Cases of license fee exemption according to the law

How are the procedures for paying license fees regulated and how much is the specific fee? And in what cases are license fees exempted? 

1. In what cases are license fees exempted?

According to Article 3 of Decree 139/2016/ND-CP (amended and supplemented by Point c, Clause 1, Article 1 of Decree 22/2020/ND-CP) on license fee exemption, in which:

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

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

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

– During the license fee exemption period, organizations and households If a family, individual, or group of individuals establishes a branch, representative office, or business location, the branch, representative office, or business location will be exempt from license fees during the organization period. Households, individuals, and groups of individuals will be exempt from license fees.

Based on the above regulations, your company is a newly established organization in early 2022 and will be exempt from license fees in the first year of establishment. 2022.

2. How much is the license fee?

According to Clause 1, Article 4 of Circular 302/2016/TT-BTC, instructions on license fee rates are as follows:

“Article 4. License fee rates

1. License fee rates for organizations engaged in manufacturing and trading of goods goods and services as follows:

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

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

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

The license fee collection rate for organizations guided in this Clause is based on the charter capital recorded in the business registration certificate or recorded in the business registration certificate or recorded in the cooperative charter. In case there is no charter capital, it is based on the investment capital stated in the investment registration certificate or written decision on investment policy.

If the organization mentioned in Points a and b of this Clause 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 of license fee calculation.

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 level 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 the money into the state budget.

Therefore, depending on the charter capital recorded in the business registration certificate or recorded in the business registration certificate, the level of license fee to be paid will change, specifically:

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

– charter capital/investment capital over 10 billion VND: 3,000,000 VND/year.

3. What are the procedures for declaring and paying license fees?

Article 5 of Circular 302/2016/TT-BTC (amended by Clause 5, Article 1 of Circular 65/2020/TT-BTC) on declaration and payment of license fees, specifically as follows:

“Article 5. Declaration and payment of license fees

The declaration and payment of license fees is carried out in accordance with the provisions of Decree No. 139/2016/ND-CP dated October 4, 2016 of the Government regulating license fees, Decree No. 22/2020/ND-CP dated February 24, 2020 of the Government amending and supplementing a number of articles of Decree No. 139/2016/ND-CP dated February 24, 2020. October 4, 2016 of the Government regulations on license fees and laws on tax administration.”

Accordingly, the declaration and payment of license fees is carried out according to the provisions of Article 5 of Decree 139/2016/ND-CP (amended and supplemented by Clause 4, Article 1 of Decree 22/2020/ND-CP) as follows:

– License fee declaration is done as follows:

+ Declare the license fee once when the fee payer has just started doing business, no later than the last day of the month of starting production and business activities;

+ In case the fee payer has just established a business establishment but has not yet started production and business activities, the license fee must be declared within 30 days from the date of issuance of the business registration certificate or the date of issuance of the registration certificate. Sign up for investment and tax registration.

– The deadline for paying license fees is January 30 every year at the latest.

+ Small and medium-sized enterprises converted 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 enterprise) pay the license fee as follows: In case of ending the license fee exemption period (the fourth year from the year of establishment of the enterprise), pay the license fee as follows: During the license fee exemption period during the first 6 months of the year, the license fee payment deadline is July 30 of the year the exemption period ends; In case the license fee exemption period ends during the last 6 months of the year, the deadline to pay the license fee is January 30 of the year immediately preceding the year ending the exemption period.

+ Households, individuals, groups of individuals whose production and business have been dissolved, go back to production and business activities and return to pay the license fee as follows: In case of resuming operations in the first 6 months of the year, the deadline for paying the license fee is posts no later than July 30 of the year of launch; In case of operation during the last 6 months of the year, the deadline for payment of license fees is January 30 of the year immediately preceding the year of operation.

– License fees collected must be paid 100% to the state budget according to the provisions of law.