Taxes must be paid by enterprises according to the law

During production process and business activities, enterprises are required to pay the following taxes:

1. License tax (license fee)

What is the license fee?

License fee is a fee directly charged to the charter capital or investment capital of enterprises.

Time limit for submitting the license fee

Pursuant to Decree 22/2020/ND-CP amending Decree 139/2016/ND-CP on license fees, time limit for submitting license fee as follows:

• The license fee is made once when the fee payer starts business activities, no later than the last day of the month of starting business activities.

• Time for paying license fees is January 30 each year. In case the fee payer is newly operated or established, the duration is the last day of the time limit for submitting the license fee declaration.

Course of license fee

According to the provisions of Article 4 of Circular 302/2016/TT-BTC stipulating the rate of license fee for organizations engaged in production and trading of goods and services, as follows:

2. Value-Added Tax

What is Value-Added Tax (VAT)?

VAT is an indirect tax, based on the added value of goods or services during the process from production, circulation to consumption.

According to regulations, this tax will be paid to the State budget according to the level of consumption of goods or services.

Time limit for VAT declaration

Pursuant to Article 44, Law on Tax Administration No. 38/2019/QH14, time limit for submitting VAT declaration is as follows:

• In case the enterprise declares on a monthly basis, the time for submission is 20 days from the end of that month.

• In case the enterprise declares quarterly, the time for submission is 30 days from the end of that quarter.

How is value added tax determined?

Value added tax is calculated by deduction method and direct method.

• Tax deduction method:

• Method of direct calculation on value added:

In particular, the VAT rate for enterprises ranges from 0% - 5% - 10% (depending on the type of goods and services of the enterprises).

3. Corporate income tax

What is corporate income tax (CIT)?

• Corporate income tax (CIT) is a direct tax levied on the income after deducting reasonable and lawful expenses related to the taxpayer's income.

• All individuals, organizations and establishments producing and trading goods and services with income must pay CIT.

Time limit for tax declaration and finalization:

• Tax declaration: According to Article 17 of Circular 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance, enterprises do not have to make provisional CIT declarations, just based on the results of production activities. The business output of the enterprise shall calculate the temporary payment amount no later than the 30th day from the end of the quarter in which the tax liability arises.

• Finalization of CIT: The deadline for filing is the 90th day from the end of the calendar year or fiscal year.

According to the Law on Tax Administration 38/2019/QH14, the deadline for the CIT finalization dossier is the last day of the third month from the end of the calendar year or fiscal year.

Method of calculating corporate income tax

4. Personal income tax

What is Personal Income Tax (PIT)?

Personal income tax is a direct tax levied on the income of earning employees.

Time limit for PIT declaration

• Enterprises declare and pay personal income tax on a monthly basis: No later than the 20th day of the following month.

• Enterprises declare and pay PIT quarterly: No later than the 30th day of the next quarter.

PIT calculation method

• For resident individuals with a labor contract of 3 months or more: Deduct according to the partially progressive tax schedule and the employee is entitled to family circumstance-based deduction before deduction. Income-paying organizations are responsible for settlement on behalf of authorized individuals.

• For residents without a labor contract or with a labor contract of less than 3 months: Direct deduction of 10% at source before paying income with a total payment of 2,000,000 VND or more, no They are eligible for family circumstance-based deductions but are allowed to make a commitment 02/CK-TNCN (if eligible) for the organization to pay temporary income without tax deductions of these individuals.

• For non-resident individuals: Deduct 20% before paying income.

5. Other taxes based on feature of each enterprise

a. Severance tax

What is severance tax?

• Severance tax is an indirect tax; this is the amount that organizations and individuals must pay to the state when exploiting natural resources.

• Applicable to enterprises having mineral mining activities.

Severance tax calculation method:

Time limit for tax declaration and tax finalization:

• The time limit for submitting natural resource tax declaration dossiers for monthly declarations is the 20th day of the following month.

• The annual natural resource tax finalization report must be submitted no later than the 90th day from the end of the calendar year or fiscal year.

b. Import tax and export tax

What is import and export tax?

Import and export tax is an indirect tax, levied on goods exported or imported through Vietnam's borders; goods bought, sold and exchanged by border residents and other goods traded and exchanged are considered imported and exported goods.

Methods of calculating import and export tax:

Time limit for paying export tax and import tax:

c. Environmental Protection tax

What is the environmental protection tax?

• Environmental protection tax is an indirect tax, collected on products and goods (hereinafter referred to as goods) when used, causing adverse impacts on the environment.

• Applicable to enterprises: If they manufacture or import goods subject to environmental protection tax as prescribed in the Law on Environmental Protection Tax 2010.

Method of calculating environmental protection tax

Time limit for paying environmental protection tax

Environmental protection tax is paid only once for manufactured or imported goods.

• For domestically produced goods: environmental protection taxpayers shall submit environmental protection tax declaration dossiers to the tax authorities directly managing them.

• For imported goods: taxpayers shall submit tax declaration dossiers to the customs office where customs procedures are carried out.

d. Special consumption tax

What is excise tax?

• Special consumption tax is an indirect tax levied on several special goods directly produced and sold by enterprises or imported and sold by enterprises.

• Applicable to enterprises: If there is a production or importation of goods or business services that are subject to excise tax.

Method of calculating excise tax:

Time limit for declaring excise tax:

Deadline for submission of monthly excise tax declaration dossiers: No later than the 20th day of the month following the month in which the tax liability arises.

e. Non-agricultural land use tax

What is a non-agricultural land use tax?

Non-agricultural land use tax is a direct tax levied on non-agricultural land used for production, implementation of investment projects, construction of office buildings, etc.

Non-agricultural land use tax calculation method

Note: Non-agricultural production and business land applies the tax rate of 0.03%.

Time limit for payment of non-agricultural land use tax

• The deadline for annual tax payment is December 31 of each year.

• Taxpayers have the choice to pay tax once or twice a year and must complete their tax obligations by December 31 of each year.

6. Legal basis

• Law on personal income tax 2007 amended in 2012.

• Law on Value Added Tax 2008.

• Law on special consumption tax 2008.

• Law on corporate income tax 2008.

• Law on natural resources tax 2009.

• Law amending and supplementing several articles of the Law on Special Consumption Tax 2014.

• Law amending and supplementing a few articles of tax laws in 2014.

• Law on Value Added Tax, Law on Special Consumption Tax and Amended Law on Tax Administration 2016.

• Law on export tax and import tax 2016.

• Decree 22/2020/ND-CP Amending Decree 139/2016/ND-CP on license fees.

• Decree 139/2016/ND-CP regulating license fees.

• Circular 111/2013/TT-BTC Guiding the Law on Personal Income Tax and Decree 65/2013/ND-CP.