Types of basic taxes that a company required to pay in Vietnam

When establishing a company, what types of taxes must the business fulfill? How much is the tax payable? Below are some notes on taxes and the types of taxes that businesses must fulfill when establishing a company in 2023.

Types of taxes that a company required to pay

• License fee (based on registered capital): Registered capital below 10 billion VND, business shall pay 2 million VND per year. While registered capital of 10 billion VND, above license fee will increase to 3 million VND per year.
• Value Added Tax (based on the company’s output and input balance).
• Corporate Income Tax (payable only when the company makes a profit, at a rate of 20% of the company’s profit).
• Export and Import Taxes (if engaged in import and export activities).
• Natural Resource Tax (if using natural resources).
• Special Consumption Tax (if engaged in restricted business sectors).

Filing and payment deadlines for tax returns

• For license fee: According to Decree No. 22/2020/ND-CP as amending and supplementing by Decree No. 139/2016/ND-CP effective from February 25, 2020, companies established in 2023 will be exempt from the license fee. However, companies are still required to declare and file the license fee return.
• Deadline for filing the license fee declaration: Taxpayers who start production, business activities, or newly establish a business; small and medium-sized enterprises that switch from household businesses must declare the license fee and submit the tax return to the directly managing tax authority before January 30 of the following year when they start production, business activities, or newly establish.
• Establishing a company is simultaneously additional business locations and company branches nationwide, which are also exempt from the license fee for these subsidiary units.

Deadline for tax return and payment of Value Added Tax (if applicable), reporting the use of invoices.

• Quarter 1 tax return: The latest deadline is April 30th.
• Quarter 2 tax return: The latest deadline is July 30th.
• Quarter 3 tax return: The latest deadline is October 30th.
• Quarter 4 tax return: The latest deadline is January 30th of the following year.

The deadline for provisional corporate income tax payment (if applicable) does not require a tax return.

• Quarter 1: The latest deadline is April 30th.
• Quarter 2: The latest deadline is July 30th.
• Quarter 3: The latest deadline is October 30th.
• Quarter 4: The latest deadline is January 30th of the following year.

Businesses are responsible for self-assessing provisional corporate income tax and then, at the end of the year, reconciling the total revenue and expenses to finalize the corporate income tax payable for the year (if applicable).

Deadline for annual financial report submission: The latest deadline for submitting the previous year’s financial report is March 30th of the following year.

Important considerations for tax declaration when newly establishing a company

• Regarding VAT declaration: Even if a business does not have any input and output invoices, it is still required to submit the VAT return by the deadline.
• Regarding reporting the use of invoices: Businesses are still required to report, even if they have not issued any VAT invoices (if the company has completed the procedures for notifying the issuance of VAT invoices).
• Regarding year-end financial reporting: Businesses should note that even if the company has no business activities, it is still necessary to prepare and submit the year-end financial report for the operating year.

Complying with tax obligations is both the right and duty of the business. Businesses must complete all tax declaration procedures and fulfill tax obligations after establishment. It is essential for businesses to pay special attention to the deadlines for tax declaration and payment to avoid violations, penalties, and increasing penalty amounts over time.

If you have any questions or concerns about these legal matters or any other issues related to the sequence of procedures and steps required after company establishment, please don’t hesitate to contact Viet An Law Firm at the following phone number: (+84) 9 61 67 55 66 or email: info@luatvietan.vn