Regulations on business license fees in 2017

Posted date 13/12/2016

3.304 view

Posted date 13/12/2016

3.304 view

Vu Thi Mai Nhi - Lecturer, Faculty of Accounting

I. Problem statement

Like other countries in the world, the tax law system in Vietnam is considered an important element in the economic and financial law system. In particular, in the process of innovation and integration with the world economy, the role of the tax system is becoming increasingly clear and clearly demonstrating its function in macro management and regulation of the economy. The State uses tax tools to influence the process of economic restructuring, ensuring financial resources to effectively serve the activities of the State and society. The tax system in Vietnam currently includes 09 taxes, fees and charges. Each tax is issued to meet specific objectives and is suitable for the subjects that the State needs to manage and regulate.
This article will introduce a tax (fee) in the current tax system in Vietnam. Although it is not one of the taxes that accounts for a large proportion of the total revenue of the State Budget. But this tax plays an important role in classifying the scale of business establishments to perform the State's economic management function - Business license tax (fee).

Business license tax (fee) is a direct tax levied on business licenses of enterprises and business households. This tax originated as “industry and trade tax” and was renamed “ business license tax” since 1996. Business license tax is a type of business registration fee to inventory and classify the scale of business establishments. Business license tax is collected once a year at the beginning of the fiscal year.

II. Regulations on business license fees in 2017
On October 4, 2016, the Government issued Decree 139/2016/ND-CP regulating business license fees in 2017 with many changes compared to before.
Decree 139 takes effect from January 1, 2017. Accordingly, Decree No. 75 /2002/ND-CP on adjusting business license tax rates and Article 18 of Decree No. 83/2013/ND-CP cease to be effective.

1. Fee payment level
a. The level of business license fee for organizations engaged in production and trading of goods and services is as follows:

Business tax rate	Registered capital	Annual fee
1	Over 10 billion VND	3,000,000 VND/year
2	From 10 billion or less	2,000,000 VND/year

Decree 39 also clearly states that the business license fee for the above-mentioned organizations is based on the charter capital stated 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.
b. For branches, representative offices, business locations, public service units, and other economic organizations: The fee is VND 1,000,000/year.

c. For individuals and households engaged in production and business of goods and services, the annual fee collection rate is as follows:

Revenue/year	Annual fee
Over 500 million VND	1,000,000 VND/year
Over 300 to 500 million VND	500,000 VND/year
Over 100 to 300 million VND	300.0 ̀ng/year

d. Organizations, individuals, groups of individuals, households engaged in production, business or newly established, are granted tax registration and tax codes, business codes :
- During the first 6 months of the year, pay the annual business license fee;
- During the last 6 months of the year, pay 50% of the annual business license fee.
e. In case of change in charter capital or investment capital, the basis for determining the business license fee collection level is the charter capital or investment capital of the year preceding the year of calculating the business license fee.
f. For individuals, groups of individuals, and households with changes in revenue, the basis for determining the level of business license fees is the revenue of the year immediately preceding the year in which the business license fee is calculated.
2. Cases exempted from fees
- Individuals , groups of individuals, and households engaged in production and business activities with annual revenue of 100 million VND or less .
- Individuals , groups of individuals, and households that conduct irregular production and business activities; do not have a fixed location according to the guidance of the Ministry of Finance.
- Individuals, groups of individuals, households producing salt.
- Organizations, individuals, groups of individuals, households engaged in aquaculture, fishing and seafood logistics services.
- Commune cultural post office; press agencies (printed newspapers, radio, television , electronic newspapers).
- Branches , representative offices, and business locations of cooperatives providing technical services directly serving agricultural production.
- Commune people's credit funds; cooperatives specializing in agricultural production services; branches, representative offices, business locations of cooperatives and private enterprises operating in mountainous areas. Mountainous areas are determined according to regulations of the Committee for Ethnic Minorities.
3. Declare and pay business license fees
a. Declaration of business license fee:
- Declare the business license fee once when the fee payer starts a new 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 or business activities, he/she must declare the business license fee within 30 days from the date of being granted the business registration certificate or the date of being granted the investment registration certificate and tax registration.
b. Business license fee declaration form
- is the Business License Fee Declaration Form according to the form issued with Decree 139/2016/ND-CP (with attached appendix)

c. Location for submitting application for business license fee
- The person paying the business license fee submits the business license fee declaration form to the tax authority directly managing the business license fee.
- In case the fee payer has a dependent unit (branch, representative office, business location) doing business in the same provincial locality, the fee payer shall submit the Business License Fee Declaration Form of those dependent units to the tax authority directly managing the fee payer ;
- In case the fee payer has a dependent unit (branch , representative office, business location) doing business in a different province - level locality than the one where the fee payer has its head office, the dependent unit shall submit the Business License Fee Declaration Form of the dependent unit to the tax authority directly managing the dependent unit.
d. Deadline for paying business license fees
- No later than January 30 of each year.
- In case the fee payer has just started production and business activities or has just established a production and business establishment, the deadline for paying the business license fee is no later than the last day of the deadline for submitting the fee declaration dossier .
III. Conclusion
Enterprises and business households need to determine and pay the correct and full business license fee to the state budget within the time limit prescribed by law. To do so, tax accountants need to clearly understand and grasp the regulations of business license fees (business license fee level to be paid, business license fee payment deadline, payment location, business license fee records, etc.) in a timely manner and apply them appropriately to the characteristics and business operations of their establishments. Only then can the accounting work at the enterprise operate smoothly and avoid possible errors.
REFERENCES
- Decree No. 139/2016/ND-CP dated October 4, 2016

- Decree No. 75 /2002/ND-CP dated August 30, 2002
- Decree No. 83/2013/ND-CP dated July 22, 2013

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APPENDIX

(Attached to Decree No. 139 / 2016 /ND-CP dated October 4, 2016 of the Government )

SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness

---------------

DECLARATION OF LICENSE FEE

[01] Fee calculation period: year ………………

[02] First time

□

[03] Supplement 2nd time

□

[ 0 4] Fee payer: ...................................................................................................................
[ 0 5] Tax code : ................................................................................................................
[ 0 6] Address: ......................................................................................................................
[ 0 7] District: ……………………… [08] Province/City: ..........................................
[09] Phone: ……………………… [10] Fax: …………………… [ 11 ] Email : .................
[12] Tax agent (if any): ..............................................................................................
[13] Tax code: ................................................................................................................................
[14] Address: ......................................................................................................................
[15] District: ………………………… [16] Province/City: .......................................
[17] Phone: …………………… [18] Fax: ……………… [19] Email: ...........................
[20] Tax agency contract number : …………………………… dated .........................................
□ [21] Additional declaration for newly established establishments during the year (mark “X” if any )
Currency: Vietnamese Dong

Status	Target	Index code	Charter capital or investment capital, revenue	Subject fee level
(1)	(2)	(3)	(4)	(5)
1	Person paying business license fee ………………………………………… …………………………	[22]
2	Subordinate units with dependent accounting in the same locality (Specify name and address) ………………………………………… …………………………………………	[23]
3	Total license fees payable	[ 24 ]

I certify that the above declared data is true and I am responsible before the law for the declared data./.

TAX AGENT STAFF
Full name:
Certificate of practice number:

………, date……month……year……

FEE PAYER or

LEGAL REPRESENTATIVE OF THE FEE PAYER

(Sign, state full name, position and seal ( if any ))

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