Decoding business license tax: What businesses and individuals need to know?

Learn in detail about the business license tax: taxpayers, tax rates, deadlines, payment methods, and important notes. This article provides comprehensive and easy-to-understand guidance for businesses and individuals to ensure timely compliance with tax obligations.

 

1. Business License Tax (BLT)

Concept: Business license tax is a direct tax that organizations, business households, and individuals engaged in business activities must pay periodically annually or when starting a business operations.

Purpose of BLT:

  • Help state management agencies can control and efficiently manage business operations in the area, ensuring security and social order.
  • Contribute to the state budget for public expenditure on education, healthcare, national defense, etc.
  • Encourage businesses, business households, and individuals to implement environmental protection measures and minimize the environmental impact of their business activities.

Significance of BLT:

  • For the state: BLT is an important source of revenue for the state budget, supporting public expenditure.
  • For businesses, business households, and individuals: BLT helps businesses, business households, and individuals obtain business licenses, operate legally, and be protected by law.
  • For society: BLT contributes to maintaining security and social order, effective business management, and environmental protection.

2. Taxpayers

Businesses: Including businesses established under Vietnamese law, such as:

  • Joint-stock companies
  • Limited liability companies
  • Private businesses 
  • Cooperatives
  • Branches and representative offices of enterprises (if any)

Business households: Individuals engaged in business activities and granted a Business Registration Certificate.

Individuals engaged in business activities: Individuals engaged in business activities who are not granted a Business Registration Certificate but have business activities subject to BLT.

Exemptions from BLT:

  • Business households and individuals with annual turnover of 100 million dong or less.
  • Exemption during the first year of establishment or commencement of business operations:
    • Newly established organizations (granted new tax codes and business codes).
    • Households, individuals, and groups of individuals starting business activities for the first time.
    • During the BLF exemption period, branches, representative offices, and business locations of organizations, households, individuals, and groups of individuals granted the exemption are also exempt from BLF.
  • Cooperatives and cooperative unions operating in agriculture.
  • Small and medium-sized enterprises (SMEs) transitioning from business households are exempt from BLF for 3 years from the date of first obtaining a business registration certificate.

3. Tax Rates

Businesses: BLT rates are determined based on the charter capital or investment capital of the business, as follows:

  • Organizations with charter capital or investment capital over VND 10 billion: VND 3,000,000 (three million) per year.
  • Organizations with charter capital or investment capital of VND 10 billion or less: VND 2,000,000 (two million) per year.
  • Branches, representative offices, business locations, public service units, and other economic organizations: VND 1,000,000 (one million) per year.

Business households: BLT rates are determined based on the business household’s revenue in the previous year, as follows:

  • Revenue from 100 million dong to 300 million dong: 300,000 dong/year.
  • Revenue from 300 million dong to 500 million dong: 500,000 dong/year.
  • Revenue over 500 million dong: 1,000,000 dong/year.

Individuals engaged in business activities: BLT rates apply the same as the tax rates for business households with the same revenue level.

Notes:

  • The above BLT rates apply only to businesses, business households, and individuals engaged in business activities within the same province/city.
  • BLT rates may vary for specific business sectors according to legal regulations.

4. Deadline for business license tax

New taxpayers or newly established organizations; SMEs transitioning from business households: File BLF declarations and submit the Declaration Form to the directly managing tax authority before January 30th of the year following the commencement of business operations or establishment.

Note: 

  • Timely and complete BLF payment is the obligation of organizations, business households, and individual business owners. 
  • Late BLF payments are subject to penalties as prescribed by law.

5.  Payment Methods 

Direct payment at the tax authority:

  • Step 1: Prepare the BLT payment dossier, including:
    • BLT declaration form (according to Form 01/LPMB issued with Circular 80/2021/TT-BTC).
    • Documents proving business capital sources (for businesses).
    • Business Registration Certificate (for business households).
    • Personal identification documents (for individuals engaged in business activities).
  • Step 2: Submit the dossier and BLT payment to the competent tax authority.

Electronic tax payment through the e-Tax Portal:

  • Step 1: Register an account and log in to the e-Tax Portal https://etaxvn.gdt.gov.vn/.
  • Step 2: Declare and submit the electronic BLT declaration form.
  • Step 3: Pay BLT through a bank or online payment gateway.

In addition, you can also refer to more information about business license tax at:

Case Study
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