What is license tax? Tax levels & license tax payment deadline 2021

License tax is simply understood as the annual tax payable by the business based on the charter capital recorded on the business license. The regulations on license tax are quite numerous and clear, however, not all businesses know well about tax levels, payment time and regulations on penalties for excise tax.

1 . What is the license fee (tax)?

The license fee is a direct tax and is usually a quota levied on business licenses (licenses) of businesses and business households. To put it simply, this is the corporate/company tax rate that must be paid annually to the tax administration agency directly. The level of collection by tier, based on the registered capital; the revenue of the previous business year or the value added of the previous business year, depending on the country/locality.

2. Deadline for submission of license fee declaration

According to Clause 3, Article 1 of Decree 22/2020 amending Clause 1, Article 5 of Decree 139/2016/ND-CP as follows:

“The fee payer has just started production, business or just established; Small and medium-sized enterprises moving from household businesses shall declare license fees and submit declarations to the tax authorities directly managing them before January 30 of the year following the new year when they start production or business operations or are newly established. “

New businesses established from January 1, 2021 will be exempted from paying license fees in 2021. This business must submit the first license fee declaration before January 30, 2022.

Households, individuals, groups of individuals paying tax by the presumptive method are not required to declare license fees

3. Deadline for payment of license fees in 2021

Also according to the new point of Decree 22/2020/ND-CP, the deadline for paying license fees is January 30 every year. Small and medium enterprises converted from business households (including branches, representative offices, business locations) will be exempted from license fees for the first 3 years from the date of receipt of the business registration certificate.

. Starting from the fourth year onwards, enterprises will pay license fees as follows:

– In case the license fee exemption period ends within the first 6 months of the year, the deadline for paying license fees is July 30 of the year in which the exemption period ends.

– In case the license fee exemption period ends within the last 6 months of the year, the deadline for paying the license fee is January 30 of the year adjacent to the year in which the exemption period ends.

For businesses established in 2020 and after February 25, 2020, license fees will be exempted in 2020, deadline for paying license fees 2021 of enterprises and branches, business locations, representative offices enterprise’s presence is no later than January 30, 2021. After this time, you must pay late payment interest 0.03% * number of days of late payment * amount of license fee payable phải

For businesses, branches, business locations, representative offices established  before February 25, 2020 , it is mandatory to pay the license fee no later than the last day of the deadline for submitting the fee declaration.

For business households that have just started production and business activities, tax authorities shall base themselves on tax declarations and tax industry databases to determine business revenue as a basis for calculating the amount of license fees payable by the household. Families, individuals and groups of individuals pay tax by the presumptive method

4. How to pay license fees

Have 2 way:

– Deposit cash to the State Treasury of the district at Vietinbank.

– Electronic payment of tax deducted from the company’s bank account. For this form of payment, the enterprise submits it through a digital signature.

Currently, some tax departments require electronic tax payment through digital signatures to process tax returns. Therefore, opening a corporate bank account and purchasing digital signatures is necessary for businesses.

5. Regulations on penalties for late payment of license fees and license fee declarations

According to Article 13 of Decree 125/2020/ND-CP issued on October 19, 2020, the administrative penalty for late submission of tax declaration dossiers is as follows:

• A warning will be imposed on the act of submitting tax declaration dossiers beyond the deadline from 01 to 05 days and with extenuating circumstances;
• A fine ranging from VND 2,000,000 to VND 5,000,000 shall be imposed for submitting tax declaration dossiers beyond the deadline from 01 day to 30 days, except for the case specified in item (1) above;
• A fine ranging from VND 5,000,000 to VND 8,000,000 shall be imposed for submitting tax declaration dossiers beyond the prescribed time limit from 31 days to 60 days;
• A fine ranging from VND 8,000,000 to VND 15,000,000 shall be imposed for one of the following acts:
• Submitting tax declaration dossiers beyond the prescribed time limit from 61 days to 90 days;
• Submitting tax declaration dossiers from 91 days or more over the prescribed time limit but no tax payable is incurred.
• A fine ranging from VND 15,000,000 to VND 25,000,000 shall be imposed for submitting a tax return more than 90 days after the deadline for submitting a tax return, and a payable tax amount has arisen and the taxpayer has paid tax. full payment of tax and late payment interest into the state budget before the time the tax authority announces the decision on tax inspection or tax inspection or before the tax authority makes a record on the late submission of tax declaration dossiers. according to the provisions of Clause 11 Article 143 of the Law on Tax Administration.

In case the enterprise pays the license fee later than the deadline, the fine for late payment is calculated as follows:

Late payment amount = License fee payment amount x 0.03% x Number of days late payment 

Vision has provided you with important and necessary information about tax levels and the deadline for paying license fees in 2021. If you still have questions or need more advice on legal information or services of Vision.

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