Business license fee for representative offices

Official Letter No. 658/TCT-CS dated February 28, 2017, from the General Department of Taxation regarding business license fees for representative offices:

The Ministry of Finance has issued official letters No. 15865/BTC-CST dated November 7, 2016, and No. 1025/BTC-CST dated January 20, 2017, providing guidance on business license fees.

Accordingly, if a business's representative office engages in the production or trading of goods and services, it must pay the business license fee; if the representative office does not engage in the production or trading of goods and services, it is not required to pay the business license fee as stipulated.

View the document here.

Dear: Phan Le Construction Trading and Service Company Limited
(Address: No. 28, Street No. 20, Him Lam Residential Area, Tan Hung Ward, District 7, Ho Chi Minh City)

The General Department of Taxation received Official Letter No. 1447/VPCP-ĐMDN dated February 20, 2017 and Official Letter No. 666/VPCP-ĐMDN dated January 23, 2017 from the Government Office regarding the forwarding of the petition from Phan Le Construction and Service Trading Company Limited concerning business license fees for representative offices. Regarding this matter, after reporting to the Ministry of Finance, the General Department of Taxation has the following opinion:

– In Official Letter No. 1263/TCT-CS dated April 13, 2011, the General Department of Taxation, based on the guidance in Circular No. 42/2003/TT-BTC dated May 7, 2003, of the Ministry of Finance, responded to the Global Sustainable Forestry Economic Development Investment Joint Stock Company and sent it to the Tax Departments of provinces and centrally-administered cities as follows: “In the case of representative offices of the Global Sustainable Forestry Economic Development Investment Joint Stock Company in the provinces, if they only conduct transactions and trade promotion, and do not engage in business activities or collect and disburse money, they are not required to pay business license tax. If the representative offices of the Company engage in business activities, they must pay business license tax according to the provisions of the law.”

– Item No. 3, Section III, Part B, Appendix 01 of the List of Fees and Charges issued with Law No. 97/2015/QH13 dated November 25, 2015, of the National Assembly of the Socialist Republic of Vietnam (effective from January 1, 2017) stipulates state management fees related to production and business: "Business license fee"

– Article 2 of Government Decree No. 139/2016/ND-CP dated October 4, 2016, on business license fees stipulates:

“The entities liable for business license fees are organizations and individuals engaged in the production and business of goods and services, except for cases stipulated in Article 3 of this Decree, including:

1. The business is established in accordance with the law…

6. Branches, representative offices, and business locations of organizations specified in Clauses 1, 2, 3, 4, and 5 of this Article (if any).”

Based on the above regulations, the Ministry of Finance issued Official Letter No. 15865/BTC-CST dated November 7, 2016, and Official Letter No. 1025/BTC-CST dated January 20, 2017, providing guidance on business license fees. Accordingly, in cases where a representative office of an enterprise engages in the production and trading of goods and services, it must pay business license fees; in cases where the representative office does not engage in the production and trading of goods and services, it is not required to pay business license fees.

The General Department of Taxation provides this response for the information of Phan Le Construction and Trading Service Co., Ltd.