The government has just issued Decree 22/2020/ND-CP amending and supplementing a number of articles of Decree 139/2016/ND-CP dated October 4, 2016 of the Government regulating business license fees. The most notable point is the addition of three more cases exempt from business license fees. Business license fees for 2020
Three categories of businesses are exempt from business license fees for the first year of establishment.
The following entities are exempt from business license fees in the first year of establishment or commencement of production and business activities (from January 1st to December 31st):
- Newly established organizations (assigned new tax identification numbers and new business registration numbers)
- Households, individuals, and groups of individuals engaging in production and business activities for the first time.
- Branches, representative offices, and business locations of the two aforementioned entities were established during the period when they were exempt from business license fees.
During the period of exemption from business license fees, if subjects 1 and 2 establish branches/representative offices/business locations, those branches/representative offices/business locations will also be exempt from business license fees.
Small and medium-sized enterprises (SMEs) converting from household businesses are exempt from business license fees for a period of 03 years.
According to Clause 9, Article 3 of the Decree, small and medium-sized enterprises (SMEs) that convert from household businesses (as stipulated in Article 16 of the Law on Support for Small and Medium-Sized Enterprises) are exempt from business license fees for a period of 03 years from the date of initial issuance of the business registration certificate.
Accordingly, during the period of exemption from business license fees, if a small and medium-sized enterprise establishes a branch/representative office/business location, that branch/representative office/business location will also be exempt from business license fees.
Branches, representative offices, and business locations of small and medium-sized enterprises (eligible for exemption from business license fees as stipulated in Article 16 of the Law on Support for Small and Medium-Sized Enterprises) established before the effective date of this Decree shall have their business license fee exemption period calculated from the effective date of this Decree until the end of the period during which the small and medium-sized enterprise is exempt from business license fees.
Small and medium-sized enterprises that converted from household businesses before the effective date of this Decree shall be exempt from business license fees as stipulated in Articles 16 and 35 of the Law on Support for Small and Medium-Sized Enterprises.
Public primary and secondary schools and public preschools are exempt from business license fees.
According to Clause 10, Article 3 of the Decree, public general education institutions and public preschools are also exempt from business license fees.
No fees are required if business operations cease.
According to point c, clause 2, Article 1 of Decree 22/2020/ND-CP, a taxpayer who is currently operating and sends a written notice to the directly managing tax authority regarding the temporary suspension of production and business activities during the calendar year is not required to pay the fee for the year of temporary suspension if they meet the following two conditions:
– The application for temporary suspension of production and business activities must be submitted to the tax authorities before January 30th of each year.
- Business license fees for the year of temporary suspension of production and business operations have not been paid.
Note:
If the above two conditions are not met, the business license fee for the entire year must be paid.
Decree 22/2020/ND-CP came into effect on February 25, 2020.
Download the Decree Decree No. 22/2020/ND-CP: Here
