After establishing and commencing operations, a company must pay fees and charges to the State as stipulated by law. This demonstrates the company's obligation to the nation. In Vietnam, businesses must pay the following types of taxes:
1. Business license fee – Business license tax
Business license tax This is a mandatory tax that businesses must pay annually based on the registered capital stated in their business license. After obtaining the business license, the company must submit the Business License Fee Declaration Form to the tax authority directly managing it.
According to Article 4 of Decree 139/2016/ND-CP and Circular 302/2016/TT-BTC, regulations on business license fees for organizations engaged in the production and trading of goods and services, and regulations on the deadline for submitting business license tax declarations.
However, since 2018, according to the provisions of the 2017 Law on Supporting Small and Medium-Sized Enterprises, business households converting into small and medium-sized enterprises will be exempt from business license fees for the first 03 years.
– For representative offices, business locations, branches, non-profit organizations, and other economic organizations, the fee is 1.000.000 VND/year.
– For businesses/organizations with charter capital or investment capital of 10 billion VND or less, the fee is 2.000.000 VND/year.
– For businesses/organizations with charter capital or investment capital exceeding 10 billion VND, the fee is 3.000.000 VND per year.
+ The deadline for filing business license tax returns is the last day of the month in which business operations begin.
+ In the case of newly established businesses that have not yet commenced production or business activities, taxpayers must declare business license tax within 30 days from the date of issuance of the business registration certificate or the investment registration certificate and tax registration.
The deadline for paying business license tax is January 30th of each year. In the case of newly established or operating businesses, the deadline is the last day of the deadline for submitting the tax declaration form.
👉 See more: Things startups need to know: Policies on exemption from business license fees for new businesses.
2. Value Added Tax (VAT)
Value Added Tax (VAT) is a tax levied on the added value of goods, which is the difference between the purchase price and the selling price of products, goods, and services arising during the process from production and distribution to consumption.
Based on the 2008 Value Added Tax Law, the rate varies depending on the specific industry and profession. VAT There are also differences: The tax rate can be 0%, 5%, or 10%.
+ 0% tax rate: For services and goods exported to Article 9 of Circular 219/2013/TT-BTC.
+ 5% tax rate: For certain types of goods specified in Article 10 of Circular 219/2013/TT-BTC, as amended and supplemented by Circular 26/2015/TT-BTC).
+ 10% tax rate: For all other services and goods as specified in Article 11 of Circular 219/2013/TT-BTC.
There are two methods for calculating value-added tax:
- Deduction method:
VAT payable = Output VAT – Input VAT
- Direct method:
The amount of VAT payable = VAT of the goods * VAT rate of those goods.
3. Corporate Income Tax (TNDN)
After establishing a company, if the business generates profits from its production and trading activities, it is obligated to pay corporate income tax to the state.
Corporate income tax is a tax levied on the final profit of a business, after deducting reasonable expenses. All individuals, organizations, and businesses producing or trading goods and services with income are required to pay corporate income tax.
Similar to VAT, corporate income tax for each business depends on its industry, sector, and type of business, and therefore the tax incentives also vary.
Corporate income tax payable = Taxable value * Tax rate
According to Clause 1, Article 11 Circular 78/2014/TT-BTC then from January 1, 2016
If revenue is less than 0, the business will not have to pay corporate income tax.
+ Revenue up to 20 billion VND: Corporate income tax rate is 20%
+ For revenue exceeding 20 billion VND: The corporate income tax rate is 22%.
+ For businesses engaged in oil and gas exploration and production in Vietnam: Corporate income tax rate ranges from 32% to 50%.
+ Specifically for small and medium-sized enterprises (SMEs), starting in 2018, a lower corporate income tax rate than the normal rate will be applied for a limited time.
4. Personal income taxPIT)
Personal income tax is a type of tax that businesses pay on behalf of their employees. When a business hires employees and pays them income, and withholds tax, it is responsible for declaring and submitting the tax return to the tax authorities.
Personal income tax is calculated monthly, declared monthly or quarterly, but settled annually.
Individuals subject to personal income tax are residents of Vietnam with taxable income arising both within and outside Vietnam, and non-residents with taxable income arising within Vietnam.
Personal income tax payable = Taxable income * Tax rate
Personal income taxable income = Income subject to personal income tax – Deductions
– Deductions include:
+ Personal deductions: 9.000.000 VND/person/month for the individual. 3.600.000 VND/person/month for dependents.
+ Mandatory insurance contributions: Social insurance, health insurance, unemployment insurance, and occupational insurance in certain specific fields.
If businesses are not aware of the regulations, they may: delay tax declarations, delay tax payments, or make incorrect tax declarations and payments. This can lead to administrative penalties or, even more seriously, criminal penalties.
When establishing a business, it is mandatory to understand the regulations of the law in general and tax law in particular.
Also một số loại Other taxes vary depending on the industry and type of business activity. The characteristics of businesses will vary as follows:
- Current tax
- Customs duty
- Special consumption tax
- Resource tax
- Import and export taxes
