WHAT IS LICENSE TAX?  IF A BUSINESS INDIVIDUAL HAS TERMINATED BUSINESS AND IS OPERATING AGAIN, HOW IS THE TIMELINE FOR PAYING THE LICENSE FEE DETERMINED?

In business activities, there are many taxes that need to be paid and attended. Through today’s article, Pham Consult will introduce to you more details about License Tax, one of the types of taxes that businesses must participate in when doing business.

1. What is license tax?

License tax (or license fee) is a direct tax paid annually by individuals, business households, and organizations producing and trading goods and services based on investment capital. or charter capital, revenue for direct tax management agencies.

Except for some cases where license tax is exempted, all individuals, business households, and business organizations must pay license tax as a card to continue doing business and production.

Note that: although the term license tax is still commonly used by people, it is no longer used in State legal documents from January 1, 2017, but is replaced by the term “license fee”. .

2. Subjects subject to license tax

Based on the provisions of the Decrees and Circulars on subjects subject to license fee tax including individuals, business households, households with business activities, organizations and enterprises with production activities, business, specifically as follows:

 

Individuals, groups of individuals, households, business households that produce and trade goods or services with annual revenue of less than 100 million/year.

Individuals, groups of individuals, households, business households with irregular production and trading of goods or services or non-fixed business locations according to the regulations of the Ministry of Finance (Ministry of Finance).

Individuals, groups of individuals, households, and business households engaged in salt production and trading activities.

Organizations, groups of individuals, households, and business households engaged in production, farming, fishing, and logistics services for fisheries.

Post offices, press agencies, commune cultural agencies.

Joint cooperatives and cooperatives operating in the agricultural sector according to regulations issued by relevant competent authorities.

Credit funds, representative office branches, business locations of cooperatives, cooperative unions and private enterprises with business activities in mountainous areas.

 

3. The deadline for paying license fees is specified in Article 18 of Decree 126/2020/ND-CP, specifically as follows:

 

Tax payment deadline for state budget revenues from land, fees for granting rights to exploit water resources, mineral resources, fees for using marine areas, registration fees, license fees

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9. License fees:
10. a) The deadline for paying license fees is January 30 every year.
11. b) For small and medium-sized enterprises converting from business households (including dependent units and business locations of the enterprise) at the end of the license fee exemption period (the fourth year from the year establishing a business), the deadline for paying license fees is as follows:

b.1) In case the license fee exemption period ends during the first 6 months of the year, the deadline to pay the license fee is July 30 of the year the exemption period ends.

b.2) In case the license fee exemption period ends during the last 6 months of the year, the deadline to pay the license fee is January 30 of the year immediately preceding the year in which the exemption period ends.

1. c) For business households and individual businesses that have terminated production and business activities and then resumed operations, the deadline for paying license fees is as follows:

c.1) In case of starting operations in the first 6 months of the year: No later than July 30 of the year of starting operations.

c.2) In case of opening operations during the last 6 months of the year: No later than January 30 of the year immediately preceding the year of starting operations.

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Accordingly, for business individuals who have terminated business activities and then resumed operations, the deadline for paying license fees is determined as follows:

 

– In case of operation in the first 6 months of the year: No later than July 30 of the year of operation.

 

– In case of opening operations during the last 6 months of the year: No later than January 30 of the year immediately preceding the year of operation.

 

4. What is the deadline for submitting tax declarations for license fee revenues when individuals do business?

The deadline for submitting tax declarations for license fee revenues when individuals do business is specified in Article 10 of Decree 126/2020/ND-CP as follows:

 

Deadline for submitting tax declarations for land revenues, license fees, registration fees, licensing fees and other revenues according to the law on management and use of public assets

Taxpayers comply with the regulations on the deadline for submitting tax declarations according to the provisions of Article 44 of the Law on Tax Administration. Regarding the deadline for submitting declarations of land revenues, license fees, registration fees, licensing fees and other revenues according to the law on management and use of public assets as prescribed in Clause 5 Article 44 of the Law on Tax Administration is implemented as follows:

1. License fees
2. a) License fee payers (except business households and individual businesses) are newly established (including small and medium-sized enterprises transferred from business households) or have established additional dependent units or business locations. business or starting production or business activities, submit the license fee declaration no later than January 30 of the year following the year of establishment or start of production or business activities.

In case there is a change in capital during the year, the license fee payer shall submit the license fee declaration no later than January 30 of the year following the year in which the change information occurred.

1. b) Business households and individual businesses are not required to submit license fee declaration documents. The tax authority bases on tax declaration records and tax management database to determine revenue as a basis for calculating the amount of license fee payable and notifies the person paying the license fee to comply with the provisions of Clause 1 of this Article. Article 13 of this Decree.

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Accordingly, business individuals do not have to submit license fee declaration documents. The tax authority bases on tax declaration records and tax management database to determine revenue as a basis for calculating the amount of license fee payable and notifies the license fee payer to comply with regulations.

5. How is the license fee collected for individual businesses regulated?

License fee rates applicable to business individuals are specified in Article 4 of Decree 139/2016/ND-CP amended by Point b, Clause 2, Article 1 of Decree 22/2020/ND-CP and Point a Clause 2, Article 1 of Decree 22/2020/ND-CP is as follows:

 

License fee collection rate

1. License fee rates for organizations producing and trading goods and services are as follows:
2. a) Organizations with charter capital or investment capital of over 10 billion VND: 3,000,000 VND/year;
3. b) Organizations with charter capital or investment capital of 10 billion VND or less: 2,000,000 VND/year;
4. c) Branches, representative offices, business locations, public service units, other economic organizations: 1,000,000 VND/year.

The license fee collection rate for organizations specified in Points a and b of this Clause is based on the charter capital recorded in the business registration certificate; In case there is no charter capital, it is based on the investment capital stated in the investment registration certificate.

2. License fee rates for individuals and households engaged in production and trading of goods and services are as follows:
3. a) Individuals, groups of individuals, households with revenue over 500 million VND/year: 1,000,000 VND/year;
4. b) Individuals, groups of individuals, households with revenue over 300 to 500 million VND/year: 500,000 VND/year;
5. c) Individuals, groups of individuals, households with revenue over 100 to 300 million VND/year: 300,000 VND/year.
6. d) Revenue as a basis for determining license fee rates for individuals, groups of individuals, and households according to the guidance of the Ministry of Finance.
7. Small and medium-sized enterprises converting from business households (including branches, representative offices, business locations) at the end of the license fee exemption period (the fourth year from the year of business establishment) Business): In case it ends in the first 6 months of the year, pay the license fee for the whole year; in case it ends in the last 6 months of the year, pay 50% of the license fee for the whole year.

Households, individuals, and groups of individuals whose production and business have been dissolved and have resumed production and business activities during the first 6 months of the year must pay the license fee for the whole year, and during the last 6 months. pay 50% of the annual license fee.

Thus, the license fee collection rate applicable to business individuals is implemented according to the provisions of Clause 2 of this Article.

 

Thus, through the article on Pham Consult, we have helped you learn more about license tax, and the deadline for paying license tax for business individuals. Hope the above information will help your work.