1. License fee
License fee is a fee that requires business to pay annually; the payable amount is based on the charter capital – in other words, business pays taxes based on company signs/ business license when established.
Pursuant to Decree 139/2016/NĐ-CP regulating license fee; Collecting and declaring fee; license fee payment for 2017 as followed
- The license fee declaration shall be executed once when fee payer starts their business activities, no later than the last day of the month that business activities begin.
- In cases the fee payer just set up a business establishment but has not yet commenced any business activities, he / she must declare the license fee within 30 days from the date of being granted the business registration certificate or the date of issuance investment registration certificate and tax registration.
- Deadline for license fee payment shall be January 30 every year; for newly established organizations, it shall be the deadline for submitting license fee declaration dossier. For businesses establish in the period from July 1 to December 31, the license fees must be paid in the first year is only 50% of the license fee. Over the next year, submit normally.
Levels of license fee applicable to business, production organizations include only 3 levels:
- For organizations having charter capital/ investment capital over 10 billion VND: 3 million VND/year
- For organizations having charter capital/ investment capital of 10 billion VND or less: 2 million VND/ year
- For branches, representatives, business locations, non-business units and other economic organizations: 1 million VND/ year.
2. Value added tax (VAT)
Value Added Tax (VAT): manufacturers, traders or service providers pay to the State by adding this tax amount to the selling price to consumers.
For example, when buying goods at the supermarket, the buyers pay for the purchased goods, and the included VAT.
Enterprises only pay tax after deducting VAT of purchased goods and services, lower than VAT of sold goods and services.
- Subjects pay VAT declarations by Quarter: newly established enterprises, enterprises with a total turnover of the preceding year are up to 50 billion VND
- Payers of monthly VAT Declarations: For enterprises with a total of 50 billion VND in the preceding year.
- VAT declaring based on the amount of tax incurred in VAT invoice or VAT payment receipt of imported goods, not based on other documents.
There are 2 methods to calculate value added tax: deduction method and direct method.
3. Company income tax (CIT)
Enterprises directly pay taxes to the State by calculating the following:
CIT payable = (Revenue – Capital – Cost) X Standard CIT rate 20% (from January 1, 2017)
At the beginning of the fourth quarter of 2014, according to Circular 151/2014 / TT-BTC, enterprises do not have to make a temporary CIT quarterly declaration but only have to calculate the temporary payable tax amount and pay the temporary CIT amount. calculated to the Tax Authority (if any). At the end of the fiscal year (December 31th), the Accountant will summarize the data and make a CIT self-finalization declaration (form 03 / TNDN) to submit to the Tax Agency, which fully reflects the criteria: Business Revenue, Capital, Cost, Interest / Loss, Self-calculation CIT of the whole year (if any).
Revenue: Based on the invoice for selling goods and services – regardless of whether it has been collected or not.
Cost: Calculated when selling goods and services (prices based on purchased goods – must have an invoice, value from 20 million or more, must transfer, attach payment payment authorization).
4. Personal income tax (PIT)
Taxpayers directly pay tax to the State through:
Enterprises deduct and pay on behalf of employees working at enterprises.
Payable PIT = Income from personal income tax * Tax rate
– Income from personal income tax = Income subject to PIT – Deductions.
– Income subject to PIT: is the total taxable income received from the paying company.
– Deductions include:
+ Reduction of family circumstances: For individual is VND 9,000,000 / person / month. For dependents is VND 3,600,000 / person / month.
+ Compulsory insurance: Social insurance, health insurance, unemployment insurance …