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TAXATION Chapter 2 License Fees References • Law on fees and charges No 97/2015/QH13 issued by National Assembly on 25 November 2015, effective from January 01, 2017 • Decree 139/2016/ND CP dated 04 O[.]
TAXATION Chapter 2: License Fees References • Law on fees and charges No.97/2015/QH13 issued by National Assembly on 25 November 2015, effective from January 01, 2017 • Decree 139/2016/ND-CP dated 04 October 2016 on regulations for license fees, effective from January 01, 2017 • Circular 302/2016/TT-BTC dated 15 November 2016 on guidelines for license fees, effective from January 01, 2017 Learning Objectives • LO 2-1: Explain concept, characteristics and role of license fees • LO 2-2: Identify payers and exemption from license fees • LO 2-3: Define bases and rates of license fees • LO 2-4: Grasp declaration and payment of license fees Concept and Characteristics of License Fees LO 2-1: Explain concept, characteristics and role of license fees • Business license tax (converted to license fee from 2017) is a direct tax and usually quotas which are levied on the business license of enterprises and households • License fee is collected annually • Simplicity: ➢ License fee is a specific amount ➢ Declare only one time at establishment Role of License Fees • Help the state control over the whole of business entities at their establishment or at the beginning of the year • Mobilize contributions of business entities from the beginning of the year in order to meet the state’s needs of expenditures while taxes have not generated revenue • Support actively for business registration License Fee Payers LO 2-2: Identify payers and exemption from license fees • License fee payers are organizations and individuals engaging in production and trade of goods/services, except for exemption cases, including: Enterprises which are established under the regulations of law Other organizations which have their trade/production activities Organizations which are established under the Law on Cooperatives Branches, the representative offices of organizations specified in 1, 2, 3, and (if any) Public service providers which are established under the regulations of law Individuals, groups of individuals and households that have their trade/production activities Business organizations of the political organizations, the social – political organizations, the occupational – social organizations and people's armed units Exemption from Licensing Fee Individuals, groups of individuals and households engaging in business with annual revenues of less than or equal to VND 100 million The annual revenue is the total assessable revenue with regard to personal income tax in accordance with regulations of law on personal income tax Individuals, groups of individual and households engaging in irregular business or business without fixed location Individuals, groups of individual and households producing salt Organizations, individuals, groups of individual and households doing the aquaculture, fisheries and fishing logistic services Exemption from Licensing Fees (cont.) Commune cultural post offices and press agencies (printed, radio, television and online newspapers) Branches, representative offices and business locations of the cooperatives that have direct technical service activities in service of agriculture Communal people’s credit fund; cooperatives specialized in service business for agricultural production; branches, representative offices and business locations of cooperatives and private enterprises carrying on their business in the mountainous areas License Fee Bases LO 2-3: Define bases and rates of license fees ▪ License fee bases of organizations: ➢ the charter capital written in the certificate of business registration; or in the certificate of enterprise registration; or in the charter of the cooperatives; ➢ the investment capital written in the certificate of investment registration or decision on investment policies (where there is no charter capital) ➢ If the economic organizations change their capital, the ground for determining the rate of licensing fees is their capital of the year preceding the year of calculation of licensing fees ➢ In case the capital is in foreign currency, it shall be converted into VND applying the buying rate of banks or credit institutions where the payers open their accounts at the time they make payment to the state budget License Fee Bases (cont.) ▪ License fee bases of individuals, groups of individuals and households: ➢ total assessable revenues with regard to personal income tax in accordance with regulations of law on personal income tax ➢ If their revenue is changed, the ground to determine the amounts of licensing fees is the revenue of the year preceding the year of calculation of licensing fees ➢ In case these payers engaging new business within the year, the revenue used to determine the amount of license fees shall be the revenue of the tax year as prescribed in law on personal income tax ... and role of license fees • LO 2- 2: Identify payers and exemption from license fees • LO 2- 3: Define bases and rates of license fees • LO 2- 4: Grasp declaration and payment of license fees Concept... on fees and charges No.97 /20 15/QH13 issued by National Assembly on 25 November 20 15, effective from January 01, 20 17 • Decree 139 /20 16/ND-CP dated 04 October 20 16 on regulations for license fees, ... effective from January 01, 20 17 • Circular 3 02/ 2016/TT-BTC dated 15 November 20 16 on guidelines for license fees, effective from January 01, 20 17 Learning Objectives • LO 2- 1: Explain concept, characteristics