Circular 65/2020/TT-BTC amending Circular 302/2016/TT-BTC

CIRCULAR

On amending and supplementing a number of articles of the Circular No. 302/2016/TT-BTC dated November 15, 2016 of the Minister of Finance on providing guidance on business license fee

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Pursuant to the Law on Fees and Charges No. 97/2015/QH13 dated November 25, 2015;

Pursuant to the Government s Decree No. 139/2016/ND-CP dated October 04, 2016, prescribing the business license fee;

Pursuant to the Government s Decree No. 22/2020/ND-CP dated February 24, 2020 on amending and supplementing a number of articles of the Government s Decree No. 139/2016/ND-CP dated October 04, 2016, prescribing the business license fee;

Pursuant to the Government’s Decree No. 87/2017/ND-CP of July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director of the General Department of Taxation;

The Minister of Finance hereby promulgates the Circular on amending and supplementing a number of articles of the Circular No. 302/2016/TT-BTC dated November 15, 2016 of the Minister of Finance on providing guidance on business license fee as follows:

Article 1. Amending and supplementing a number of articles of the Circular No. 302/2016/TT-BTC dated November 15, 2016 of the Minister of Finance on providing guidance on business license fee

1. To amend and supplement Article 2 as follows:

“Article 2. Business license fee payers

Business license fee payers are organizations, individuals, groups of individuals and households engaged in goods and service production and provision activities as prescribed in Article 2 of the Government s Decree No. 139/2016/ND-CP dated October 04, 2016 prescribing the business license fee, except for the cases specified in Article 3 of the Government s Decree No. 139/2016/ND-CP dated October 04, 2016 and Clause 1, Article 1 of the Government s Decree No. 22/2020/ND-CP dated February 24, 2020 on amending and supplementing a number of articles of the Government s Decree No. 139/2016/ND-CP dated October 04, 2016 prescribing the business license fee.”

2. To amend and supplement the first paragraph of Article 3 and add Clause 3, Article 3 as follows:

“Cases of exemption from business license fees shall be consistent with Article 3 of the Government s Decree No. 139/2016/ND-CP dated October 4, 2016 prescribing the business license fee and Clause 1, Article 1 of the Government s Decree No. 22/2020/ND-CP dated February 24, 2020 on amending and supplementing a number of articles of the Government s Decree No. 139/2016/ND-CP dated October 04, 2016 prescribing the business license fee. Cases of exemption from business license fees prescribed in Clauses 1 and 2, Article 3 of Decree No. 139/2016/ND-CP and Clause 1, Article 1 of the Decree No. 22/2020/ND-CP shall be determined as follows:”

“3. To exempt from business license fee under Clause 1, Article 1 of the Government’s Decree No. 22/2020/ND-CP dated February 24, 2020 as follows:

a) Cooperatives, unions of cooperatives (including branches, representative offices and business locations) operating in agricultural sector in accordance with law on agricultural cooperatives.

Cooperatives, unions of cooperatives (including branches, representative offices and business locations) must be established and operates in accordance with the Law on Cooperatives; Agricultural sector to be operated shall be determined according to Article 3 of the Circular No. 09/2017/TT-BNNPTNT dated April 17, 2017 of the Minister of Agriculture and Rural Development on providing guidance on classifying and evaluating cooperatives operating in agricultural sector, comprising cooperatives and unions of cooperatives engaged in production and business in many fields, including agricultural sector.

b) People s credit funds; branches, representative offices and business locations of cooperatives, unions of cooperatives and private enterprises conducting business in mountainous areas. Mountainous areas shall be identified according to regulations of the Committee on Ethnic Minority Affairs.

c) To exempt business license fee for the first year of establishment or production and business operation (from January 01 to December 31) for:

- Newly established organizations (granted new tax identification numbers, enterprise identification numbers).

- Households, individuals and groups of individuals conducting production and business activities for the first time.

- During the business license fee exemption period, if an organization, household, individual or group of individuals establishes a branch, representative office or business location, then such branch, representative office or business location shall be exempted from business license fee in the business license fee exemption period of such organization, household, individual or group of individuals.

If newly established organizations, households, individuals and groups of individuals conduct production and business activities for the first time before February 25, 2020 and establish branches, representative offices and business locations from February 25, 2020 (if any), such organizations, households, individuals and groups of individuals, branches, representative offices and business locations shall pay business license fees in accordance with the Government’s Decree No. 139/2016/ND-CP dated October 04, 2016, prescribing the business license fee.

d) Small and medium-sized enterprises transformed from business households (according to Article 16 of the Law on Support for Small- and Medium-sized Enterprises) shall be exempted from business license fees for 03 years from the date of issuing the first-time enterprise registration certificate.

- During the business license fee exemption period, if a small and medium-sized enterprise establishes a branch, representative office or business location, such branch, representative office or business location shall be exempted from business license fees in the business license fee exemption period of such small and medium-sized enterprise. If branches, representative offices and business locations are established (are granted operation registration certificates) from February 25, 2020 (the effective date of the Government’s Decree No. 22/2020/ND-CP dated February 24, 2020), the business license fee exemption duration of such branches, representative offices and business locations shall be counted from the date on which such branches and representative offices are granted registration certificates for operating branches and representative offices, such business locations are granted business location registration certificates until the end of the business license fee exemption period of small and medium-sized enterprises.

- If branches, representative offices and business locations of a small and medium-sized enterprise (those are entitled to exemption from business license fees in accordance with Article 16 of the Law on Support for Small- and Medium-sized Enterprises) are established before the effective date of the Government’s Decree No. 22/2020/ND-CP dated February 24, 2020, the business license fee duration of such branches, representative offices and business locations shall be counted from the effective date of the Decree No. 22/2020/ND-CP until the end of the business license fee exemption period of small and medium-sized enterprises.

- Small and medium-sized enterprises transformed from business households before the effective date of the Government’s Decree No. 22/2020/ND-CP dated February 24, 2020 shall be entitled to business license fee exemption in accordance with Articles 16 and 35 of the Law on Support for Small- and Medium-sized Enterprises.

dd) Public general education and early childhood education institutions.”

3. To amend and supplement Clause 2, Article 4 as follows:

“2. Business license fee rates for individuals, groups of individuals and households engaged in goods and service production and provision activities are prescribed as follows:

a) Individuals, groups of individuals, households having an annual turnover of over VND 500 million: VND 1,000,000 (one million)/year;

b) Individuals, groups of individuals, households having an annual turnover of between over VND 300 million and VND 500 million: VND 500,000 (five thousand)/year;

c) Individuals, groups of individuals, households having an annual turnover of between over VND 100 million and VND 300 million: VND 300,000 (three hundred)/year.

Turnover serving as a basis for determining business license fees for individuals, groups of individuals, households and business locations newly launched by business households are prescribed as follows:

- Turnover serving as a basis for determining business license fees for individuals, groups of individuals, households (except for persons providing property lease services) shall be the total turnover used to calculate personal income tax in the preceding year of the production and business activities (excluding property lease activities) of business locations under the Circular No. 92/2015/TT-BTC dated June 15, 2015 of the Ministry of Finance on guidelines for value-added tax and personal income tax in terms of residents engaging in business; on guidelines for personal income tax in the Law on amending and supplementing a number of articles of the Laws on Taxes No. 71/2014/QH13 and the Government’s Decree No. 12/2015/ND-CP dated February 12, 2015 on detailing the implementation of the Law amending and supplementing a number of articles of the Tax Laws and amending and supplementing a number of articles of the Decrees on taxes.

For individuals, groups of individuals and households that have dissolved, suspended their production and business, then resume their business and could not determine the turnover of the preceding year, the turnover serving as a basis for determining business license fees shall be the turnover of a production and business facility of the same scale and business line in the same area in accordance with the Circular No. 92/2015/TT-BTC dated June 15, 2015 of the Minister of Finance.

- Turnover serving as a basis for determining business license fees for individuals providing property lease services shall be the turnover used to calculate personal income tax of property lease contracts of the taxable year. In case an individual has many property lease contracts in one location, turnover serving as a basis for determining business license fees for such location shall be total turnover from property lease contracts of the taxable year. In case an individual leases his/her properties at many locations, turnover serving as a basis for determining business license fees for each location shall be total turnover from property lease contracts of locations in the taxable year, including the case that there are many property lease contracts arising from one location.

If the contract of property lease lasts multiple years, business license fees shall be paid annually corresponding to number of years which the individual, group of individuals, household making statement of value-added tax, personal income tax. If the individual, group of individuals, household makes statement and lump-sum payment of value-added tax, personal income tax with respect to the contract of property lease which lasts multiple years, it shall pay business license fees for one year.

- Individuals, groups of individuals, households, business and production locations (those are not entitled to business license fee exemption) conducting production and business operations for the first 6 months shall pay business license fees for the whole year, or pay 50% of  business license fees for 01 year if conducting their production and business operations in the last 6 months.”

4. To amend and supplement Clause 3, Article 4 as follows:

“3. Organizations, branches, representative offices, business locations (those are not entitled to business license fee exemption in the first year of establishment or conducting production and business operations) established, granted enterprise identification numbers within the first 6 months shall pay license fees for the whole year; those are established, granted tax registration certificates and tax identification numbers, enterprise identification numbers within the last 6 months shall pay 50% of business license fees for the whole year.

Upon ending of the business license fee exemption period (the fourth year after establishing an enterprise), small and medium-sized enterprises transformed from business households (including branches, representative offices and business locations) shall: In case of ending within the first 6 months, the business license fee to be remitted shall be equal to the business license fee for the whole year; in case of ending within the last 6 months, the business license fee to be remitted shall be equal to 50% of the business license fee for the whole year.

The business license fee payer submitting written document to the supervisory tax agency or business registration agency about he/she/its suspension of production and business in the calendar year (from January 01 to December 31) shall not have to pay business license fees for the year of production and business suspension if:  The written document on suspension of production and business is sent to the supervisory tax agency or business registration agency before the time limit for fee payment as prescribed (January 30 every year) and business license fees of the year proposed for production and business suspension have not been paid yet. In case of suspending business and production operation without satisfying the above-mentioned conditions, business license fees for the whole year shall be required.”

5. To amend Clause 5 as follows:

“Article 5. Declaration and payment of business license fees

The declaration and payment of business license fees shall comply with the Government’s Decree No. 139/2016/ND-CP dated October 04, 2016, prescribing the business license fee and the Government s Decree No. 22/2020/ND-CP dated February 24, 2020 on amending and supplementing a number of articles of the Government’s Decree No. 139/2016/ND-CP dated October 04, 2016, prescribing the business license fee and laws on tax administration.”

Article 2. Effect

1. This Circular takes effect on August 23, 2020.

2. If any document referred to in this Circular is amended, supplemented or replaced during the course of implementation, the amending, supplementing or replacing document shall prevail.

3. Any difficulties and troubles arising in the course of implementation should be promptly reported to the Ministry of Finance for consideration and settlement./.