2021), in 2022 it will not be exempt from license fees.