CARD TAX

What is a tax card?

The tax is simply a corporate tax rate that must be paid annually based on the charter capital stated on the business license. The tax regulations are quite many and clear, but not all businesses are well aware of the tax levels, payment time and regulations on tax penalties.

The business-license tax (BLT) is the english language tax. This phrase translates to mean business licensing tax, tax payable when entering business. In Vietnam, in current legal documents use the term "card fee" rather than the word "card tax".

1.Tax rates and tax levels payable in 2021

According to Clause 1, Clause 2, Article 4 of Decree No. 139/2016/ND-CP and Clause 1, Clause 2, Article 4 of Circular No. 302/2016/TT-BTC, the tax rates and levels of mon-subject fees payable to organizations, individuals, groups of individuals and households operating in the production and business of goods and services in 2021 are shown below the following table:

2.Time limit for submission of the application fee declaration

According to Clause 3, Article 1 of Decree No. 22/2020 amending Clause 1, Article 5 of ND 139/2016/ND-CP as follows:

"The fee payer is new to production, business or newly established; small and medium-sized enterprises transferred from business households to declare the subject fees and submit the declaration to the tax authority directly managing before January 30 of the new year after the new year of production, business or newly established activities"

Newly established enterprises from January 1, 2021 will be exempted from paying the 2021 subject fee. This enterprise must submit the first application fee by January 30, 2022.

Households, individuals and groups of individuals paying taxes under the securities method do not have to declare the moniker fee

3.Deadline for payment of 2021 test fees

According to the new point of Decree No. 22/2020/ND-CP, the deadline for paying the subject fee is no later than January 30 every year.

Small and medium-sized enterprises converted from business households (including branches, representative offices, business locations) will be exempted from the license fee for the first 3 years from the date of receipt of the business registration certificate. Starting from the fourth year onwards, the business will pay the following card fees:

– In case the time of exemption of the subject fee is ended within the first 6 months of the year, the time limit for payment of the subject fee is no later than July 30 of the end of the exemption period.

– In case the time of exemption of the subject fee is ended within the last 6 months of the year, the time limit for payment of the subject fee is no later than January 30 of the year adjacent to the end of the exemption period.

For enterprises established in 2020 and after February 25, 2020, 2020 is exempted from the moni-subject fee, the time limit for payment of the 2021 subject fee of the enterprise and its branches, business locations and representative offices is no later than January 30, 2021. After this time, the late payment interest rate of 0.03%* the number of late payment days * the amount of the subject fee payable

For enterprises, branches, business locations and representative offices established before February 25, 2020, it is mandatory to pay the subject fee no later than the last day of the time limit for submitting the fee declaration.

For new business households launching production and business activities, tax authorities shall base their tax declarations and tax sector databases on determining business revenues as a basis for calculating the payable mon-subject fees of households, individuals and groups of individuals paying taxes according to the securities method.

4. How to submit, in case of payment and exemption from payment of the subject fee

How to pay a test fee

There are two ways:

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

– Pay electronic taxes extracted from the company's bank account. For this form of submission, the enterprise submits through digital signatures.

Currently, some tax departments require electronic tax payment through digital signatures to settle tax declaration dossiers. Therefore, opening a corporate bank account and buying a digital signature is necessary for businesses.

In case of having to pay the test fee

Pursuant to Article 2 of Decree No. 139/2016/ND-CP and Clause 1, Article 1 of Circular No. 65/2020/TT-BTC, the payer of the moni-card fee is an organization or individual operating in the production and trading of goods and services, except for exemptions. Specifically, there are 7 cases where tax must be paid:

1. The business is established in accordance with the law.
2. The organization is established under the Law on Cooperatives.
3. Non-business units are established in accordance with the law.
4. Economic organizations of political organizations, socio-political organizations, social organizations, socio-professional organizations, people's armed units.
5. Other organizations operating production and business activities.
6. Branches, representative offices and business locations of organizations specified in Clauses 1, 2, 3, 4 and 5 of this Article (if any).
7. Individuals, groups of individuals and households engage in production and business activities.

