📌 Summary:
- Exemption from business license fees first year Established for specified entities. Exemption policy in the first year of application. according to the Gregorian calendar year, not including fractional 12 months from the date of registration.
- The deadline for submitting the business license fee declaration form is no later than [date]. 30/01 (including years when you are exempt), to avoid the risk of penalties for late payment.
- The business license fee is determined based on the registered capital/investment capital.
- When changes in capital lead to changes in the fee bracket, records must be updated on time to apply the appropriate fee level from the following year.
Exempting newly established businesses from business license fees is an important incentive policy aimed at encouraging entrepreneurship and promoting business activities. However, this regulation is not applied universally but comes with specific conditions regarding the scope and duration of the exemption. Therefore, understanding the relevant regulations will help businesses minimize risks and avoid unnecessary mistakes. This article will analyze in detail the duration of the fee exemption as well as the necessary procedures for businesses to effectively utilize this policy.
I. What is a business license fee?
Currently, there is no legal document that provides an official definition of the concept. "business license fee" (formerly known as business tax).
However, based on the regulations regarding business license fees, the business license fee can be understood as follows:
-
Is a kind of direct taxesThat is, it is collected directly from taxpayers based on their production and business activities;
- There mandatory financial obligations which organizations, households, and individuals must fulfill in order to be permitted to operate legally in the production and business sector (except for cases of exemption);
II. For how long are newly established businesses exempt from business license fees?
According to the Clause 8 Article 3 Decree 139/2016/ND-CP (amended and supplemented by Decree 22/2020/ND-CP):
- Newly established businesses (those issued a new tax code/business registration number) are exempt from business license fees. first year Establishment or commencement of production and business activities (calculated according to the calendar year from January 1st to December 31st).
- During the same exemption period, if the business opens branch/representative office/business locationThese subsidiary units are also exempt from business license fees for the same period as the exemption granted to the parent company.
Note:
📜 “Small and medium-sized enterprises transitioning 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 specified period. 03 years from the date the business registration certificate was first issued."
– Clause 9, Article 3 of Decree 139/2016/ND-CP
III. During the year of exemption, is the business required to submit a business license fee declaration?
According to the Point a, Clause 1, Article 10 Decree 126/2020/ND-CP (guiding the Law on Tax Administration):
- Although exempt in the first year, businesses (excluding household/individual businesses) You still have to submit the business license fee declaration form. at the latest January 30th of the following year after the year of establishment or the year of commencement of operations.
- If there are during the year capital change If the fee bracket is changed, the fee payer must resubmit the application form no later than the latest deadline. January 30th of the year following the year in which the change occurs..
IV. How are business license fees calculated and paid after the exemption period expires?
Upon the expiration of the exemption period, businesses must declare and pay the annual business license fee as prescribed. The amount to be collected is determined. based on registered capital size recorded in the Business Registration Certificate (or investment capital in the Investment Registration Certificate if there is no charter capital).
According to the Article 4 According to Decree 139/2016/ND-CP, the current fee rates are as follows:
| Subject of application | Collection rates (VND/year) |
|
Organizations with registered capital/investment capital over 10 billion VND |
3,000,000 |
|
Organizations with registered capital/investment capital from 10 billion VND or less |
2,000,000 |
|
Branches, representative offices, business locations, public service units and other economic organizations |
1,000,000 |
V. Which entities are currently subject to paying business license fees?
According to the Article 2 According to Decree 139/2016/ND-CP (amended by Clause 1, Article 1 of Circular 65/2020/TT-BTC), the payer of business license fees is... Organizations, individuals, groups of individuals, and households engaged in the production and business of goods and services. (except for cases where exemption applies).
Here are some tips:
- The business was established in accordance with Vietnamese law.
- The organization was established under the Law on Cooperatives;
- The public service unit is established in accordance with the provisions of the law;
- Economic organizations of political organizations, socio-political organizations, social organizations, professional social organizations, and people's armed forces units;
- Other organizations engaged in production and business activities;
- Subsidiary units (branches, representative offices, business locations) of the aforementioned organizations.
- Individuals/groups of individuals/households engaged in production and business activities.
The policy of exempting business license fees is an advantage that helps young businesses get off to a good start, but any negligence can quickly turn this advantage into a burden. Businesses need to seriously comply with regulations on declaration and carefully monitor the duration of the preferential treatment. When businesses Understand correctly, do correctly.From the very first day, all operations will be on a safe and stable trajectory, building a foundation for long-term sustainable development!