Instructions for declaring business locations license tax in Vietnam

After establishing a business location, a representative office or company branch must submit a license tax declaration. But how to declare license tax for business locations? What are the specific steps? These are questions that many customers wonder about. To answer our customers’ questions, Viet An Law Firm offers an article about instructions for declaring business locations license tax in Vietnam.

Legal basis

• Law on Tax Administration 2019;
• Decree 22/2020/ND-CP amending Decree 139/2016/ND-CP regulating license fees;
• Decree 126/2020/ND-CP details several articles of the Law on Tax Administration.

What is the license tax in Vietnam?

The license tax is a direct tax that businesses must pay annually based on the charter capital recorded on the business license. The fee is divided into levels, based on the registered capital or revenue of the previous business year or the added value of the previous business year depending on each country and locality.

Subjects paying license tax in Vietnam

Under Decree 126/2020/ND-CP regulating license fee payers who are organizations and individuals engaged in producing and trading goods and services, including:

• Enterprises are established according to the provisions of law;
• The organization is established under the Cooperative Law;
• Public service units are established according to the provisions of law;
• Economic organizations of political organizations, socio-political organizations, social organizations, socio-professional organizations, people’s armed units;
• Other organizations engaged in production and business activities;
• Branches, representative offices, and business locations of the organizations specified above ;
• Individuals, groups of individuals, and households engaged in production and business activities.

Accordingly, the business location of an enterprise established under the Enterprise Law 2020 is subject to paying license fees.

License tax rate

In addition, for newly established organizations and businesses:

• businesses established in the first 6 months of the year: Pay the license fee for the whole year
• Enterprises established in the last 6 months of the year (Established from July 1 to December 31) must pay 50% of the annual license fee for the first year (year of establishment).

Instructions for declaring business locations license tax in Vietnam

Business location in the same province as the company headquarters

Procedures for declaring license tax include:

• Documents to prepare: License fee declaration is issued with the form.
• The business will submit the license fee declaration for that business location to the tax agency directly managing that business.

The deadline to pay a license tax for new business locations is January 30 every year. If the business location is newly established and operating, then the license tax must be paid no later than the last day of the deadline for submitting the license fee declaration (i.e. before January 30 of the year following the new year of operation, production, business, or newly established).

Business location in a different province from the company headquarters

Procedures for paying license tax for business locations other than the company’s headquarters:

• Documents to prepare: License fee declaration is issued with the form.
• The business location will submit the license fee declaration to the local tax authority where that business location is located.

The deadline to pay a license tax for new business locations is January 30 every year. If the business location is newly established and operating, then the license tax must be paid no later than the last day of the deadline for submitting the license fee declaration (i.e. before January 30 of the year following the new year of operation). production, business, or newly established).

Steps to prepare a license tax declaration for business locations in other provinces

Step 1: Log in to your business’s electronic tax account, select ” Register current location ” and select ” Register new tax agency ”

Step 2: Select Register current location. Here you need to select the province or city where the business location is established. And choose the tax authority of the business location. After selecting, click the “register ” button at the bottom of the page to register your current location.

Step 3: Choose a current tax management agency and register the declaration.

Step 4: Select the declaration to declare the current tax. These can be applied to value-added declaration 01/GTGT, license tax declaration, other declarations,…etc. In this case, we will choose license tax fee declaration form 01/LPMB – License fee declaration (TT80/2021). After selecting, press the ” register ” button.

Note:

To prepare a license fee declaration, you need to prepare complete information before declaring. The information includes:

• Name of business location to be declared;
• Head office address of business location;
• Electronic tax account of the parent company.

Step 5: After registering, go to online declaration select the declaration to declare, and select the tax authority of your current business location. Then fill in the year and declaration period and click continue.

Step 6: Next, the website will display the information that needs to be declared. Fill in the information as shown below in the fields such as Business location name, district, province, city where the location is located, location code, and license fee level.

Regarding the choice of license fee, there will be 3 cases.

• Case 1: Business locations established with the parent company in the year of declaration will be exempt from license fees.
• Case 2: The business location was established in a different year than the parent company and was established in the first half of the fiscal year, then you need to choose a license fee of 1 million VND.
• Case 3: Business locations established differently from the parent company and established in the second half of the fiscal year (from July 1 to December 31), choose a business location fee of 500,000 VND.

After completing the declaration, you need to click complete and insert your digital signature to sign the declaration to complete the steps to declare the license fee declaration. After completing the declaration, you should make a paper to pay money into the budget and pay money into the budget to avoid delays.

Regarding the assignment of tax authorities to manage business licenses

Based on budget collection tasks and the tax management situation in the area, the Department of Taxation assigns tax authorities to manage taxes for business locations based on registration information of business locations in the List of business locations. List of business locations with an enterprise, or branch of an enterprise (the managing unit of the business location) headquartered in another provincial locality on the TMS system and notify in writing to the tax authority. assigned to tax management.

Some related questions

What is a license fee declaration?

A license fee declaration is a declaration to declare the business license fees that must be submitted annually when first established, when changing charter capital, or when establishing branches, representative offices, and new business locations based on registered enterprise charter capital.

Where should independent accounting branches in other provinces submit license fee declarations?

The place to receive license fee declarations of independent accounting branches in other provinces is the tax agency directly managing that branch.

For customers who need advice on business location tax declaration, please contact Viet An Law Firm – Tax Agent for the best support.