LATEST LEGAL REGULATIONS ON LICENSE FEE IN 2022

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License fee is an amount that any business entity must pay when conducting business activities. So what is license fee? How much is the license fee? If there is a violation of license fee, how are the penalties? Find out with OTIS LAWYERS in the sharing post below!

Legal grounds

Decree 139/2016/ND-CP dated October 04, 2016 of Government stipulating license fees

Decree 126/2020 ND-CP dated October 19, 2020 of Government stipulating in detail a number of articles of the Law on Tax Administration

Decree 125/2020/ND-CP dated October 19, 2020 of Government stipulating penalties for administrative violations on taxes and invoices

WHAT IS LICENSE FEE?

License fee (formerly known as license tax). License tax, also known as license fee, is one of the taxes and other state budget revenues declared annually.

LICENSE FEE PAYERS

According to the provisions of Article 2 of Decree 139/2016/ND-CP, the payers are organizations, individuals, groups of individuals and households engaged in production and business of goods and services, including:

Enterprises established in accordance with the law.
The organization is established under the Cooperative law.
Non-business units established in accordance with the law.
Economic organization 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 the above organizations (if any).
Individuals, groups of individuals, households engaged in production and business activities.

IN WHICH CASES IS LICENSE FEE EXEMPTED?

Cases that license fee is exempted, including:

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 engaged in non-regular business and production activities; there is no fixed place according to the guidance of the Ministry of Finance.
Individuals, groups of individuals and households producing salt.
The organizations, individuals, groups of individual and households that do the aquaculture, fisheries and fishing logistic services.
Commune cultural post office; press agencies (print press, audio press, video press, electronic press).
Branches, representative offices and business locations of cooperatives provide technical services directly serving agricultural production.
The communal people’s credit fund; cooperatives specialized in service business for agricultural production; branches, representative offices and business locations of cooperatives and private enterprises carrying on their business in the mountainous areas which are determined by the regulations of the Committee for Ethnic Minorities.

LICENSE FEE RATE

License fee rate for organizations engaged in production and business of goods and services

Subject	Rate
Organizations with charter capital or investment capital over 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, non-business units, other economic organizations	1,000,000 VND/year

The rate of license fee for organizations is based on the charter capital stated in the business registration certificate; if there is no charter capital, the investment capital stated in the investment registration certificate shall be based on.

License fees for individuals and households engaged in production and business of goods and services

Subject	Rate
Individuals, groups of individuals, households with a turnover of over 500 million VND/year	1.000,000 VND/year.
Individuals, groups of individuals, households with a turnover of over 300 to 500 million VND/year	500.000 đồng/năm 500,000 VND/year.
Individuals, groups of individuals, households with a turnover of over 100 to 300 million VND/year	300.000 đồng/năm. 300,000 VND/year.

The revenue used as a basis for determining the license fee rate for individuals, groups of individuals and households is calculated as follows: total revenue for calculation of personal income tax in accordance with the law on personal income tax.

If an individual, group of individuals or household changes in revenue, the basis for determining the license fee rate is the taxable revenue of the personal income of the year preceding the year in which the license fee is calculated.
For individuals, groups of individuals and households that have just started doing business in the year, the revenue rate used as the basis for determining the license rate is the revenue of the tax year according to the provisions of the law on personal income tax.

Some other cases

Small and medium-sized enterprises converted from business households (including branches, representative offices, business locations) when the license fee exemption period expires (the fourth year from the year of business establishment): in cases the ending within the first 6 months of the year, pay the annual license fee; in the case ending in the last 6 months of the year, 50% of the annual license fee shall be paid.
Dissolved households, individuals, groups of production and business individuals that resume production and business activities during the first 6 months of the year shall pay the license fee for the whole year, 50% of the license fee for the last 6 months of the year
The active fee payer sends a written notice to the tax authority directly managing the suspension of production and business activities in the calendar year without having to pay the license in the year of business suspension with the following conditions: draft a document of suspending production and business activities and send it to the tax authority before the prescribed fee payment deadline (January 30 of each year) and have not paid the license fee of the year of application for suspension of production and business activities.
In case of temporary suspension of production and business activities, if the above conditions are not satisfied, the license fee rate for the whole year shall be paid.

DEADLINE FOR SUBMISSION OF RETURNS AND LICENSE FEE PAYMENT

Deadline for payment of license fee

The deadline for paying license tax is January 30 of each year. In case the fee payer has just started production and business activities or has just run a production and business establishment, the deadline for submitting the license fee is the same with the one for submitting the fee return dossier.

Deadline for submission of license fee return

Clause 1, Article 10 of Decree 126/2020/ND-CP stipulates as follows:

License fee applicants (except business households and business individuals) newly established (including small and medium-sized enterprises converted from household businesses) or have established additional dependent units, business locations or started Business and production activities shall submit license fee return dossiers no later than January 30 of the year following the one of establishment start of production and business activities. If there is a change in capital during the year, the applicant shall submit the license fee return dossier no later than January 30 of the year following the one in which the change information arises.
Business households and individuals are not required to submit license fee return dossier. Tax authorities shall base on tax return dossiers and tax administration databases to determine revenue as a basis for calculating the payable license fee amount and notify the payers.

PENALTIES FOR LATE SUBMISSION OF RETURNS, FAILURE TO PAY

quy-dinh-phap-luat-ve-le-phi-mon-bai (1).jpg — How are business entities penalized for late payment or failure to pay license fees?

Fines rate

Article 13 of Decree 125/2020/ND-CP stipulates the following fine rate:

Violation	Form	Penalty rate
Submitting tax returns within 01 - 05 days and there are extenuating circumstances	Warning
Submitting tax returns within 01 - 30 days, except for the above warning.	Monetary fine	From 02 - 05 million VND
Submit tax returns overdue from 31 to 60 days.		From 05 - 08 million VND
Submitting tax returns overdue from 61 - 90 days. - Submit tax returns overdue for 91 days or more. But there is no tax payable. - Tax returns are not submitted but no payable tax - Failing to submit the appendices according to regulations on tax administration for enterprises having associated transactions and the finalization dossier of corporate income tax.		From 08 - 15 million VND
Submitting a tax return over 90 days after the deadline, a payable tax amount has arisen and the taxpayer has fully paid the tax and late payment interest to the state budget before the time the tax authority announces the decision on tax inspection or before the time the authority makes a record of late submission of tax return dossiers. Note: In case the fine amount applied under this clause is larger than the one of tax incurred on the tax return, the maximum fine in this case is equal to the amount of payable tax on the return tax but not low 11.5 million VND.		From 15 - 25 million VND

Remedial measures

Forcing to pay the full amount of late payment to the state budget in case taxpayers are late in submitting tax returns, leading to late payment of tax.
Forcing to submit tax return dossiers and appendices attached to tax return dossiers for the following 02 acts:

+ Failing to submit tax return dossiers but no payable tax amounts;

+ Failing to submit appendices according to regulations on tax administration for enterprises having associated transactions and the finalization dossier of enterprise income tax.

Above is our consultation on license fee according to current law. We hope that this will be a useful reference for readers when they want to learn about the provisions of the tax law.

Tax & Accounting consulting service of OTIS LAWYERS

The above is the advice of OTIS LAWYERS on License fee under the law. If you have any questions, please contact OTIS LAWYERS immediately for advice and support.

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