10 cases where tax payment is free

Decree No. 139/2016/ND-CP stipulates that 7 subjects are exempted from the subject fee. Decree No. 22/2020/ND-CP has added 3 more subjects exempted from the subject fees and amended the 6th and 7th subjects of Decree No. 139/2016/ND-CP.

Currently, there are 10 cases that are exempt from the test fee. Namely the following:

1. Individuals, groups of individuals and households operating production and business activities have annual turnover of VND 100 million or less.
2. Individuals, groups of individuals and households engage in infreed production and business activities; There is no fixed location.
3. Individuals, groups of individuals, households produce salt.
4. Organizations, individuals, groups of individuals, households farming, fishing, seafood and fishery logistics services.
5. Commune cultural post office point; press agencies (print, newspapers, photojourage, electronic newspapers).
6. Cooperatives and cooperative unions (including branches, representative offices, business locations) operate in the field of agriculture in accordance with the law on agricultural cooperatives.
7. People's Credit Fund; branches, representative offices, business locations of cooperatives, cooperative unions and private enterprises doing business in mountainous areas.
8. Exemption of the subject fee in the first year of establishment or production and business activities (from January 1 to December 31) for:

a) Newly established organizations (newly granted tax codes, new business codes).

b) Households, individuals and groups of individuals for the first time in production and business activities.

c) During the period of exemption from the card fee, organizations, households, individuals and groups of individuals establishing branches, representative offices, business locations, branches, representative offices, business locations shall be exempted from the moni-card fees during the time of organization or household, individuals and groups of individuals are exempt from the card fee.

9. Small and medium-sized enterprises transferred from business households are exempted from the license fee for a period of 03 years from the date of being granted the first business registration certificate.

a) During the period of exemption from the card fee, small and medium enterprises establish branches, representative offices, business locations, branches, representative offices and business locations shall be exempted from the moni-subject fees during the period when small and medium enterprises are exempted from the subject fees.

b) Branches, representative offices and business locations of small and medium-sized enterprises (subject free as prescribed in Article 16 of the Law on Support for SMALL AND MEDIUM ENTERPRISES) established before the effective date of this Decree shall be exempted from the branch's card fees, Representative offices and business locations are calculated from the effective date of this Decree to the end of the time when small and medium-sized enterprises are exempted from the subject fees.

c) Small and medium-sized enterprises converted from business households before the effective date of this Decree shall implement the exemption of the subject fees as prescribed in Articles 16 and 35 of the Law on Support for SMALL AND MEDIUM ENTERPRISES.

10. Public general education institutions and public early childhood education institutions

Non-fixed trading activities are exempt from tax

5. Regulations on late payment of subject fees and declaration of subject fees

According to Article 13 of Decree No. 125/2020/ND-CP issued on October 19, 2020, the administrative penalty for late submission of tax declaration dossiers is as follows:

• A warning shall be imposed for submitting tax returns past the time limit of 01 day to 05 days and having exaggerating circumstances;
• A fine of from VND 2,000,000 to VND 5,000,000 shall be imposed for submitting tax returns past the time limit of 01 day to 30 days, except for the cases specified in section (1) above;
• A fine of from VND 5,000,000 to VND 8,000,000 shall be imposed for submitting tax returns past the prescribed time limit of 31 days to 60 days;
• A fine of from VND 8,000,000 to VND 15,000,000 shall be imposed for one of the following acts:

• Submit tax returns past the prescribed time limit from 61 days to 90 days;
• Submit tax declaration dossiers past the prescribed time limit of 91 days or more but no payable tax amounts are generated.
• A fine of from VND 15,000,000 to VND 25,000,000 shall be imposed for submitting tax declaration dossiers beyond the time limit of more than 90 days from the expiration date of submission of tax declaration dossiers, incurred tax payable amounts and taxpayers who have paid the full amount of tax and late payment into the State budget before the tax authority announces the tax inspection decision, tax inspectorate or before the time when tax authorities make a record of the act of late submission of tax declaration dossiers as prescribed in Clause 11, Article 143 of the Law on Tax Administration.

In case the enterprise pays the test fee later than the time limit, the late payment penalty shall be as follows: